Commerce Department to develop stats on income inequality

Oct 16, 2019
In The News

The Commerce Department is developing a methodology for compiling and publishing regular statistics on inequality and plans to publish its prototype measures in 2020.

“We’re making real progress in getting the federal government to start providing regular measurements of income inequality,” said Rep. Carolyn Maloney (D-N.Y.), who announced the move at a hearing on inequality. Commerce Secretary Wilbur Ross confirmed the moves in a letter to Maloney, who is vice chair of the Joint Economic Committee.

“Secretary Ross’s letter was the first firm commitment we’ve seen from this Administration to start publishing this kind of data,” she said.

The letter said the prototype methodology would be subject to a comment period before going into effect and would comply with 2019 spending legislation that urged the creation of such measures.

Maloney also said that she and Sen. Martin Heinrich (D-N.M.) would introduce legislation, the Measuring Real Income Growth Act, to codify the requirement.

The announcement comes as issues on income and wealth inequality are gaining increased attention. Democratic presidential candidates during a debate on Tuesday night sparred over what was behind the rising inequality, pointing variously to automation, bad trade deals, and political corruption as culprits.

At the hearing, University of California, Berkeley professor Gabriel Zucman urged the government to use the Distributional National Accounts, a nascent statistics methodology he helped develop with economists such as Thomas Piketty, Emmanuel Saez, Facundo Alvaredo and Lucas Chancel, as a basis for their new methodology.

“Our hope is that these prototype Distributional National Accounts will eventually be taken over by government, improved, and published as part of the official toolkit of government statistics,” he said.

Those statistics, he said, showed that the top 1 percent of earners were taking in 20 percent of pre-tax income, double the share they took in 1980.

Zucman has advised Sen. Elizabeth Warren (D-Mass.), a leading Democratic presidential candidate, on developing her proposal for a wealth tax.

But skeptics such as former Congressional Budget Office Director Douglas Holtz-Eakin cautioned that work remained on developing reliable statistics on inequality.

“The casual adoption of policies on the basis of inequality belies the serious disagreement in the research community over the state of understanding of the level and changes in inequality,” he said.