Over 14 years, Seattle has seen a big drop in middle-income adults. But the overall picture isn't as bad when we compare apples to apples.
Delving into the data of the latest Pew Research Center report on the hollowing out of the middle class, I was surprised how well Seattle held up among the 229 metros listed.
Let me explain: Middle-income adults are under pressure all over the country, with few exceptions. But considering how much attention the issue (rightly, if sometimes in an unfocused way) gets here, the metropolitan area is still majority “middle class.”
In 2000, 59.4 percent of adults were in the middle-income tier in Seattle-Tacoma-Bellevue. In 2014, that had fallen to 52.6 percent. Pew defines middle income as a three-person household with annual income between $42,000 and $125,000.
The income tier below $42,000 grew from 20.1 percent to 21.3 percent of the adult population during this time. The tier above $125,000 grew from 20.5 percent to 26.2 percent.
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San Diego’s middle fell from 53.1 percent to 50.4 percent. San Francisco-Oakland’s dropped from 52.7 percent to 47.7. And the middle tier in Silicon Valley declined from 52.8 percent in 2000 to 48.5 percent in 2014.
So if we look at the percentage of adults in the middle-income tier in 2014, Seattle still outperforms these coastal technopolis peers.
But that’s only one way to view the data. For example, in 2000, Seattle was more of an outlier compared with the California metros, where middle-earners had long been under pressure (having lived in “sunshine dollars” in San Diego, I can attest). So the nearly 7 percentage point fall in Seattle during those years is undeniably jarring.
Meanwhile, the lower tier rose 1.2 percentage points and the upper tier rose 5.7 percentage points. According to Pew, overall Seattle had a net gain of about 4 percentage points in the share of adults who were upper income minus the change in the share of lower-income adults. This doesn’t necessarily mean the same adults rose or fell; some might have relocated, while other high-income people moved here.
Considering the state of the economy and broader trends hammering average Americans, this is better than we might have expected. After all, in 2014 the middle-income tier did not constitute a majority in nearly a quarter of American metros.
Portland saw a net minus 0.5 percentage point overall. Its lower third rose from 22 percent to 25 percent; middle fell from 59.4 percent to 53.7 percent, and the higher tier rose from 18.7 percent to 21.3 percent. Phoenix, with all its cheap housing, fell 0.1 percentage point and had 52.3 percent of adults in the middle tier in 2014.
Make no mistake: The hollowing out of the middle class has broad and negative economic, social and political implications for America. While Seattle didn’t perform as badly as anecdotes suggest, many will fear we’re on track to losing even the modest majority of middle-income earners we have.
You can read the Pew report here and download the data for the metros.
Today’s Econ Haiku:
Seattle’s next step
Leading ‘intelligent apps’
Hey, dude, where’s my job?