Delaware’s Shrinking Middle Class

by: Wolf von Baumgart, Staff Writer

Believe it or NOT, according to a recent Pew Charitable Trusts report, the percentage of upper-income households increased in every state from 2000 through 2013. While this may sound good on the surface, the dataset, when adjusted for inflation, does not bode well for Delaware’s middle class.

The study notes that the minimum income threshold of the upper-income bracket dropped in Delaware by 11.4 percent over the period to $115,693 in 2013, resulting in a net decrease in purchasing power when calculated relative to median income. The overall national trend is that median income has not kept pace with inflation in 44 out of 50 states. That means that 88 percent US households can buy less goods and services at present and invest less for the future. [ This indication, in turn, raises questions of possible economic drag effects over time. ]

The higher-income bracket is defined as having more than twice the median (midpoint) level of annual household income, middle-class is defined as those with incomes between two-thirds and twice the median household income and low-income households are classified as those with incomes below two-thirds of the median for the purposes of the study.

The number of middle class households dropped by 4.3 percent over the period. Accordingly, less than half of Delaware households (47.9 percent) were in the middle class in 2013.

The number of lower income households in Delaware accounted for almost one-third (33.2 percent) of the total.

The interactive map of the report: State by State: Higher Income Class on the Rise can be accessed here: http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2015/4/09/state-by-state-higher-income-class-on-the-rise

[ Writer’s Comment: Perhaps, the next logical step is to correlate inflation and its effects on American households with the National Debt. ]