Money

David French, NY Times -   Over the last quarter-century, G.D.P. growth in the United States has far outpaced growth in Europe and Japan, two of our primary economic competitors (outside of India and China), to such an extent that many of Europe’s most powerful nations have economies only as prosperous as those of our poorest states. British and French living standards, as measured by disposable income, for example, are more comparable to that of Mississippi, still the poorest state, than to America’s as a whole.

We hear about a shrinking middle class, but it’s shrinking because the ranks of the rich and the upper middle class are growing. According to an analysis by the economists Scott Winship and Stephen Rose, the core middle class (defined as households with incomes from 250 percent to under 500 percent of the poverty line) shrank from 35.5 percent of families in 1979 to 30.8 percent in 2024. That may not look like much at first glance, but that’s a 13 percent decline.

It’s not because Americans are getting poorer. They’re getting richer — much richer. The percentage of Americans who were poor or near-poor (less than 150 percent of the poverty line) plunged from 29.7 percent to 18.7 percent over the same time period. The percentage of lower-middle-class families (150 percent to under 250 percent of the poverty line) shrank as well — from 24.1 percent to 15.8 percent.

During the same period, the share of upper-middle-class and rich Americans exploded. In 1979, 10.4 percent of families were upper middle class, with incomes from 500 percent to under 1,500 percent of the poverty line. By 2024, the percentage had almost tripled, to 31.1 percent, and the percentage of the rich (incomes