Op-Ed: Census Data Counter Warren, Sanders on Income Inequality

This article originally appeared on Real Clear Politics on November 21, 2019.

Elizabeth Warren and Bernie Sanders are making income inequality a focus of their presidential campaigns, a priority that had led them to demonize wealthy Americans and to propose ever-more imaginative tax increases on those in the top income brackets. Sanders talks about the level of inequality as “grotesque and immoral,” while Warren claims the U.S. economy only works for a “thinner and thinner slice at the top.” But with workers’ wages rising under President Trump at rates not seen in a decade, is income inequality actually increasing?

A September report by the U.S. Census Bureau based on The American Community Survey (ACS) appeared to boost Sanders’ and Warren’s claims by finding that income inequality “was significantly higher” in 2018 than in 2017.

Another Census Bureau report issued two weeks earlier reached a far different conclusion, however. By two separate measures, The Current Population Survey’s Annual Social and Economic Supplement (CPS) found that inequality decreased in 2018. By one measure, it found a decrease that was “not statistically significant.” By another, more complete, measure, it found a “significant” decrease.

There are some timing differences between the surveys, and the CPS has a wider margin of error than the ACS. With conflicting results, it can be difficult to discern which survey is more reliable. Fortunately, the Census Bureau provides guidance, recommending the CPS survey “as the data source for national estimates” because it produces “more complete and thorough estimates of income and poverty.”

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