April 25, 2014

Chart of the Week: U.S. middle class no longer the world’s richest

Incomes

Economic inequality is in the news in a way it hasn’t been for a long time. Thomas Piketty’s book Capital in the 21st Century, which argues that the innate dynamics of capitalism cause income gaps to widen, has become a surprise best-seller (so much so that Amazon listed it as “temporarily out of stock”). President Obama has called for raising the federal minimum wage as one measure to help narrow inequality, but in the absence of Congressional action, many states and cities are raising their own (or at least putting the question on this fall’s ballots). And, as The New York Times reported this week, the American middle class is no longer the world’s most affluent.

This week’s chart of the week (our screenshot doesn’t capture the interactive version) shows how after-tax incomes at different levels grew between 1980 and 2010 in the U.S. and 10 other advanced economies. (The data come from the Luxembourg Income Study Database.) Besides showing how steep income growth was at the upper levels relative to the lowest ones, the graphic shows how much different tiers of Americans have fallen behind their peers in other countries.

For instance, Americans in the 20th income percentile earned less in 2010 than Norwegians, Canadians, Dutch, Germans, Swedes and Finns in those countries’ respective 20th percentiles. Three decades earlier, 20th-percentile Americans earned more than everyone except Canadians. American and Canadian median per capita incomes were about equal in 2010, at $18,700, according to the LIS data. But other, more recent income surveys, “suggest that since 2010 pay in Canada has risen faster than pay in the United States and is now most likely higher,” the Times wrote.

But the American rich still make considerably more than other countries’ rich. At the 95th percentile, U.S. per-capita income was nearly $60,000, more than $10,000 ahead of Canada’s top earners.

Category: Chart of the Week

Topics: Income Inequality, World Economies

  1. Photo of Drew DeSilver

    is a Senior Writer at the Pew Research Center.

Leave a Comment

Or

All comments must follow the Pew Research comment policy and will be moderated before posting.

4 Comments

  1. tom p3 weeks ago

    one of the worst things that hurt the middle class took place during 1967-1979, I worked for a company that claimed to provide COLA and I lost 51% of my buying power during that time, I have not regained any of that lost to this date 2014. It very easy for me to see what is wrong with the us economy, there are millions of people that lost the 51% so they could not spend what they do not have. The data is out there and easy to find and things will continue to get worst untill corrected, since the rich people are also in control of all our governments,mostly, and the courts have ruled it is alright for them to use their money to make laws and obtain political control of our country, things do not look good for the so called middle class and the poor..

    Reply
  2. Richard Block3 months ago

    It’s pretty obvious that the quality of life in some of the Northern European and other countries is better and has been for some time. America is becoming a less equal place where the state does little for its own people – this is not so in Canada, the Nordic countries, Germany and many others. It’s become a oligarchy run by a tiny elite, with a veneer of democracy – a bit like an affluent Russia. Shame.

    Reply
    1. Clark Dunlap2 months ago

      “Where the state does little for its own people” Seriously? First are you under the impression that the state somehow generates wealth? It doesn’t you know. It just takes money from taxpayers, wastes a lot of it, then gives it back in all kinds of forms from paying for roads and armament to welfare. Secondly, they do give quite a bit back to the people. Just loo at the size of our budget! Thirdly, one fatal flaw of your logic is in the wording above: “the state does little for IT’S OWN PEOPLE.” Sounds a bit like we’re indentured servants (slaves) of the state, and that is how you view the public. Now perhaps you meant “it’s own” as a servant my refer to their master, as “mine” but it could be enlightening to the way many think of the state as their provider.
      Also, $60,000 is 95th percentile? That is not wealthy in our economy.

      Reply
      1. Clark Dunlap2 months ago

        Oh for an edit feature!

        Reply