Honolulu bucks U.S. trend of a shrinking middle class
  • Monday, May 20, 2019
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Honolulu bucks U.S. trend of a shrinking middle class

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 Wednesday 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 census considers urban Honolulu as the stretch from East Honolulu to Red Hill, encompassing the ZIP codes that start with 968.

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

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 might 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 firsthand. 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.

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

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    • They’re using mainland numbers. The City says its median income is $78,000 — which means the range of 2/3 to 2X that amount is $52,000 to $156,000 (so while Pew says a family making $42,000 should be “middle class,” they would actually NOT be middle class in Honolulu, by Pew’s own standards, because the numbers are wrong). Also, the article yesterday linked to a Pew graph that said the numbers were adjusted to account for “living in a metropolitan city” which is NOT the same as the Star-Advertise saying the numbers were adjusted for “local cost of living.” But I see the link to the graph is now gone. This article is VERY misleading, and I think the paper did that to push its own agenda.

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

    Maybe the lower-income people are being pushed out of the core city by high rent and the middle class isn’t increasing. To explain, say you have 3 lower income people, 4 middle class ad 3 upper income, that’s 30% (3/10),40% (4/10), 30% (3/10)%. But if one of the lower income people leaves, you now have 2/9, 4/9 and 3/9, so the middle class is now 44% (formerly 40%) and the rich are 33% (formerly 30%. So the middle class hasn’t increased at all.

    There is an old book called “How to lie with statistics”. It should be required reading for journalists.

    • Bothrops, using your calculations, middle class is now 44% of the population. It was 40% of the population previously, so middle class has just increased by 10% of the population…..right?

      • Yes but only because the lower income people have left. If all three lower income folks left, you would have 57% (4/7) middle class even though the actual number of middle class had not changed. Percentages are a result of both numerator and denominator so if the first increases or the second decreases, you get an increase in percentage. Or to put it in real terms, if we shipped all the lower income folks off to Waianae, the percentage of middle class people would increase in the urban area, but no one would be better off in the urban area or in Waianae.

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