Certainly, there is some fuzz and overlap there. A retiree earning $50k/year on dividends and capital gains meets that criterion, while a top-shelf skilled professional or DINK couple earning $400k/year solely from working 40 hours per week (each) does not. The latter could certainly become upper class rather easily just by paying off debt, avoiding unnecessary expenses, and dumping excess cash into index funds, but as long as that plan can be cut short by two simple words ("you're fired") they haven't crossed that class boundary yet.

Generally, when the middle class shrinks, it isn't because a significant portion of them are becoming upper class. More often, it is because expenses rise faster than prevailing wages. The mark of the middle class, to me, is being able to comfortably pay all living expenses with all adults in the household working no more than one full-time job (probably salaried, but not necessarily) at 40 hours per week. You can get everything you need with just one job, and some of what you merely want.

The instant you cross that line where you have to abandon desires and work longer to make ends meet, you're in the lower class. There are certain needs in the US that are not actually survival-level necessities, but rather mandatory to meaningfully participate in civil society. Those have expanded. In earlier decades, you essentially just needed a motor vehicle, a location-based telephone number, and a mailing address. Now, you also need one or more person-based telephone numbers, an Internet connection, and various forms of insurance. Expense categories expanded, even as costs for each expense rose. Median wages stayed stagnant. So people drop out of the middle class. They stop going to the movies and take on more hours or a part time job in order to pay their phone bill.