New Commerce Department effort will measure who prospers when the economy grows
Equitable Growth President and CEO Calls New Tool ‘Vital,’ ‘an Important First Step’
FOR IMMEDIATE RELEASE
March 6, 2020
Elena Waskey, 202-545-3357
WASHINGTON – The U.S. Department of Commerce’s Bureau of Economic Analysis, or BEA, today released the first-ever federally produced statistics measuring how total U.S. personal income is distributed across people in different income groups. Currently, Gross Domestic Product measures economic growth only in the aggregate, which can present an incomplete picture of the overall health of our economy. These new data offer a more complete picture of how Americans at all income levels are faring in today’s economy.
According to the BEA, “the current effort builds on at least a decade of BEA research by bringing in new sources of data, including demographic surveys, tax records, and administrative records, and will offer insights into how American households share in overall economic growth.” After obtaining input and refining methodology, the BEA will begin publishing these new statistics regularly.
The current prototype fulfills instructions in the Consolidated Appropriations Act of 2019, which encouraged the BEA to report income growth within deciles of income starting in 2020. Congress appropriated $1 million to implement these important new statistical measures.
In 2019, legislators in the Senate and in the House of Representatives reintroduced the Measuring Real Income Growth Act, which would add a distributional component to the National Income and Product Accounts, breaking out income growth into deciles of income and allowing U.S. policymakers and the American people to see who prospers when the U.S. economy grows. Sens. Chuck Schumer (D-NY) and Martin Heinrich (D-NM) reintroduced the legislation in the Senate, and Rep. Carolyn Maloney (D-NY) reintroduced the House’s companion bill.
Equitable Growth’s GDP 2.0 project has played a key role in advancing research on Distributional National Accounts, the dataset that will enable the Commerce Department to show how the benefits of economic growth are distributed by income. In a statement, Heather Boushey, president and CEO of the Washington Center for Equitable Growth, applauded the new data release and commented on its importance to future U.S. economic policymaking:
Today’s release by the Bureau of Economic Analysis of a new data series distributing personal income growth marks an important first step toward understanding how today’s economy is—or is not—working for families across the United States. This new tool is vital to understanding and documenting how our economy works, and we commend the BEA for their work on this important project.
Although headline growth numbers in the National Income and Product Accounts serve an important analytical purpose, they do not allow us to see how growth is distributed. This lack of information can perpetuate the misleading impression that all American families are prospering together because inequality has become a defining feature of our economy.
The metrics that the federal government collect shape the policies that get implemented, affecting family well-being. Getting the metrics right is imperative to building an economy that delivers broadly shared growth for all, including working- and middle-class people. Once the BEA formalizes these statistics and begins releasing them on a regular basis, they will be an indispensable part of our toolkit for measuring the economy.
Beginning today, we all will have a new picture of how the economy is performing, one that allows us to see how the economy’s performance translates into income for families at all income levels. This new, more detailed, and more accurate depiction of economic progress will allow us to evaluate the economy better and hold elected officials accountable to their promises.