A new report from the American Enterprise Institute challenges the narrative of a collapsing middle class, finding that more Americans are moving into higher income brackets than at any point in modern history.
The study, which uses an absolute definition of class based on purchasing power rather than relative comparisons, found the share of families in the upper middle class tripled from about 10% in 1979 to roughly 31% in 2024. Over the same period, the share of Americans who are poor or near-poor dropped from more than half of families to roughly one-third.
What the Left Is Saying
Progressive economists and advocacy groups have long argued that the middle class faces structural pressures that threaten its stability. Critics of the AEI findings contend that focusing on upward mobility obscures growing inequality and the increasing difficulty many families face in achieving economic security.
Several left-leaning policy analysts have noted that while some Americans move up the income ladder, housing costs, healthcare expenses, and childcare costs have outpaced wage growth for many households. The Economic Policy Institute has argued that middle-class stability cannot be measured solely by income thresholds, but must account for the actual purchasing power of families facing rising essential costs.
Progressive economists have also pointed to regional disparities, noting that upward mobility is not evenly distributed across the country. Families in high-cost coastal markets may earn significantly more than the national median yet still struggle with housing affordability, a concern that income statistics alone may not fully capture.
What the Right Is Saying
Conservative economists and AEI researchers argue that the data presents a clear picture of economic progress. The study's authors contend that many claims about a hollowed-out middle class rely on relative definitions that automatically shrink the middle as incomes rise overall.
The report emphasizes that median family income, adjusted for inflation and household size, has risen more than 50% since the late 1970s. Researchers argue this represents real gains in purchasing power that have benefited families across the income distribution, not just those at the top.
Conservatives have also highlighted that for the first time on record, more American families are above the middle-class threshold than below it. They argue this represents a fundamental success of economic policies that prioritize growth and opportunity, suggesting that the pathway to upper-middle-class status remains open to millions of American families.
What the Numbers Show
The AEI study provides specific data points that form the basis of its conclusions. The share of upper-middle-class families, defined as households of three earning roughly $133,000 to $400,000 annually, now accounts for nearly one-third of U.S. households.
Median family income adjusted for inflation and household size has increased by more than 50% since the late 1970s. The research found that earnings increased across nearly the entire income distribution, with even lower-income households significantly better off than their counterparts decades ago.
However, the numbers also reveal persistent challenges. The median home price in the United States now exceeds $400,000, while college tuition often nears $40,000 per year. Surveys consistently show that a large majority of Americans report feeling burdened by a high cost-of-living, even as aggregate income data shows broad gains.
The study acknowledges that inequality has grown, particularly at the very top, but finds little evidence that gains for higher earners came at the expense of others. The data suggests an America where the middle class is evolving rather than evaporating, though the perception gap between statistical gains and public sentiment remains significant.
The Bottom Line
The AEI report presents evidence that the traditional narrative of a dying middle class may be overstated when using absolute measures of purchasing power rather than relative income positions. The data shows millions of families have moved into upper-middle-class status over the past four decades.
However, the disconnect between statistical gains and public perception represents a significant challenge for policymakers. Many families earning well into six figures continue to describe themselves as average or financially squeezed, citing rising housing and education costs.
What remains clear is that the American economy has lifted millions into higher income tiers over time, though whether current trends will continue—and whether perceived economic security matches statistical reality—will likely remain a subject of political debate. The AEI researchers conclude that the middle class is evolving, not evaporating, a framing that both sides of the political spectrum will likely continue to contest.