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Schumer introduces bill requiring GDP measure inequality

Schumer introduces bill requiring GDP measure inequality
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Senate Minority Leader Charles SchumerChuck SchumerA Biden stumble on China? First Black secretary of Senate sworn in Republican Ohio Senate candidate calls on GOP rep to resign over impeachment vote MORE (D-N.Y.) on Wednesday introduced legislation that would require gross domestic product (GDP) data to include measures of inequality.

“Too often, when we hear that GDP is rising and the economy is booming, we assume that all Americans are reaping the benefits equally — but the reality is that wages for middle-class workers remain relatively flat, the income inequality gap continues to widen, and those at the top are reaping vast economic rewards,” Schumer said.

“This new data will provide us with a new tool to help take a deeper look at economic progress at all levels of the income spectrum and present a clearer, more accurate picture of who the economy is really working for, and who’s getting left behind,” he added.

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The bill, called the Measuring Real Income Growth Act, would require the Bureau of Economic Analysis at the Commerce Department to break down its quarterly GDP statistics by income distribution. Rather than one figure painting a picture of the overall economy, the proposed breakdown would help illustrate whether growth was concentrated among the wealthy or if it was benefiting middle- and low-income Americans as well.

“Only looking at headline GDP growth numbers to assess the state of our economy simply does not paint the whole picture, and leaves out the reality that many Americans have not seen their wages rise for years,” said Sen. Martin HeinrichMartin Trevor HeinrichDemocrats offer bill on Puerto Rico statehood USPS adding up to 165K fuel efficient or electric delivery vehicles Democrats propose executive actions on electric vehicle acquisitions MORE (D-N.M.), a member of the Joint Economic Committee and a co-sponsor of Schumer’s bill.

Almost 60 economists, including Nobel laureates Robert Solow and Joseph Stiglitz and former Federal Reserve chair Janet YellenJanet Louise YellenOn The Money: Senators push for changes as chamber nears vote on .9T relief bill | Warren offers bill to create wealth tax OVERNIGHT ENERGY: Texas sues power provider Griddy, alleging deceptive advertising and marketing | More states follow California's lead on vehicle emissions standards | Financial regulators home in on climate risks Warren bill would impose wealth tax on M households MORE, have voiced support for the legislation.

The current measure of GDP, they wrote, became a proxy for prosperity because it’s so readily available and easy to compare between countries. But over time, they argued, it has become less representative of the population’s well-being.

“As income inequality has widened, GDP is increasingly ill-suited for this purpose,” they wrote.

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The Commerce Department told the Joint Economic Committee in October that it was working on methodology for compiling growth statistics along income lines.

“We’re making real progress in getting the federal government to start providing regular measurements of income inequality,” Rep. Carolyn MaloneyCarolyn MaloneyGovernment watchdog finds federal cybersecurity has 'regressed' in recent years Lawmakers line up behind potential cyber breach notification legislation DeJoy apologizes for mail delays while defending Postal Service changes MORE (D-N.Y.), vice chairwoman of the Joint Economic Committee, said at the time.

Income inequality has become a central theme among Democratic presidential candidates.

Heather Boushey, president and CEO of the Washington Center for Equitable Growth, which advocated for the new GDP measurements, said income inequality could hold back 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,” she said. “The evidence shows that inequality obstructs, subverts, and distorts the way our economy functions.”