The American Dream is often times characterized by a loving family living in a nice house surrounded by a white-picket fence—a circumstance stylized by shows like Leave it to Beaver and the Andy Griffith Show in the 1950s and 60s. In other words, the American Dream—desired by millions—was to live among America’s middle class.
But what exactly is the middle class and how has it changed over the past 50 years?
While there is no definitive description of the term “middle class,” the varying definitions that do exist all try to find what amount of money will allow a household to live relatively comfortably. Obviously, this depends on a wide assortment of variables—such as family size, region of the country the family is located, and how rural or urban the area is.
The American Enterprise Institute, for example, boils the middle class down to households making between $35,000 and $100,000 (2016 dollars) per year.
When using this measure, it’s clear the middle class has been shrinking—dropping from 53 percent of the population in 1967 to 42 percent of the population in 2016. However, that trend isn’t necessarily a bad thing.
According to the same data, while the middle class was shrinking, the number of Americans in the upper class was growing and the number in the lower class was declining. This means, in net, American families migrated upward in economic status. More specifically, the percentage of American households belonging to the upper class increased from 8 to 28 percent. And at the same time, the number of people belonging to the lower class dropped from 39 to 30 percent.
This upward movement proves the American Dream is alive and well—an ideal bolstered by recent public policy moves that lowered taxes and reduced government red tape. When the money and decision-making power are in the hands of the people, rather than government bureaucrats, economic mobility becomes the standard, rather than the exception.
Although the number of people in the middle class is shrinking, the American Dream is stronger than ever. Americans are just getting richer than many thought.