America's middle class has shrunk over the last half century as the economy rewards some and punishes others

• The middle class has shrunk since 1971, according to a new Pew Research Center report.
• From 1970 to 2020, upper-income households have seen their incomes grow the most.

In 1971, a whole lot more American adults were living in a middle-class household. That's not the case today, as the middle class has shrunk in the last five decades — and the richest households have seen their earnings swell.

According to a new Pew Research Center study, which analyzes the Census Bureau's Current Population Survey Annual Social and Economic Supplements, in 1971, the share of adults living in a middle-class household came in at 61%.

That share shrank steadily from 1971 to 2011, and has remained static since, per Pew. In 2021, it was at just 50%. The share of adults in upper-income households rose from 14% to 21% during the same period; meanwhile, lower-income households have seen their share grow from 25% to 29%.

Pew defines middle-class as households where the income is two-thirds to double the country's median income, while lower-income households fall below two-thirds of the median income and upper-income households make at least double.

At the same time, incomes have risen across the board — but the richest households saw the biggest bump. From 1970 to 2020, upper-income households' incomes grew by 69%. The shrinking middle class saw their incomes grow by 50%, while lower-income households saw incomes grow by 45%.

In 1970, median income for the highest earners was $130,008 in 2020 dollars; in 2020, it was $219,572. The middle class still isn't earning the upper income's 1970 median income after adjusting for inflation: Median income for the middle class was $59,934 in 2020 dollars, and grew to $90,131 in 2020. Meanwhile, lower income households made a median $20,604 in 1970, and just $29,963 in 2020.

Part of that has to do with the pandemic: As the K-shaped recovery began to take root, lower and middle income households saw their incomes take a big hit, but the highest-earning households saw incomes hold strong — creating a deeper wedge in already-growing income inequality.

Median incomes were higher across the board in 2019 than in 2020. And, as Pew notes, median incomes were ticking up at around the same pace from 2010 to 2019. But the pandemic's impact was unevenly felt.

For upper-income households, median income "was statistically no different than what it was in 2019." Meanwhile, lower income households saw a 3% hit to income from 2019 to 2020, and the middle class saw a 2.1% hit.

"As a result of these trends, the income gap between upper-income and other households stretched a bit wider from 2010 to 2020," Rakesh Kochhar and Stella Sechopoulos write in the Pew report.

Income inequality wasn't a new feature of the pandemic. Prior to 2020, there was already a two-track economy emerging, where the wealthiest Americans were reaping the rewards of a booming economy. The pandemic helped solidify that divide between rich and poor, as America's billionaires saw their wealth grow by 62%.

Meanwhile, research from the Brookings Institution found that lower the income of a household, the higher their loss of income during the pandemic.