Must-Read: Gary Burtless: This Pessimistic Conclusion Does Not Correspond with Other Indicators

Must-Read: People who say that America today is in aggregate poorer than it was in 2000–or in 2008-9–are almost surely wrong. Economic performance since 2000 has been depressing, but not depressing to that extraordinary a degree:

Gary Burtless: This Pessimistic Conclusion Does Not Correspond with Other Indicators:

This pessimistic conclusion… does not correspond with other indicators…. Personal income statistics published by the Commerce Department… show healthier income gains in the 21st century compared with the… CPS survey…. GDP estimates [say] real U.S. money income per person increased almost 11 percent in the first six years of the current economic recovery…. The Census CPS… suggests that the income gain was less than one-third as large (3.3 percent versus 10.9 percent)…. The Census household survey suggests that virtually all the income improvement in the recovery occurred in 2015, the Commerce Department’s personal income statistics show sizeable income gains in four of the last five years. This gap between… the CPS survey and… the national accounts has persisted for more than a decade….

The Commerce Department’s income estimates in the national accounts are derived from income tax returns, earnings records maintained by the unemployment insurance system, and administrative records provided by government transfer agencies… are almost certainly more accurate in the aggregate than estimates based on household survey responses. Of course, the national accounts data by themselves provide us with no evidence about the prevalence of poverty, the distribution of income, or the trend in median income.  Only household survey data offer a guide to how income is distributed…. But if the household survey is giving us an inaccurate picture of the trend in average income, it is inevitably giving a distorted picture of the trend in income at many points in the income distribution…. The [CPS] survey findings are worth reporting on the front pages of the nation’s newspapers, [so] the data they rely on are worth checking against competing, and perhaps more reliable, sources of information.