CRS – The Distribution of Household Income and the Middle Class. Craig K. Elwell, Specialist in Macroeconomic Policy, March 10, 2014

“The shape of the income distribution is not itself a subject of legislation, but Members of Congress appear to consider it in their decision-making process concerning a number of policy issues such as taxes, means-tested benefits, and social insurance programs. Congress also takes up legislation specifically in the name of those in the middle (however defined) of the income distribution who commonly are referred to as the middle class. Some Members have, for example, proposed bills to improve U.S. competitiveness as a means of increasing exports manufactured by workers in “good” (middle-class) jobs. (For example, P.L. 111-240, the Small Business Jobs Act of 2010.) Similarly, training policy generally has been crafted to provide individuals with the skills thought necessary to attain a middle-class standard of living. (For example, P.L. 105-220, the Authorization of the Workforce Investment Act.) This report first presents a brief analysis of the distribution of income across households in 2012, the latest year for which annual data are available from the Census Bureau. It then attempts to put the term middle class into greater perspective: first, by applying results from public opinion surveys on social class to the Census Bureau’s data on the income distribution in 2012; and second, by reviewing findings from empirical studies on the contribution of relative (as opposed to absolute) income to the identity of the middle class.”