California's Middle Class in Transition: A Look at Income and Demographic Changes

The steady decline of the American middle class is no secret: According to the Pew Research Center, the share of Americans in middle-income households decreased from 61% to 52% over the past five decades. California, in particular, is experiencing a significant shrinkage of its middle earners, as evidenced by a recent study from the nonprofit organization California Community Builders. Between 2000 and 2019, California lost 7% of its residents in this income bracket, which is defined as individuals earning 80% to 200% of the median income for the region. This income threshold varies depending on the place of residence. Furthermore, the state has the 20th largest wealth gap between ethnic groups in the United States. White residents earn about 36% more than their Black counterparts, according to a study by Wallethub. Hispanics in California also suffer from the largest poverty gaps and the greatest challenges in the educational sector. But what does it mean to belong to the middle class in California today? The Pew Research Center describes the middle class as households earning between two-thirds and double the national median household income. In 2022, this income range was between $56,600 and $169,800 on a national level. Using this definition, GOBankingRates calculated that Californian households must earn between $61,269 and $183,810 to be considered middle class. The median household income in California is $91,905, thus falling squarely within this income range. In an updated version for 2024, the Pew Research Center's income tool determines whether someone qualifies as middle class based on income, household size, and the cost of living in the state and metropolitan area. Users can also assess their social standing compared to others with similar educational backgrounds, age, and ethnic background.