The fact that the middle class is shrinking is not news to anyone, but the fact that more people are leaving the middle class and climbing the class ladder, as opposed to descending it, might be a bit surprising. But, as CNN Money reports, just because more Americans are rising out of the middle class doesn’t mean they are better off.
The problem is that the median income has declined in every state except four, after adjusting for inflation. While these Americans might be in a higher socioeconomic class, they may still be doing worse than they were in 2000.
The Pew Research Center defines the middle class as including people making between two-thirds of and twice a state’s median household income, but because median income varies wildly by state, that's a very wide range.
Regardless of whether people are moving up or down the ladder as they leave the middle class and whether they are better off than before, the shrinking of the middle class is still worrisome to many economists, who see it as a sign of increasing income inequality.