State of the Middle Class

Household Incomes

Is the U.S. in a Debt Spiral?

As incomes have to stretch further, the American dream of homeownership, college for kids, and basic health care is growing out of reach.

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Incomes are buying less and less

Since 1970, income inequality has been rampant. The buying power of the rich has increased dramatically, as compared to the buying power of the poor. Nonetheless, no middle or low-income households kept pace with the rising costs of homes, education, or health care.

Household Income and Expense Growth since 1970

Household Income Sources
Household Expense Sources

Annual Health Care Premium Taken from Paycheck

(in current US dollars)

Sources

Workers pay more for fewer benefits

For those who get health benefits from their employers, insurance premiums have risen significantly, reducing the value of wage increases. So even if you got a raise, some of it goes to paying higher insurance costs.

Wages don’t keep pace with productivity anymore

After World War II, when worker productivity increased, workers were rewarded with similar pay increases. This changed in the 1970s, when worker contributions were not fully reflected in paychecks, leaving many workers behind.

Worker Productivity and Wage Growth Since 1947

Source link

Official vs. BCDI Defined Unemployment Rate

Official Rate

BCDI Rate
Most recent

August 2026

 		4.1% 9.9%
Peak COVID-19 unemployment

April 2020

 		14.8% 26.4%
Heart of Great Recession

October 2009

 		10.0% 19.0%
Peak employment: Dot-com bubble

April 2000

 		3.8% 8.9%
Sources

Unemployment numbers are misleading

The official unemployment rate numbers leave out people who’ve stopped job hunting or who took a part-time job since they can’t get full-time work. BCDI recalculates the rates to include these groups, and you can see a true view of unemployment in the “BCDI Rate” column. This gives you a clearer picture of economic distress during crises like economic downturns or pandemics.

Income Distribution Data Sources

Income data is taken from Table H-3. Mean Income Received by Each Fifth and Top 5 Percent of All Households from the Current Population Survey’s Annual Social and Economic Supplements, U.S. Census Bureau.  Average income is reported for three groups, the top 5%, Middle 60%, and Bottom 20% of income earners.  Income is adjusted for inflation in US Dollars for the year the data is listed using the annual Consumer Price Index from the Federal Reserve Bank of Minneapolis.

Household Expense Data Sources

Home Purchase Price is recorded as the Median Sales Price of Houses Sold for the United States and obtained at FRED (Federal Reserve Economic Data).  Prices are adjusted for inflation in US Dollars for the year the data is listed using the annual Consumer Price Index (CPI) from the Federal Reserve Bank of Minneapolis.  Health costs are taken from “NHE Summary, including share of GDP, CY 1960-<most recent year>” under National Health Expenditure Historical Data from the Centers for Medicare & Medicaid Services (CMS.gov), adjusted for inflation using CPI, and calculated per household using Total Households, TTLHH, from FRED.  Education Data is obtained from Table 330.10, Student Charges for 1963-64 through the year the data is listed from the National Center for Education Statistics and adjusted from academic to calendar years.

Health Care Premium Data Sources

Data is taken from the Kaiser Family Foundation’s Annual Employer Health Benefits Survey.  It is averaged by decade except for the single year 1999 which represents the first year of the dataset. All figures are adjusted for inflation in US dollars to the most recent year for which the data is listed using the Consumer Price Index at the Federal Reserve Bank of Minneapolis.

Worker Productivity and Wage Data Sources

Inflation adjusted Labor Productivity and Hourly Wage Indices are taken from FRED (Federal Reserve Economic Data) and generated by the U.S. Bureau of Labor Statistics. Each index is converted to a total growth rate from the starting year of 1947.

Unemployment Rate Data Sources

The official Unemployment Rate (U-3) is taken from FRED (Federal Reserve Economic Data) and generated by the U.S. Bureau of Labor Statistics. The BCDI Unemployment Rate subtracts those who are employed part-time and want full-time work from the number of employed. It also adds the number of people who want to work and are currently not employed, regardless of how much time has passed since they were employed or looking for work, to the number in the labor force. Specific employment statistics are obtained using the BLS Data Finder at the Bureau of Labor Statistics.