US Economy

Middle-class Americans 'no longer majority'

Anmar Frangoul | Special to CNBC.com
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Middle class no longer majority of America

Middle-class Americans are now outnumbered by those above and below them and are "falling behind financially," according to a new analysis of government data by the Pew Research Center.

The beginning of 2015 saw 120.8 million adults living in middle-income homes, compared with 121.3 million Americans living in lower- and upper-income households, a significant shift that "could signal a tipping point."

According to Pew's report, the 21st century has seen "middle-income Americans" fall behind financially. The median income of middle-income households fell by 4 percent between 2000 and 2014, while median wealth — assets minus debts — fell by 28 percent between 2001 and 2013.

The shift has already spurred a range of calls to action across the political spectrum, and governments may face "a lot of pressure to act" and boost income, said Gary Shilling, president of economic research firm A. Gary Shilling and Co. He told CNBC's "Closing Bell" that it may take shape in fiscal stimulus rather than the monetary stimulus central banks have recently deployed.

Tamara Lackey | Getty Images

In 2015, 9 percent of Americans were seen as being in the highest-income tier, "more than double the 4 percent share in 1971." The percentage of American adults in the lowest-income tier has also risen, from 16 percent in 1971 to 20 percent in 2015.

In 2015, 12 percent of adults were living in the upper-middle tier, up from 10 percent in 1971. Nine percent were seen as being in the lower-middle tier, unchanged from 1971.

The report defines middle-income homes as "those with an income that is 67 percent to 200 percent ... of the overall median household income, after incomes have been adjusted for household size."

It finds that "the hollowing of the American middle class has proceeded steadily for more than four decades," and that the share of Americans residing in middle-income homes "has fallen from 61 percent in 1971 to 50 percent in 2015."

The report finds that the biggest winners since the '70s are those 65 and over. Their poverty rate has fallen from 24.6 percent in 1970 to just 10 percent in 2014. In contrast, young adults — those between 18 and 29 — have seen their share in lower income tiers increase.

Jacob Pramuk contributed to this report.