*Sigh* Yet More Cleaning Up After the Cockroaches: Archive Entry From Brad DeLong's Webjournal

Austin Clemens: Schumer and Heinrich Introduced a Bill to Create New Measures of Economic Growth: "Very excited.... @HBoushey and I have written extensively about the need to track growth not just for the economy as a whole but for Americans at every point along the income curve...

...You are probably aware that income inequality in the U.S. has increased. Starting in the 1980s, the proportion of total national income earned by the top 1% has climbed to 1920s levels. The top 1% now hold nearly a fifth of all pretax income in the nation. You might be surprised to learn that our principal statistical agencies don’t currently produce high quality estimates of inequality. Census’s Income and Poverty report, for example, uses Current Population Survey data, which does not include any income information for those at the very top. Our statistical agencies are great, but they don't have the resources to document income growth at the top.

Today’s bill charges the Bureau of Economic Analysis with producing these new statistics. The BEA is well known for producing GDP growth. Because GDP is collected by most countries, it is a ripe target for policy makers who want to make ideological cases about economic “success”. But GDP growth doesn’t tell us who is benefiting from a growing economy. Large numbers of Americans have been left out of the growth of the past few decades. As the chart shows, those in the bottom 50% have seen essentially no income growth at all over that period. If you aren’t in the top 10%, it’s likely that average economic outcomes for you and people like you are falling short of reported growth estimates.

Because growth used to be shared broadly among all Americans, the one-number approach to growth kinda worked [then]...