Real median household income is at an all time high, up 13% from 2012-2017.
Further, the median can easily mask such changes as underemployment if it happens in much less than 50% of households, if the "middle class" previously had a broad base. Basically, the middle of the histogram would continue to look pretty flat (same median income for the "middle class") while the width of the flat region would shrink (shrinking middle class).
https://marginalrevolution.com/marginalrevolution/2016/06/th...
http://www.aei.org/publication/yes-the-us-middle-class-is-sh...
This piece from the Minneapolis Fed is also worth reading:
https://www.minneapolisfed.org/publications/the-region/where...
Worth mentioning that the 4th and 5th Quintiles have either not grown at all (in real terms) or even slightly fallen.
Of course compared the the 1st quintile and Top 5% everyone else has been totally screwed.
I think the narrowing of the middle class has more to do with the dramatic rise in housing, education, and health care costs than it does with wages.
https://www.advisorperspectives.com/dshort/updates/2018/10/1...
when you consider this shift, it might allow for a reduction in wages.
just speculation. i haven't looked at the data.
B. Median simply means the middle of the frequency distribution, so you could have a glut of people earning significantly lower than the median, while the upper tail is more or less smooth out to the top end.
C. It's not as easy to find data going back to mid-century, but the trend since the eighties has been largely upward in real terms. Again though, we know that the top 1% has had outsize gains, and it's reasonable to assume that the distribution was more Gaussian in the preceding years.
Decades of policy created the environment we are in now, where the bottom 3 quintiles lost out entirely on any gains to globalization.
Now, perhaps more than any time in the last 50 years, we have conditions which could lead to gains for those lower quintiles.
I don’t expect to see decades of losses reversed overnight, but for the last 10 years things have gotten better not worse, which is something new.
Hopefully we are at a point which will start seeing accelerating gains accumulating toward the lower quintiles.
IMO, for that to happen, we need to reduce the supply of unskilled labor to drive increased wages at that point on the curve.
The US is uniquely unable to cope with this outcome. Health Insurance is tied to employment. Education is costly. Our new mythology of Bootstraps instead of Social Guarantees. I don't see a new robust and dynamic economy coming to the rescue. For those of us currently doing well, this ought to be worrying.