The Middle Class Squeeze
How rising costs, stagnant wages, and economic insecurity are hollowing out the middle class in developed countries.
The Hollowing Out
In the United States, the share of adults living in middle-income households fell from 61% in 1971 to 50% in 2021, according to Pew Research. Similar trends are visible in the UK, Germany, and other OECD countries. The middle class is being squeezed from both sides: while some families move up into higher income brackets, more are falling into lower ones.
The squeeze reflects a structural shift. Manufacturing jobs that once provided middle-class wages without college degrees have declined. The labor market has polarized into high-skill, high-pay jobs (technology, finance, medicine) and low-skill, low-pay service jobs (retail, hospitality, logistics), with the middle hollowed out. Meanwhile, the costs of the three pillars of middle-class life -- housing, education, and healthcare -- have risen far faster than wages.
