Carpe Diem.s Mark J. Perry slices the Census "Money Income of Households" to suggest that a substantial part of the vanishing middle class has vanished upward.
The top two charts above show that the share of American “middle class” households making either: a) $25,000 to $75,000 or b) $35,000 to $75,000, did decline starting in the 1970s, but it was because a greater share of American households were moving up to a higher-income category ($75,000 and above), not down into a lower-income category (which were declining as shares of all households, though at a lower rate than the decline in the share of middle-income households). And that movement of the middle-class (and the lower-income group) was so significant that between 1967 and 2009, the share of American households earning incomes above $75,000 more than doubled, from 14.4% to 31.6%. Further, the bottom chart above shows that the share of US households earning $100,000 or above has more than tripled from 6.1% in 1969 to 20.1% in 2009.

On the previous CD post, Ken commented that although “Many prominent people like Paul Krugman claim that the middle class has been in decline since the 1970s, that assertion is incredibly and verifiably wrong.” According to the percent distribution of household income in Table 690 from the Census Bureau, I think Ken is exactly right. Despite all of the reports on stagnating household income, decreased mobility for the middle-class, the top 1% reaping all of the benefits of income/wealth gains over time, increasing income inequality, current generations doing worse than their parents, the general decline of the middle class, etc., the Census Bureau data and the charts above tells a different story of an America with documented evidence of rising income levels for a rising share of American households.
Thus, inevitably, there will be a growing gap between the richest and the poorest households, because the income sample is truncated at zero whilst bounded by a very large number above.  The meaning of living within $35,000 of zero remains, as ever, a subject for future research.

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