The share of Dayton-area adults living in middle-income households has declined significantly over the past 15 years as more people moved into lower-income brackets with the exodus of good-paying jobs in manufacturing and other industries, a recent study from the Pew Research Center found.
About 53 percent of Dayton-area residents lived in middle-income households in 2014, down from 58 percent in 2000, according to the report, which defined the middle-class as three-person households with annual incomes ranging from $42,000 to $125,000 in 2014 inflation-adjusted dollars.
The share of middle-income households declined in 203 of the 229 U.S. metropolitan areas examined in Pew’s analysis of government data, but reasons varied, with some metro areas seeing their middle-class shrink because more people moved into upper-income brackets.
Midland, Texas, for example, which benefited greatly from the rise in oil prices from 2000 to 2014, saw its share of middle-income households fall from 53 percent to about 43 percent during the study period — but its share of upper-income households more than doubled, from 18 percent to 37 percent, at the same time.
David Homan, a Springboro resident and co-owner at Dayton-based McGohan Brabender — one of the largest independent health insurance brokers in southwest Ohio — is among the small fraction of Dayton-area residents whose financial situation has improved since the early 2000s. But Homan said many of his neighbors have seen their fortunes move in the opposite direction.
“I’m better off than I was back then, but I can certainly see how many in the Dayton community are struggling,” he said. “We’ve come out of the downturn, but I think there has been a rubber-band effect. We’re still trying to catch up. We’re not equal to where we were before, so certainly we can’t get ahead.”
The share of Dayton households moving into upper-income brackets remained largely unchanged from 2000-2014, increasing just 0.5 points to 20.4 percent, according to the study.
In Dayton, however, the hollowing out of the middle-class was clearly the result of more households moving below the middle-income threshold: About 27 percent of Dayton-area households were below the middle-income threshold in 2014, up from about 22 percent in 2000.
“There was a significant increase in Dayton in the share in the lower-income tier, and the share that were upper income remained about the same,” said Rakesh Kochhar, associate director of research at Pew, who noted that most people moved down the income ladder in eight out of 10 Ohio metros examined.
That included the neighboring Springfield metro area, where the share of adults living in middle-income households fell from 61 percent to 55 percent. Springfield also tied Goldsboro, N.C., for the biggest decline in economic status, which Pew defined as the change in the share of adults who were upper-income minus the change in the share who were lower-income from 200o to 2014.
The shrinking middle-class, overall, can be tied directly to a decline in median incomes, which fell in 190 of 229 metropolitan areas examined by Pew.
In Dayton, median incomes slid 16 percent from about $75,000 in 1999 to an inflation-adjusted $63,000 in 2014, according to the study.
A decades-long decline in manufacturing — which accounted for 13 percent of economic output in Dayton in 2014, down from 20 percent in 2000 — certainly played a role.
But new investment in emerging industries in the local area, including technology, logistics and distribution, has enhanced the economic outlook for the local area, according to Chris Kershner, vice president of public policy and economic development for the Dayton Area Chamber of Commerce.
“We had a disproportionate amount of manufacturing jobs for our local economy…and we felt a disproportionate downturn from that disinvestment,” Kershner said. “Now we’re seeing the economy rebound even stronger because we’re not putting all of our eggs in one basket anymore. We’re making sure that we have a diversified economy that supports multiple industries, a diverse demographic of employees and provides lot of opportunities for individuals seeking jobs in the Dayton region.”
That has helped has helped Dayton remain “a little more middle-class” than the nation overall, according to Kochhar, who noted that among American adults overall, including those from outside the 229 metro areas examined, the share living in middle-income households fell from 55 percent in 2000 to 51 percent in 2014.
The state of the middle-class in Dayton by the numbers:
52.7% — Share of Dayton-area households with incomes ranging from about $42,000 to $125,000 annually in 2014 for a three-person household.
5.3 — Percentage point decline in share of middle-income households in Dayton from 2000 to 2014.
$74,669 — Median income for Dayton-area households in 2000.
$62,715 — Median income for local households in 2014.
51% — The share of all U.S. households considered middle class in 2014, down from 55 percent in 2000.
Source: Pew Research Center