Spoiler alert: It costs much more in 2025 to be considered “middle class” than it did in 1990. And that makes sense, given that both wages and the cost of living have increased significantly over the past 35 years. But the data reveals something more troubling — staying in the middle class today is actually harder than it was a few decades ago.
The reason? The cost of housing, education, and quality healthcare — hallmarks of middle-class life — have outpaced wage growth. In other words, everyday expenses now take a larger bite out of household budgets than they did in 1990. Here’s what that means for Americans today.
Definition of Middle Class
Although the government likes to categorize and define data, it doesn’t have an official benchmark for what “middle class” means in America – likely because the definition is something of a moving target.
One widely cited framework comes from the Pew Research Center, which defines middle-income households as those earning between two-thirds and double the median U.S. household income, adjusted for household size.
Learn More: 9 Things the Middle Class Should Consider Downsizing To Save on Monthly Expenses
Middle-Class Income in 1990
According to U.S. Census Bureau data, the median U.S. household income in 1990 was $29,943. Adjusted for inflation using the Bureau of Labor Statistics CPI-U calculator, that amounts to roughly $74,000 in 2025 dollars.
Applying Pew’s middle-class definition to that figure gives a range of middle-class incomes in 1990 dollars:
- Lower range (≈ 67% of median): about $20,000
- Upper range (200% of median): about $60,000
Using the same ranges for 2025 equivalent dollars provides these figures:
- Lower range: about $50,000
- Upper range: about $148,000
In other words, a middle-class household earning $20,000 to $60,000 in 1990 could afford roughly what a household earning $50,000 to $148,000 can in 2025.
Middle-Class Income in 2025
Using U.S. Census Bureau data updated Sept. 9, 2025, the Federal Reserve Bank of St. Louis reports that the median household income in 2025 is about $83,700.
Using Pew’s framework, today’s middle-class income range is roughly:
- Lower bound: $56,000
- Upper bound: $167,000
On paper, this means today’s median household earns about 13% more in real terms than the same median household in 1990. But this hasn’t translated into a higher standard of living, simply because costs have risen faster than wages.
Why the Middle Class Has It Harder Today
The middle class may earn more than in 1990 on an apples-to-apples basis, but households have to stretch their money further to maintain the same standard of living. Here’s why.
Housing
Housing is typically the single largest portion of an average household’s budget. Unfortunately, housing prices have climbed much faster than incomes since 1990.
According to the Harvard Joint Center for Housing Studies, the national home price-to-income ratio hit 5:1 in 2024, with some areas topping 8:1. In 1990, the ratio was closer to 3:1.
Even worse, the HJCHS reports that even after adjusting for inflation, the average mortgage payment in 2024 was 40% higher than in 1990.
These trends show that housing is becoming increasingly unaffordable for the middle class, even with its higher relative income.
College
Research from the College Board shows that tuition and fees at both public and private universities have soared since 1990, rising much faster than median income. This has translated into rising student debt and has become a drag on the number of families who can afford to send their children to college.
Healthcare and Childcare
Data from the Bureau of Labor Statistics shows that the medical care component of the Consumer Price Index — which tracks prices for hospital services, physician visits, prescription drugs and health insurance — has increased substantially since 1990.
Over the same period, healthcare has become one of the fastest-growing household spending categories, meaning it now consumes a larger share of middle-class budgets than it did three decades ago.
The Consequence: A Shrinking Middle Class
Put it all together and it means that the middle class has been shrinking. Pew Research data indicates that in 1971, 61% of Americans lived in middle-income households, but by 2019, that number had declined to just 51%. That trendline is likely similar between 1990 and 2025, although Pew doesn’t provide that specific data.
Breaking It All Down
In a nutshell, all this data means that when compared with their 1990 counterparts, today’s middle-class households:
- Earn more in real dollars
- Spend a larger percentage of their income on housing, education and healthcare
- Represent a smaller share of the population
Depending on where you live and the type of lifestyle you lead, an income of roughly $55,000 to $170,000 places you in today’s middle class. But with expenses chewing up a larger part of your income than in 1990, budgeting and financial planning are more important than ever for maintaining “the American dream.”
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This article originally appeared on GOBankingRates.com: How Middle Class Income in 1990 Compares to 2025
