Special Report

States Where the Middle Class Is Dying

Methodology

To determine the states where the middle class is suffering the most, 24/7 Wall St. used data on the average pre-tax income earned by each income quintile from the U.S. Census Bureau’s 2014 American Community Survey (ACS). We defined middle class as the third quintile, or the middle 20% of earners. We examined the growth in average incomes in the third and fifth quintiles between 2010 and 2014 to identify income trends in the middle and upper class. The final list is composed of states where middle class incomes fell by more than 0.8% and fifth quintile incomes rose by more than 2.5%. Because ACS income data reflect pre-tax levels, they may overstate the degree of income inequality in the poorer quintiles. However, it is unlikely that the tax burden of the third quintile is significant enough to skew the data.

We also looked at data on the share of aggregate income by quintile from the ACS, and how that share changed between 2010 and 2014. Also from the ACS, we reviewed poverty rates and the Gini coefficients. The Gini coefficient indicates the degree to which incomes in an area deviate from a perfectly equal income distribution. Scaled between 0 and 1, a coefficient of 0 represents perfectly equal incomes among all people. All data are from 2010 to 2014. From the Bureau of Labor Statistics (BLS), we looked at annual unemployment rates from 2010 through 2014. The percentage of non-agricultural employees who identify as members of a union came from Unionstats.org. Tax data came from the Tax Foundation, and reflect sales tax rates as of January 1, 2016.

Click here to see the states where the middle class is dying.

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