Trump Claims He Boosted U.S. Incomes by $7,000. Data Say Otherwise
Trump’s Claim He Boosted Incomes by $7,000 Differs From Actual Data
(Bloomberg) --
President Donald Trump boasted on Monday that American incomes have skyrocketed during his presidency, surpassing gains under his predecessors, a claim that isn’t supported by official government data.
Trump said at a Cabinet meeting that over 2 1/2 years, net incomes “rose $5,000, not including $2,000 for taxes, so it rose, let’s say, $7,000.” He also reposted a tweet over the weekend from an employee of conservative group Turning Point USA, who touted similar figures.
Trump’s estimates came from his Council of Economic Advisers that’s charged with providing advice on economic policy, according to a White House spokesperson. A June CEA report estimated that government deregulation will provide an inflation-adjusted $3,100 per household annually by 2021 and a separate White House statement showed that the Republican tax cuts package will bump that up to about $6,600 for the average household. In his comments Monday, Trump rounded the figure up to $7,000.
So far, official data don’t reflect that optimism over Americans’ incomes.
Inflation-adjusted median income rose $1,400 in the past two years, or 2.3% from 2016 to 2018, according to the U.S. Census Bureau, the government agency that tracks and compiles incomes. That compares with a 5% gain under former President Barack Obama, who took office during the last recession, and a decline of 4.2% under George W. Bush, which included the start of the 2008 financial crisis.
Even if you add estimates on the benefit from the Republican tax cuts, income gains still don’t rise to the level that Trump highlighted. The Urban-Brookings Tax Policy Center estimates that middle-income earners received a $930 reduction in taxes on average for the overhaul passed in late 2017. But Trump’s tariffs on Chinese goods all but wiped out those benefits, according to research from the Federal Reserve Bank of New York.
Bureau of Labor Statistics data on inflation-adjusted median weekly earnings show even more moderate pay gains so far during Trump’s term, albeit stronger than the increases for his previous two predecessors. In the third quarter, median weekly earnings were $360, up $11 from the fourth quarter of 2016. That’s more than the gains during either the entire Obama or Bush presidency.
Trump re-posted a White House tweet Tuesday touting that wage gains under his administration “eclipsed growth under the past two administrations, multiple times over." The pace of earnings growth has generally accelerated in recent years as the labor market tightened and the economic expansion became the longest on record.
More broadly, incomes have gained every year since 2013, but that growth hasn’t been even. Inequality has contributed to a widening divide between households at the top and the bottom, with the top 10% richest Americans the only group who saw their share of wealth expand in the past several decades. The trend is also leaving the middle class behind in major cities, with gains in the richest households outpacing them.
--With assistance from Laura Davison.
To contact the reporters on this story: Katia Dmitrieva in Washington at edmitrieva1@bloomberg.net;Reade Pickert in Washington at epickert@bloomberg.net;Jordan Fabian in Washington at jfabian6@bloomberg.net
To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, ;Alex Wayne at awayne3@bloomberg.net, Vince Golle
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