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Middle class shrinks, Census Bureau finds

The middle-class is shrinking and more Americans are becoming either rich or poor, the Census Bureau has reported.

The proportion of people with middle-range incomes fell from 71 percent in 1969 to 63 percent in 1989, the survey released Wednesday found.

The 8 percent decline in the middle range resulted in a 4 percent increase in both the upper-income and lower-income groups. The proportion with relatively high incomes rose from 11 percent to 15 percent, and the proportion with relatively low incomes rose from 18 percent to 22 percent.

"The primary story is that incomes have become more unequal," said Jack McNeil, the census economist who prepared the report.

McNeil cited two possible reasons for the inequalities:

In the high group, there are more two-income couples, many of them well-educated professionals who hold executive and administrative jobs. In the low group, there are more one-parent families with no wage-earner at all.

Wages have become less equal. Managerial pay has risen sharply, while many high-pay blue-collar jobs have disappeared. Young high school graduates in service occupations are earning much less than industrial jobs would have paid.

McNeil said the new measure of income trends, based on a survey of nearly 60,000 households, is "well-suited" for studying income inequality and for comparing one population group with another because it measures "relative income."

Traditional measures deal with such concepts as median family income and the percentage of the population below the poverty line.

Relative income supplements this information by measuring the extent to which individual income diverges from the middle.

It works this way _ individuals with less than half the middle income are considered to have low relative incomes. Those with at least twice the middle income are considered to have high relative incomes.

Figures also are adjusted for family size. For example, a family of four would need a $30,000 income to compare equally to a single person with a $15,000 income. But a family of eight would need to earn $42,433 to stay even, according to Census calculations.

Among the findings in the survey:

Blacks and Hispanics lag far behind whites. In 1989, nearly 19 percent of whites had relatively low incomes, and 29 percent had high incomes. Nearly 44 percent of blacks had low incomes, and 5 percent had relatively high incomes. About 40 percent of Hispanics had low incomes and 5 percent had relatively high incomes.

Poverty among children is increasing. In 1969, about 19 percent of people under 18 had relatively low income, rising to 29 percent in 1989. The proportion of children living in married-couple families fell from 87 percent in 1969 to 75 percent in 1989. Only 39 percent of black children under 6 lived in two-parent families in 1989, down from 66.5 percent 20 years earlier.

The proportion of people over 65 with relatively low incomes declined from 42 percent in 1969 to 31.5 percent in 1989, but remains well above the low-income rate of 17 percent for people 18 to 64.

Education is becoming more important financially. More than 38 percent of people without a high school diploma had relatively low incomes in 1989, up from 22 percent in 1969. The low-income rate for college graduates was 4.6 percent in 1989.

The survey found that 23.5 percent of people 25 to 64 had completed college in 1989. That's nearly double the 12.2 percent who had completed college in 1969.