Upper Middle Class Becomes Largest Income Group in US Based on AEI Research

The American Enterprise Institute (AEI), a nonpartisan think tank, released research showing that the upper middle class has become the largest income group in the United States. According to the study, 31% of US households now fall into the upper middle class category, a threefold increase since 1979.

This group is defined as households earning between $153,864 and $461,592 annually for a family of four.

The research attributes the decline in the overall middle class share to households moving into higher income brackets rather than falling into poverty. The share of households in the core and low middle class segments has decreased over the period, primarily due to economic advancement.

AEI's analysis is based on US Census data for family incomes from 1979 to 2024, with 2024 representing the most recent available data.

7% of US households, about 12 times higher than in 1979. Factors contributing to these income gains include the rise in dual-earner families and professional advancements for women. In 1970, about 11% of women had college degrees, according to the Bureau of Labor Statistics; by recent years, this figure has risen to about 40%, correlating with higher lifetime earnings.

Scott Winship, a co-author of the report and senior fellow at AEI, stated that increased opportunities for women have played a significant role. He noted that more people have chosen to work additional hours to afford goods and services, rather than pursuing traditional family structures with fewer earners. Despite these income trends, many Americans report financial pressures.

A recent CBS News poll found that a majority of respondents believe it is harder today to buy a house, secure a good job, or raise a family compared to previous generations. Winship explained that perceptions differ when questions focus on personal finances versus the broader economy, with more positive responses about individual situations.