We’ve been exploding the myth of the declining middle class week after week. We like this new video from our friends at Kite & Key explaining that it’s true the middle class is shrinking – but only because mass affluence has moved so many people into upper income status. The real economic challenge for the middle class is specific to a handful of sectors – housing, education, health care – that have become too expensive because of bad government policies.

In 1971, 61 percent of Americans were middle class. By 2023, it was 51 percent  –  a 10-point drop.

Which makes it sound like all this gloom is justified. Except… there’s a pretty big complication here.

You hear “the middle class is shrinking” and you assume people are getting poorer. But, what actually happened in that 50-year window?

The share of lower-income Americans didn’t move much  –  it went from 27 percent of households to 30 percent. But the share in the upper class went from 11 percent of households to 19 percent.iii

In other words: yes, fewer people are in the middle class  –  but that’s mostly a story about them getting wealthier.