Gap Between the Two Economies in the U.S. Widens

The continued shrinking of the middle class in the United States has left the nation with two economies — rich and poor. According to “The State of the American Middle Class” article posted by the Pew Research Center in May 2024, the share of middle-class American households declined from 61% in 1971 to 51% by 2023. The decline has resulted in the share of lower-income households increasing from 27% to 30% and the share in upper-income households increasing from 11% to 19% during the same 52-year period. Pew’s report further points out that while the proportionately greater increase in share of the upper-income households is a sign of economic progress overall, “growth in income for the middle class since 1970 has not kept pace with the growth in income for the upper income tier.” Furthermore, the “share of total U.S. household income held by the middle class has plunged.” Based on Bank of America data, a recent article by the Wall Street Journal reveals that although the pace of wage growth of the bottom third of U.S. earners exceeded that of the top third over the past few years, the trend has reversed with top earners pulling far ahead since the start of the year. In contrast to the 3.6% annual wage and salary growth and 2.2% year-over-year spending growth among the top third earners in August 2025 per the Bank of America data, the bottom-third had a 0.9% lowering in wages and a nominal 0.3% rise in household spending.

Source:    https://www.wsj.com/economy/us-economy-analysis-wealthy-low-income-8ba80ccc