Anne Kim, Adam Solomon, Bernard L. Schwartz, Jim Kessler, and Stephen Rose write,

the “real” middle class is made up of households in their prime working years, ages 25-59, 75 percent of whom are couples and 56 percent of whom are couples with two earners. The median income of these prime age households is more than $61,000. If it is a married-couple household, the median is more than $72,000. And if both spouses work, the median is more than $81,000.

Other key points they make:

–some of the volatility in income reflects childbearing women leaving and re-entering the labor force

–official personal savings figures are understated because they fail to take into account “sweat equity” accumulated in personal businesses (they calculate this as 5 percent of income from 1990 through 2003).

–the trust that makes impersonal markets work requires government regulation

Overall, the paper reflects a “can-do” vision for government. Government can do all sorts of things that will help people, if leaders will just grasp the ways in which the economy has changed. For example, they think that government can make college education more “accessible.”

Thanks to Tyler Cowen for the pointer.