States Where the Middle Class Is Being Left Behind

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10. Arizona
> 10-yr. chg. in middle class income share: -0.5 ppts.
> Middle class share of income: 15.1% (2007), 14.6% (2016)
> Upper class share of income: 48.7% (2007), 50.6% (2016)
> Lower class share of income: 3.8% (2007), 3.2% (2016)

Income growth among the country’s top earners in the last 10 years has far outpaced income growth among the middle and lower class. The uneven income growth has resulted in a smaller middle class and greater income inequality overall. In Arizona, the income generated by the middle quintile of households fell from 15.1% of all income in the state in 2007 to 14.6% in 2016, one of the larger declines of any state.

Over that time, the income generated by the wealthiest quintile rose from 48.7% of all income to 50.6%, one of the larger increases in the country. The median household income of the wealthiest fifth of households rose 16.4%, more than twice the 8.1% income growth among the middle fifth of earners. The median household income among the poorest quintile of households actually decreased 3.7% in Arizona, one of only four states in which the poorest fifth of earners became even poorer in the past decade.

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9. California
> 10-yr. chg. in middle class income share: -0.5 ppts.
> Middle class share of income: 14.6% (2007), 14.1% (2016)
> Upper class share of income: 50.5% (2007), 52.2% (2016)
> Lower class share of income: 3.4% (2007), 3.0% (2016)

Incomes among the wealthiest fifth of California households increased by 22.4% in the last 10 years, nearly eight times the 2.9% income growth among the poorest fifth of households in the state and far more than the 14.0% income growth among the middle quintile. The rapid growth of upper-class incomes relative to the lowest and middle quintiles of earners in California has contributed to the shrinking of the state’s middle class. The income generated by the middle quintile of earners as a share of all earnings in the state fell from 14.6% in 2007 to 14.1% in 2016, one of the larger declines of any state.

The rapid income growth of California’s upper class relative to the rest of the state may have partially contributed to the overall rise in housing costs throughout the state. Many more middle class households in the state pay more in housing costs today than they did 10 years ago. The share of households earning between $35,000 and $75,000 a year that pay more than a third of their income on housing in California rose from 49.2% in 2007 to 52.5% in 2016, one of the largest increases of any state.

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8. Iowa
> 10-yr. chg. in middle class income share: -0.6 ppts.
> Middle class share of income: 15.9% (2007), 15.3% (2016)
> Upper class share of income: 46.6% (2007), 48.2% (2016)
> Lower class share of income: 4.1% (2007), 3.8% (2016)

The median income of Iowa’s wealthiest fifth of households increased by 28.3% over the past 10 years, while the income of the middle fifth of earners rose by 19.2 — one of the largest differentials in the country. The income earned by middle class households as a share of all income in the state fell from 15.9% in 2007 to 15.3% in 2016, one of the largest declines of any state. Meanwhile, earnings of the wealthiest 20% of households rose from 46.6% of total income to 48.2%, one of the larger increases in the country. Income growth among Iowa’s upper class also far outpaced that of the lower class.

Rapid income growth among Iowa’s wealthiest residents likely contributed to the rising cost of housing in the state over the past decade — at the expense of Iowa’s poorer residents. The cost of the typical household in Iowa rose more than three times as fast as the country as a whole in the last 10 years, and the share of households earning less than $35,000 a year in Iowa who spend at least 30% of their incomes on housing costs rose from 54.3% in 2007 to 62.9% in 2016 — the fifth largest increase of any state.