Equitable Growth organizes endorsement by 58 scholars of Measuring Real Income Growth Act
Among endorsees are former chair of the Federal Reserve, two former chairs of the Council of Economic Advisers, two Nobel laureates
FOR IMMEDIATE RELEASE
December 18, 2019
Erica Handloff, 202-746-5747
Washington — Today, the Washington Center for Equitable Growth announced 58 economists and other social scientists—including two Nobel laureates, two former chairs of the Council of Economic Advisers, and one former chair of the Board of Governors of the Federal Reserve—have endorsed the Measuring Real Income Growth Act of 2019, which was reintroduced in the U.S. Senate today by Sen. Chuck Schumer (D-NY) and Sen. Martin Heinrich (D-NM). The bill was previously introduced in the House of Representatives by Representative Carolyn Maloney (D-NY). Earlier this month, the bill was endorsed by 11 leading economic policy organizations, including Equitable Growth.
In the letter, the scholars say:
Over the past four decades the experiences of rich and poor Americans have been very different, with the latter falling far behind, and average growth, though widely reported and discussed, becoming much less useful as a guide to how the economy is performing for median families. Indeed, such aggregate measures could have a pernicious effect—increases in Gross Domestic Product could lull us into a complacency that all is going well with the economy, when in fact most citizens are seeing their incomes decline.
The Measuring Real Income Growth Act would add a distributional component to the National Income and Product Accounts, breaking out income growth by decile to allow policymakers and the American people to see how that growth is distributed.
Having this data will have be useful for multiple reasons, say the scholars, including:
- Possibly revealing unequal patterns of growth indicative of falling intergenerational mobility
- Learning more about the accumulation of debt in the economy, when combined with distributed consumption data
- Increasing information on how relief should be targeted In the wake of a recession
Below is a statement from Heather Boushey, President and CEO of the Washington Center for Equitable Growth, applauding the reintroduction of the legislation:
Passing the Measuring Real Income Growth Act is key to understanding how the U.S. economy is—or is not—working for most families. Currently, we measure only whether the economy is growing, but we don’t measure who is actually benefiting from growth. Understanding how the economy is performing for families up and down the income ladder is increasingly important because economic inequality in the United States has now reached levels not seen since the 1920s. The evidence shows that inequality obstructs, subverts, and distorts the way our economy functions. By passing this legislation, we will have a more complete understanding of who is prospering when the economy grows, which is essential to delivering growth that is strong, stable, and broadly shared.
The Washington Center for Equitable Growth is a nonprofit research and grantmaking organization dedicated to advancing evidence-backed ideas and policies that promote strong, stable, and broad-based economic growth. For more information, see www.equitablegrowth.org and follow us on Twitter and Facebook @equitablegrowth.