Senate Minority Leader Charles SchumerChuck SchumerMcConnell signals Senate GOP will oppose combined debt ceiling-funding bill Centrist state lawmaker enters Ohio GOP Senate primary Biden discusses agenda with Schumer, Pelosi ahead of pivotal week 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.
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 HeinrichOvernight Equilibrium/Sustainability — Presented by Schneider Electric — Deadly Ida floodwaters grip southeast US David Sirota: Seven Democrats who voted against fracking ban trying to secure future elections Deadly extreme heat has arrived: here's how policymakers can save lives 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 YellenOvernight Energy & Environment — Presented by the League of Conservation Voters — White House plans extreme heat workplace standard McConnell signals Senate GOP will oppose combined debt ceiling-funding bill Democrats aim to suspend debt limit with bill to avoid government shutdown 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.
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 MaloneyOvernight Defense & National Security: US-Australian sub deal causes rift with France Overnight Energy & Environment — Presented by Climate Power — Emissions heading toward pre-pandemic levels Oversight Republicans seek testimony from Afghanistan watchdog 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.”