U.S. middle class now smaller than combined number of rich and poor, Pew says

For the first time in at least 40 years, the number of middle class Americans is now smaller than the number of those in the economic tier above and below.

That's according to an analysis of government data from the U.S. Census Bureau and the Federal Reserve conducted by the Pew Research Center, which looked at income data stretching back from 1971 to 2015.

The group defines "middle class" as any three-person household that earned between two-thirds and double the median income. In 2015, that would include every household that earned between $42,000 US and $126,000 US this year.

For households smaller or larger than three people, the parameters are slightly lower and higher, but a three-person home is the benchmark, Pew said.

Even with such wide parameters, according to the research group, in early 2015 there were 120.8 million adults in America who were considered "middle class" by Pew.

That compares with 121.3 million combined in the lower-income and upper-income segments.

Under this definition, the middle class made up just under 50 per cent of the U.S. adult population in 2015, down from 61 per cent in 1971.

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"The distribution of adults by income is thinning in the middle and bulking up at the edges," the report says.

While it's the first time the middle class's share has dipped to 50 per cent or below, 2015's data are in keeping with a decades-old trend. Since the 1970s, Pew says every decade has ended with a smaller percentage of Americans being in the middle class than started the decade in that segment.

The numbers give credence to a trend that economists, politicians and other policymakers have long suspected: that the middle class, once the backbone of the world's largest economy, is shrinking.

There's more evidence the economic spectrum is thinning in the middle while thickening on either end, according to Pew.

Last year, a full 49 per cent of all income earned in the U.S. went to upper-income households. In 1971, that figure was 20 per cent.

There are more people on the bottom end, too. In 2015, 20 per cent of American adults were in the lowest-income tier, up from 16 per cent in 1971, Pew said.

At the other end of the pool, nine per cent are in the highest-income tier, more than double the four per cent slice in 1971.

Seniors faring much better

The numbers also show differences between the relative income levels among different age groups. Broadly speaking, seniors have done well, with people 65 and older being the only age group that had a smaller share in the lower-income tier in 2015 than in 1971.

That contrasts with younger adults, ages 18 to 29, are among the notable losers. They are now more numerous in the lower-income tiers.

"The biggest winners overall are people ages 65 and older," the report said. "They are less likely to be lower income and more likely to be upper income than they used to be."