comscore Honolulu bucks trend of shrinking middle class, study finds | Honolulu Star-Advertiser
Business Breaking | Top News

Honolulu bucks trend of shrinking middle class, study finds

  • JAMM AQUINO / JAQUINO@STARADVERTISER.COM

    Homes are seen in St. Louis Heights on Thursday, December 31, 2015 in Honolulu.

  • STAR-ADVERTISER / FEB. 21, 2014

    The number of middle-income and upper-income residents in urban Honolulu has risen between 2000 and 2014, according to a new study. During the same period, new highrises have also gone up in Kakaako, changing the urban Honolulu skyline.

  • ASSOCIATED PRESS

    Wendell Nolen said he has experienced the slide from middle-class status firsthand, in Hamtramck, Mich.

WASHINGTON » In cities across America, the middle class is hollowing out. However, Honolulu’s middle class appears to be increasing.

A widening wealth gap is moving more households into either higher- or lower-income groups in major metro areas, with fewer remaining in the middle, according to a report released today by the Pew Research Center.

In nearly one-quarter of metro areas however, middle-class adults no longer make up a majority, the Pew analysis found. That’s up from fewer than 10 percent of metro areas in 2000.

(In the census-designated area considered as urban Honolulu, about 63 percent of residents are considered middle class. That ranks Honolulu among the top 10 cities for middle class residents. The cencus considers the urban Honolulu as the stretch from East Honolulu to Red Hill, encompassing the zipcodes that start with 968.

The study showed the percentage of people considered middle class rose from 59 percent ot 63 percent in urban Honolulu between 2000 and 2014. Upper income residents also increased from about 13 percent to 15 pecent of residents and the percentage of lower income residents decreased from 28 percent in 2000 to a little less than 22 percent in 2014).

Pew defines the middle class as households with incomes between two-thirds of median income and twice the median, adjusted for household size and the local cost of living. The median is midway between richest and poorest. By Pew’s definition, a three-person household was middle class in 2014 if its annual income fell between $42,000 and $125,000.

Middle class adults now make up less than half the population in such cities as New York, Los Angeles, Boston and Houston.

That sharp shift reflects a broader erosion that occurred from 2000 through 2014. Over that time, the middle class shrank in nine out of every 10 metro areas, Pew found.

“The shrinking of the American middle class is a pervasive phenomenon,” said Rakesh Kochhar, associate research director for Pew and the lead author of the report. “It has increased the polarization in incomes.”

The squeezing of the middle class has animated this year’s presidential campaign, lifting the insurgent candidacies of Donald Trump and Bernie Sanders. Many experts warn that widening income inequality may slow economic growth and make social mobility more difficult. Academic research has found that compared with children in more economically mixed communities, children raised in predominantly lower-income neighborhoods are less likely to move into the middle class.

Wendell Nolen, 52, has experienced the slide from middle-class status first-hand. Eight years ago, he was earning $28 an hour as a factory worker for Detroit’s American Axle and Manufacturing Holdings, assembling axles for pickup trucks and SUVs.

But early in 2008, the good life unraveled. After a three-month strike, Nolen took a buyout rather than a pay cut. Less than a year later, the plant was closed and American Axle shipped much of its work to Mexico.

Now Nolen makes $17 an hour in the shipping department of a Detroit steel fabricator, about 40 percent less than he made at the axle plant.

“America is losing jobs because of the free trade stuff,” Nolen said. “They’re selling America out.”

Nationally, the proportion of middle class adults shrank to 51 percent in 2014 from 55 percent in 2000, Pew found. Upper-income adults now constitute 20 percent of the population, up from 17 percent. The lower-income share has risen to 29 percent from 28 percent.

Yet the changes have been much more dramatic at the local level. There are now 79 metro areas in which the proportion of adults in upper-income households equals or exceeds the national average of 20 percent. That’s more than double the 37 cities in which that was true in 2000.

The trend hasn’t been quite as pronounced in the other direction: In 103 metro areas, 29 percent or more of adults now live in poor households, up from 92 in 2000.

The report studied 229 of the largest U.S. metro areas, which constituted 76 percent of the U.S. population.

Overall, cities with the largest middle classes are more likely to be in the Midwest. Those with the biggest low-income populations are more often in the Southwest, particularly near the Mexico border. Metro areas with the highest proportions of upper-income households are more likely to be found in the Northeast or along the West Coast.

Even many of the cities with substantial middle-class populations are still under stress, according to Pew’s research. For example, Wausau, Wisconsin, and Youngstown-Warren, Ohio, are among the cities with the largest proportions of adults in middle-class homes, at 67.2 percent and 60.2 percent, respectively.

Yet median incomes have fallen sharply in both cities. They fell 8.5 percent in Wausau and 12.9 percent in Youngstown, Pew found. That compares with an 8 percent drop from 2000 to 2014 nationwide.

In addition, both cities have seen their lower-income population shares grow, while upper-incomes shrank. That suggests their middle classes have been bolstered by downward mobility, as some richer households fell into the middle, and middle-income earners fell into lower brackets.

In some cases, many former middle-class residents have moved up. In others, they have fallen lower.

For example, middle-class adults now constitute just 48.6 percent of the population in Boston, down from nearly 56 percent in 2000. Nearly the entire change reflects an increase in upper-income earners, which jumped 7 percentage points to nearly 30 percent. The lower-income proportion remained about 21.5 percent.

In Atlanta, the middle-income population has fallen to 50.5 percent of the total from 56 percent. There are fewer higher-earners too: Their share fell about 1 percentage point to 22.6 percent. The gains occurred among lower-income adults, who jumped 7 points to 27 percent.

The national figures reflect a broad divide: More people moved up than down in 119 communities, Pew found, while the reverse was true in 110.

_____

Star-Advertiser web producer Craig Gima contributed to this report.

Click here to see our full coverage of the coronavirus outbreak. Submit your coronavirus news tip.

Comments (42)

By participating in online discussions you acknowledge that you have agreed to the Terms of Service. An insightful discussion of ideas and viewpoints is encouraged, but comments must be civil and in good taste, with no personal attacks. If your comments are inappropriate, you may be banned from posting. Report comments if you believe they do not follow our guidelines.

Having trouble with comments? Learn more here.

Leave a Reply

      • Well, Trump was born into a millionaire household, and he’s now a billionaire. Since he, at some point in his life, fell between the middle of “rich” and “filthy rich,” that would mean he knows what it means to be “middle” class.

        #ConservativeLogic

        • So much an advocate of the middle class that now refuses to release ANY of his tax returns….what does that tell you?

        • Sounds like Obama who for the past 8 years has refused to reveal any of his educational records.

        • D-bullfighter. Here are a couple of things to ponder, as I can tell you don’t have really a thinking cap. One admission to law school requires a bachelors degree, no exceptions. Graduating Magana Cum Laude (or a cumulative gpa between 3.75 to 4.0) means he was near the top of his class at Harvard, as does, being president of the Harvard Law Review. Finally bar admission requires completion law school. So, am I to understand Columbia University and Harvard Law School, as well as the American Bar Association are all in conspiracy of making this all up??

          You are officially the pillock simp knave of the day. For good measure, here is a link, is sure by Harvard Law School itself, with picture of him — http://today.law.harvard.edu/obama-first-made-history-at-hls/

      • say what the middle class voters wants to hear…that’s as far up the middle he’s going to go ..in fact I would be surprised if any politician is fighting for the middle class in their actions……

  • Those of you that have never seen “the other America” suggest this summer you rent a car and drive from New York to California and through the Mid West. Get off this rock and see something else.

    • I’ll add to that…for those who’ve never been out of the country, maybe take a trip this summer, even to another 1st world nation and you’ll see how good Americans still have it compared to everyone else. Better yet, take a trip to a 3rd world country and it’ll be an eye-opener.

        • Yes, exactly. When you see people living in shantytowns and cesspools you’ll realize we all have nothing to grumble about. We are so lucky to have choices, granted many of us make poor choices yet that’s all on us. We all have incredible opportunities as Americans and sadly many of us squander it and blame others.

    • agree…I am from North Dakota and was homeless for 18 months as a child. You think Waianae is poor? It is not luxury city. Try real rural poverty.

  • Look at all of the cities explicitly mentioned in this article: New York, Los Angeles, Boston, Houston, Atlanta, Detroit and Youngstown (OH). Guess which political party runs these cities…

    • You’re suffering from “confirmation bias” — seeing everything as a confirmation of your pre-conceived conclusions, even if the facts stated in the article contradict those beliefs. In Boston, for example, the article stated that the middle class declined as a percentage of the whole because of a 7% increase in higher earners. Guess which political party runs that city.

      • You’re making the mistake of using facts and statistics. And the mistake of assuming that most folks here who comment on complicated macroeconomic studies graduated from high school. Remember Mr. Trump’s central marketing theme: “I love the poorly educated!”

        Go Trump!

    • You pillock, the most successful cities and states are by and far D. From NYC to Boston to San Francisco to DC to Seattle to Minneapolis to Austin…and its now even close. R states are the poorest, most uneducated, least diverse, least healthy and more apt for crime. Facts, not silly platitudes.

  • So be sure to vote for Hillary this fall, we’ve had enough of this Democrat economic assault on the middle and lower classes. Oh wait, she’s promising more of the same. What to do?

  • Wasn’t Obama president during this period of “Hope and Change”? Now Hilliar,y wants to finish the job by making everyone dependant on government.

  • so a 3-person household making more than $125,000 annually is considered upper income then? sure don’t feel like it. still living paycheck to paycheck.

  • The Star-Ad says this, “adjusted for household size and the local cost of living.” But the fine print at the bottom of the map says this, “Adjustments are also made for the cost of living in a metropolitan area.” The two are not the same. If the adjustment were made based on generally higher costs for living in a metropolitan area, that is NOT the same as adjusting for Honolulu having the highest housing and cost of living in the nation. Does anyone here really think that a family of three earning a total of $42,000 in Honolulu is “middle income”? As an example, the City’s “affordable” apartments in Kakaako have an income limit of 140% of Honolulu’s median income, and the example given is $109,000 for a family of 3. If that’s 140% of the median, that means the median is approximately $78,000 — so then using the Pew definition of middle income (2/3 of the median to 2X the median), the true middle income in Honolulu is $52,000 to $156,000, not Pew’s $42,000 to $125. It looks like Pew is using mainland numbers. What might be middle income on the mainland can leave you homeless in Hawaii. (I got my figures here: http://www.honoluluhi5.com/blog/ke-kilohana-new-kakaako-condo/)

  • This article’s conclusions when you consider the ever increasing cost of living here are a joke. The middle class is disappearing here just as fast if not faster,
    Why do you think, those in the ruling political class and their cronies are busy grabbing every thing they can, while they can and why corruption is so widespread.
    Very soon, there will only be the very rich and the rest. There will not be any middle class.

  • $42k is middle income? Might pay taxes, rent, and utilities, but what about food and anything else? The author of this should come here and try to support his family on $42k before trying to tell anyone that $42k is middle class.

  • “The census (sic) considers the urban Honolulu as the stretch from East Honolulu to Red Hill, encompassing the zipcodes that start with 968.” SO if the poorer people were forced out of this part of Honolulu to the rest of the island because of higher rents, the percentage of “middle class” of survivors left in the core area would increase, giving the study its pseudo results. Math illiteracy?

Scroll Up