What the public doesn’t know
Many readers may have first come across Elizabeth Warren (as I did) in an online lecture: “The Coming Collapse of the Middle Class: Higher Risks, Lower Rewards, and a Shrinking Safety Net.” The then-Harvard Law professor lectured in the glow of her 2003 book, “The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke.” Warren described how since the Reagan administration the rich got richer and the rest got screwed. (She put it more delicately.)
The America Prospect this morning argues that Commerce Department’s Bureau of Economic Analysis should in the public interest publish data it surely has that would make Warren’s case without her (or you) having to do the research.
“Last year, America’s current-dollar GDP grew 6.6 percent to over $26,000,000,000—one quarter of the entire world’s total output, produced by just 6 percent of the world’s population,” explains Richard Parker. Yes, but who benefited?
And so when the latest GDP number is announced, it’s front-page news in newspapers and magazines everywhere, a leading story for TV and radio, and the preoccupation of an almost uncountable number of online sites. But you may have noticed something strange about GDP: Because it’s a measure of the total economy’s output, it’s silent about how that output is divided among Americans. We’ve been living—and are living right now—in a nation with ever-increasing inequality, which makes the question of who gets how much of the GDP as important as GDP itself. And that makes it time for the government to start measuring and reporting more than GDP’s sum of our aggregate production. We need to know how GDP growth is distributed.
Let’s for the moment call such a measure the GDD—for “gross domestic distribution.” (I’ll explain how it would work in a moment.)
Most Americans already know that America has been growing ever more unequal—but beyond that, they know few details. Government tells them that GDP is still growing—by 5.2 percent in the last quarter—but not that nearly all of that growth is captured by the wealthiest 10 percent, and especially the top 1 percent.
Yet what most Americans know intuitively is that life for the Great American Middle Class has gotten much harder—something the government’s own data has been recording since the 1970s. That data shows that, to begin with, the broad middle class’s share of total household income has fallen from over 60 percent in the 1970s to barely 40 percent. Among young Americans—the millennials—far fewer are earning more than their parents at the same age, and the gap is growing wider, especially for the majority who lack college degrees.
Yet because that’s been a steady, slow-rolling decline, officials haven’t talked about what’s happening the way they do for a significant “event” like the Great Depression—or our recent Great Recession and COVID lockdown. Like the frog in the pot that gets hotter slowly, the temperature keeps rising—but the frog doesn’t jump.
Parker’s complaint is that while the data is there, it’s not available in user-friendly form (something I’ve found across the country with state election data).
What the BEA doesn’t do is tell you how Americans’ income can be broken out and arranged by the size of their incomes—ranked by the top 10 percent, say, or the middle fifth, or the bottom half. Thus, you won’t learn from the BEA where income has been flowing over the years—how much to the one percent or the poor or the middle class. That is, needless to say, elementary information for addressing income inequality—a serious topic to, let me remind you, 80 percent of Americans nowadays.
What the public doesn’t know won’t upset the status quo. Is that by design? The problem is (Parker dons his tinfoil hat, and I mine), “the government has a vast amount of detailed, publicly available information about the distribution of Americans’ income. It’s just that apparently the public doesn’t know it.”
Thus, here’s how a Harvard Business School study found Americans think income gets distributed vs. how it really is and how they think it should be:
As I’ve found with election data, Parker found after inquiring if “the BEA would be open to adding GDD data from the Census Bureau to its GDP reports,” that the issue comes down to bureaucratic turf and budgeting. Mustn’t pull back the curtain and reveal the Wizards.
A 2022 report by the nonprofit Washington Center for Equitable Growth recommended:
The federal statistical system needs to be resourced to expand and continue reporting on inequality … Four decades of rising inequality calls for a more robust policy response to ensure broad-based growth in the U.S. economy. An important first step is to develop the data infrastructure to track growth in inequality over time, so that policymakers can monitor and respond to the problem, and voters can hold them accountable to producing strong growth for all U.S. households.
I could say something similar about state election data. But now that’s 50 agencies and budgets. Imagine what happens to all the federal data with MAGA lackeys in charge.