It’s a Middle Class Boom

COMMENTARY Markets and Finance

It’s a Middle Class Boom

Oct 16th, 2019 2 min read
COMMENTARY BY
Stephen Moore

Distinguished Visiting Fellow

Stephen Moore is the Distinguished Visiting Fellow for Project for Economic Growth at The Heritage Foundation.
The tax cut added an additional $2,500 to a typical family of four’s after-tax incomes. Liderina/Getty Images

Key Takeaways

The lowest inflation and unemployment in half a century is underway.

The median — or average income family — has seen a gain of $5,003 since Mr. Trump came into office.

Everyone — especially the middle class — is sharing in the fruits of the Trump boom. 

How much of the monetary gains from the Trump economic speed-up have gone to the middle class? If you ask Democratic senators and presidential candidates Elizabeth Warren or Kamala Harris or Bernie Sanders, the answer to that question is … almost none.  

“Trump”’s economy is great for billionaires, not for working people,” Mr. Sanders likes to say. Meanwhile, House Speaker Nancy Pelosi grouses that under the Trump agenda “the rich get richer, and everyone else is stuck paying the bill.”

Uh huh. That’s been the standard liberal riff for the last couple of years as they try to explain how a president who they said would create a second Great Depression has created boom times with the lowest inflation and unemployment in half a century.  

But not a word of this is true, according to new Census Bureau data on the incomes of America’s middle class. This study by former Census Bureau researchers and now statisticians at Sentier Research has found gigantic income gains for the middle class under Mr. Trump. The median — or average income family — has seen a gain of $5,003 since Mr. Trump came into office. Median household income has now reached $65,976 – an all-time high and up more than 8 percent in 2019 dollars under the Trump presidency.

Under George W. Bush the household income gains were a little over $400 in eight years and under Barack Obama the gains were $1,043. That was in eight years for each. Under Mr. Trump, in less than three years the extra income is about three times larger.  

These gains under Mr. Trump are so large in such a short period of time, I asked the Sentier Research team to triple check the numbers. Sure enough, in each occasion the income swing was $5,000. 

This is a bonanza for the middle class and the extra income in the pockets of tens of millions of Americans is getting spent. Consumers are king today in America and fatter wallets translate into more store sales. Home Depot and Lowes recently recorded huge sales surges.  

The tax cut also added an additional $2,500 to a typical family of four’s after-tax incomes. So after taking account of taxes owed, incomes for most middle class families is up closer to $6,000 in the Trump era.  

Memo to Nancy Pelosi: That ain’t crumbs.  

Ronald Reagan used to talk about the importance of real take-home pay. He asked voters in 1980 if they felt “better off than four years ago” when Jimmy Carter was elected. Thanks to high taxes, high inflation and high unemployment in the late 1970s, the answer to that question was clearly no. Ronald Reagan won and Jimmy Carter lost. 

Mr. Trump should begin asking Americans if they are better off than four years ago. Today, the answer to that question is clearly yes. It’s the economy stupid. Everyone — especially the middle class — is sharing in the fruits of the Trump boom. 

This piece originally appeared in The Washington Times