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									        Middle class:
Income and consumption trends
   Heather Boushey, Economist
  Center for Economic and Policy
             Research
          21 March 2006
                                       Figure 1. Changes in income share
                                               by economic class
                                       54%
                                                    Middle 60% of households
     Share of total household income




                                       52%

                                       50%

                                       48%

                                       46%

                                       44%
                                                            Top 20% of households
                                       42%

                                       40%
                                             1969    1974    1979     1984   1989   1994   1999   2004
                                                                        Year
Source: U.S. Census Bureau, Historical Income Tables, Table H2
http://www.census.gov/hhes/www/income/histinc/h02ar.html.
                                      Figure 2. Growth in inflation-
                                         adjusted family income
                                                       1947-1979     1979-2004
      Percent change in annual real




                                               2.4        2.4       2.5          2.4         2.4
                                      2.3
             family income




                                                                                               1.4
                                                                                   1.1
                                                                          0.7
                                                 0.4         0.5
                                        0.2


                                      Bottom   Second     Middle    Fourth      Top 20%      Top 5%
                                       20%      20%        20%       20%
                                                     Family income threshold (lower bound)
Source: U.S. Census Bureau, Historical Income Tables, Tables F1 & F5
http://www.census.gov/hhes/www/income/histinc/.
                                      Figure 3. Inflation-adjusted
                                        median family income
                             80,000

                             70,000

                             60,000
     Family income (2004$)




                             50,000

                             40,000

                             30,000

                             20,000

                             10,000

                                 0
                                  1947   1952   1957   1962   1967   1972    1977   1982   1987   1992   1997   2002
                                                                            Year
Source: U.S. Census Bureau, Historical Income Tables, Tables F1 & F5
http://www.census.gov/hhes/www/income/histinc/.
                                       Figure 4. The “two-income trap”
                                   $70,000
                                                  Fixed costs (mortgage, child care,
Inflation-adjusted family income




                                                  health insurance, car, taxes)
                                                  Discretionary income
                                   $50,000
                                                                                           $50,755

                                   $30,000               $20,866


                                   $10,000               $17,834                           $17,045


                                              Single-income family early 1970s   Dual-income family early 2000s
                                   -$10,000

           Source: Warren and Tyagi, 2005. The Two-Income Trap, p. 51.
          Table 1. Relative mobility,
        Comparing 1969-79 & 1988-98
                                       Quintile at end of period
  Quintile at
  beginning          Bottom         Bottom                    Top       Top
  of period         1969-79        1988-98                  1969-79   1988-98
    Bottom            49.4%        53.3%                      3.3%     4.3%

    Second             23.2         25.7                       7.7      4.3

    Middle             10.2         10.9                      18.7     12.6

    Fourth              9.9          6.5                      23.7     25.8

      Top               5.0          3.0                      49.1     53.2

Source: Bradbury and Katz, 2002.
                         Figure 5. Annual hours of work in
                          married families, 1979 & 2000
                                                   Husbands          Wives
                        2500
 Annual hours of work




                        2000

                        1500

                        1000

                         500

                           0
                                      1979                                   2000
                                                              Year
Source: Mishel, Bernstein, and Allegretto, 2004.

								
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