- December 2012: Vol. 24 No. 11

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Caught in the Middle: Thriving Upper Class, Stagnant Middle Class and the Implications for U.S. Commercial Real Estate

by Adrian Ponsen

How is the distribution of economic prosperity changing in the United States? The phrase “declining middle class” rolls right off the tongue, but like most catchphrases used by politicians and the media, it’s an oversimplification, masking the real trends.

Most data show that neither the middle class nor lower-earning segments of the population have had a long-term decline in income, if measured over the past 35 years. But these groups also haven’t seen big income gains, on average achieving long-term earnings growth only slightly ahead of inflation. The story in the United States is really less about a declining middle class than about an upper echelon of earners (think the top 20 percent) that have been doing very well during the past few decades. Meanwhile, most others have maintained status quo in their earnings, albeit at the price of more schooling.

Let’s take a closer look at changing wealth distribution in the United States, how these trends are affec

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