Earning $133K to $400K? You Could Be Upper Middle Class in America—Even If It Doesn't Feel Like It

Nearly a third of American families now earn enough to be classified as upper middle class, making it the single largest income group in the country for the first time on record, according to research published by the American Enterprise Institute in January.

The AEI report, authored by labour economist Stephen J. Rose and senior fellow Scott Winship, found 31 per cent of US families qualified as upper middle class in 2024. In 1979, that figure was just 10 per cent.

The study defined a family of three earning between $133,000 and $400,000 (£100,500 to £302,200) in 2024 as upper middle class. For a household of four, the range was $153,864 to $461,592 (£116,200 to £348,700), with income above that classified as wealthy.

The findings, highlighted this week by the Wall Street Journal, showed the core middle class fell from 36 per cent of families to 31 per cent over the same 45-year period. The share of households in or near poverty dropped from roughly 30 per cent to below 19 per cent.

'The whole distribution of Americans, from poor to rich, has done better over time,' Winship told CBS News. 'And to the extent that fewer people are within a fixed income range that we might think of as middle class, that's just because everybody's gotten richer over time.'

The analysis relied on US Census data from 1979 to 2024, using absolute income thresholds tied to multiples of the federal poverty line. After adjusting for inflation and smaller family sizes, median family income rose 52 per cent over that period.

Women's Workforce Gains, Dual Incomes Fuelled Upper Middle Class Growth

Two factors drove the shift more than anything else. The first was the surge of women into professional careers. In 1970, about 11 per cent of working-age women held a bachelor's degree, according to the Bureau of Labor Statistics. That share has climbed to roughly 40 per cent.

The second was the rise of dual-earner households. Two professional salaries under one roof pushed families that would have sat in the middle a generation ago into higher brackets.

'The additional opportunities that women have are a big part of the story,' Winship said. 'People have chosen to work more and afford more things, rather than, say, have more children or have a sort of traditional sole breadwinner, but then have less money to buy things.'

The Journal noted these households tend to be white-collar professionals, often baby boomers drawing pension income lifted by stock market gains. Their spending on premium goods has become a notable driver of broader US economic growth.

The share of families classified as rich also grew. At 3.7 per cent in 2024, it was roughly 12 times its 1979 level.

Why Earning $133K Still Doesn't Feel Like Upper Middle Class

The data sit at odds with how many Americans describe their own financial reality. A recent CBS News poll found a majority of respondents said it is harder now to buy a home, secure a good job, or raise a family than it was for earlier generations.

Winship pointed to a split in how people assess their finances versus the wider economy. 'When you ask people about their own families, their own personal financial situation, you get much, much larger shares of people who say that they're doing fairly well,' he said.

Housing, education, and healthcare costs have all outpaced general inflation by wide margins. In cities like New York and San Francisco, $133,000 barely covers the basics for a family of three. The national median home price hovers around $500,000 (£377,800).

'There's a tendency to focus on the sort of three or four big-ticket items that have gotten a lot more expensive without realising that's only part of what people spend their money on,' Winship said.

Income alone does not capture the full picture. Debt, wealth, and geography all shape whether a household that technically qualifies as upper middle class actually lives like one. And inequality widened over the period studied. Families in the highest brackets saw the largest gains, while those in the poorest 5 per cent saw earnings fall in real terms.