And as I read Mark Perry’s post at the Foundation for Economic Education, “Why Our Shrinking Middle Class Is a Good Thing”, I could only think, “Oh, for an educated class that understands statistics!” What the statistics he cites in the article really tell us is that in many places in the country a six figure salary barely provides a middle class lifestyle any more.
There is a slim, now more than 50 year old pamphlet titled “How to Lie With Statistics” that should be required reading for every educated person.
What is middle class? I would propose that for the entire country “middle class” should mean median income ±two standard deviations, upper middle class median income +three standard deviations, and “the rich” as median income +four standard deviations. Median income minus three standard deviations are “the working poor”. For individual localities the definitions would vary based on the local median income.
According to the Census ACS median income for a family of four in Chicago is around $66,000 (other reckonings say $47,000). The “middle class” would then be households earning between $45,000 and $85,000. Incomes in Chicago have basically been flat for a dozen years. Note that if you research this yourself you should distinguish carefully among Chicago, Chicago metro, and Illinois.
Using my method the middle class cannot by definition shrink but it can become poorer which is very much what has happened over the last 30 years.