Why Have Economic Recovery When You Can Have Trumpism?

If facts about the economy mattered, Democrats would be running away with this election:

Today’s Census Bureau data on earnings, income, and poverty in 2023 confirmed many of the predictions made in our preview last week. The strong labor market and falling inflation translated into increases in real median household income and decreases in the official poverty rate.

Real (inflation-adjusted) median household income increased by 4.0% to $80,610, the first increase since the pandemic. Between 2022 and 2023, the labor market added 3.5 million jobs while real wages increased. Considering most households rely on income from work to make ends meet, it’s no surprise that median household income increased in 2023.

Today’s data highlight the extraordinary strength of the recovery from the economic crises caused by the pandemic, a recovery driven by policy choices—particularly large fiscal relief and recovery packages—that aimed to quickly heal the labor market. The rapid growth of household incomes charted in today’s data is powerful evidence that the policy approach of recent years was the right choice.

Officially, median household income for 2023 is statistically indistinguishable from the last income peak of 2019. While that is the case in the official data, it is important to note that there were significant data collection issues in the survey for 2019 as responses were collected just as the pandemic hit in early 2020. The pandemic disruptions introduced significant “nonresponse bias”—meaning it was harder to talk to households to collect the data, and the households who were harder to reach were disproportionately lower income. This nonresponse bias boosted income measures in 2019 artificially. Census Bureau researchers subsequently estimated that this bias meant that real median income was 2.8% lower in 2019 than reported in the initial release. If we applied this data correction to income levels in 2019, this would mean that real household incomes in 2023 rose above 2019 levels and are now at their highest level on record.

But look at gas prices! Oh wait, those are also low! I wonder if a racist in a rural Wisconsin diner has thoughts?

I should note that economy and culture are not disconnected, there are reasons why people in many communities might dislike the economy as it not stands, etc. A lot of that is at the core of Trump’s appeal. But any realistic discussion of the economy in 2024 must admit that it is in fact quite solid. However, that won’t get in the way of narratives.