Schumer, Heinrich Introduce Legislation To Require New Income Growth Data Alongside Quarterly GDP ReportsAugust 28, 2018
For Decades, The Federal Government Has Not Measured Whether Working Families Have Seen A Benefit In Line With GDP Growth
Schumer-Heinrich Bill Would Require Data Allowing Us To See How Economic Growth May Have Benefited Working Americans Compared To The Top 1 Percent Of Income Earners
WASHINGTON, D.C. – Today, Senate Democratic Leader Chuck Schumer (D-N.Y.) and U.S. Senator Martin Heinrich (D-N.M.), Ranking Member of the Joint Economic Committee, introduced the Measuring Real Income Growth Act of 2018, which would require the Bureau of Economic Analysis (BEA) to report how economic growth is distributed across the income spectrum. This data would help to put quarterly GDP growth numbers in context, as it would provide a breakdown of the economic benefits seen by individuals across different segments of the economy. In short, this bill would provide policymakers with metrics that better reflect the economic experiences of all Americans, not just top income earners.
“America's working families deserve the full picture when the federal government publishes data showing how the economy is doing, especially with quarterly Gross Domestic Product (GDP) numbers,” said Senate Democratic Leader Chuck Schumer. “For too long, we have relied on GDP data as a bellwether for how Americans were faring in our economy. Too often, when we hear that GDP is rising and the economy is booming, there is an implication that all Americans are reaping the benefits equally – yet the reality is that wages for workers in the middle class remain flat and the income inequality gap continues to widen. This legislation seeks to cut to the heart of the matter and present a clear and accurate picture of who the economy is really working for.”
“Instead of focusing on one economic indicator closely watched by investors, we should be examining data that captures why many families are still struggling to make ends meet,” said Senator Martin Heinrich (D-N.M.), Ranking Member of the Joint Economic Committee. “Only looking at headline GDP growth numbers to assess the state of our economy simply does not paint the whole picture, and leaves out the reality that many Americans have not seen their wages rise for years. Our priority should be ensuring that every New Mexican – and every American – can succeed in today’s economy. This legislation would provide Congress with the information to take real steps needed to finally address income inequality and the economic needs of all Americans.”
“We commend Senators Schumer and Heinrich for introducing this legislation,” said Heather Boushey, Executive Director and Chief Economist at the Center for Equitable Growth. “This is an important first step toward understanding how today’s economy is or is not working for most U.S. families. It is not enough to know how rapidly the economy is growing. Americans want and need to know how the economy is performing for people like them. Evidence shows that broad-based economic growth is key to building a strong economy, and that starts with collecting the data that allow policymakers to understand how the economy is performing for all Americans. Our statistical agencies do incredible work tracking and reporting on the state of the economy, but they are currently limited in their ability to accurately measure how economic progress is distributed amongst Americans. The first step for policymakers seeking to address economic inequality is measuring and understanding it. The ‘Measuring Real Income Growth Act of 2018’ will make resources available to ensure that the government measures not only how much the economy is growing but also how that growth is distributed.”
Relying on top-line Gross Domestic Product (GDP) and GDP growth numbers masks important trends and may lead to policies that do not accurately reflect the economic reality of most families in America. Currently, the lack of consistent and up-to-date reporting on income distribution growth means that policymakers have no real-time sense of whether or not the economic growth we see today is reflective of growing income inequality.
Specifically, the bill would require the BEA to produce distributional measures of economic growth, called Income Growth Indicators (IGI), by each decile of income earners and the top 1 percent, allowing us to measure whether economic growth is benefitting all Americans. It would also require the agency to report their most recent IGI estimates with each quarterly and annual GDP release, beginning in 2020.
Congresswoman Carolyn B. Maloney (NY-12) plans to introduce a companion bill in the House.
A summary of the Measuring Real Income Growth Act of 2018 is available here.