Is the Middle Class Shrinking?

When the drift was first spotted in the early 1980s, it stirred only academic interest. But this year, as more economists and politicians began to take note of it, the seemingly slight squiggle on the demographic chart has sparked a fervent debate. The great American middle class, the provocateurs contend, is no longer so great. It is shrinking steadily, goes the theory, and shedding its members into the economic extremes of wealth and poverty. "There has been a thinning of the middle class," says David Bloom, an associate professor of economics at Harvard. "As society becomes more polarized, it has more...