“This was household income when President Obama took office. This was the national debt. Under Obama, families have lost over $4,000 a year in income, and the national debt is now $16 trillion and growing. Barack Obama: More spending, more debt — failing American families.”
— Narration from Mitt Romney campaign ad
Republican presidential nominee Mitt Romney has turned his attention back to spending and the economy after attacking President Obama last week on foreign policy and trade relations with China. This ad reminds voters that the national debt has grown while incomes have largely fallen, suggesting that the outlook for future generations is bleak under the current administration.
In a previous column, we examined an ad that used similar brick-layer bar graphs to make a point that the U.S. is losing ground to China on manufacturing. The illustrations in that video were badly inaccurate, exaggerating the severity of the situation.
Let’s see whether the graphs in this ad are more true to the facts.
The last available data from the U.S. Census Bureau show that median household income was $50,054 in 2011 — the 2012 numbers won’t be available until next year. That’s compared to an inflation-adjusted $52,546 in 2008, so the difference during Obama’s tenure is $2,492, which seems to disprove Romney’s claim of a $4,000 drop.
So where does the GOP candidate get his numbers?
The Romney campaign pointed us to a set of reports from the Sentier Research group, which started its own “household income index” in 2011. The organization tracks median income on a monthly rather than annual basis, drawing from the Bureau of Labor Statistics Current Population Survey to come up with its numbers.
The creators of the Sentier index, Gordon Green and John Coder, are former department heads for the Census Bureau.
Sentier’s latest report showed a U.S. median household income of $50,881 in July 2012, compared to about $55,300 when Obama entered the White House. That’s a difference of more than $4,000, which puts Romney on safe ground.
Here’s the index:
Readers will notice that the median household income declined after both of the last two recessions. So it’s not unusual for the level to remain relatively low after an economic downturn has ended.
After the 2001 recession, the median income showed a general drop until late 2005, and it never topped its pre-downturn level until 2007.
Granted, the median income during Obama’s tenure has fallen more drastically. But the president also inherited a more severe recession than the one that occurred in 2001.
Why does the median income decline after a recession is over? Coder pointed out that the falling numbers correlate with higher-than-usual unemployment and underemployment levels, which persisted after both economic downturns had ended.
Now that we know it’s nothing new for the median income to fall after a recession, let’s test Romney’s bar graphs using the Sentier data. The ad uses brick layers to represent median household income, so we’ll start by determining how much each layer represents.
The first bar graph shows 14 layers for a median income of $55,300 in January 2009. That means each layer equals $3,950.
The graph shrinks down to eight brick layers for July 2012, which means the median fell to $31,600. But the true median income at that point was $50,881, according to Sentier.
The bottom line here is that Romney’s illustration is out of proportion, and it sells U.S. workers short on their earnings.
Granted, the ad mentions a number for how much the median income has dropped under the current president: $4,000. But the bar graph exaggerates the impact of this drop, as though a true representation wouldn’t look painful enough.
In terms of national debt, the ad is correct that the level has jumped from $10.6 trillion to more than $16 trillion since Obama took office. But the bar graph once again doesn’t match with the real numbers.
If you convert the brick layers to dollars, the illustration suggests that the current debt is $21 trillion — more than double the level when Obama took office. That’s off the mark by more than 30 percent. An accurate graphic would end with 12 brick layers instead of 16.
Again, we have to give the Romney campaign some credit for stating outright the true levels of debt, but the out-of-proportion bar graph exaggerates how much change has occurred.
The Pinocchio Test
Data from the Sentier Research group supports Romney’s claim about a $4,000 drop in the median household income, but the bar graph he used to represent this decline doesn’t match the true numbers. Moreover, as noted above, a decline in household income is not that unusual after a recession.
The same goes for the reference to debt. The ad states correct numbers, but its bar graph is badly out of proportion.
Visual aids help viewers contextualize numbers, so the problem with Romney’s illustrations is that they exaggerate the changes that have taken place, giving viewers a distorted impression of what has happened during the Obama administration.
Romney earns two Pinocchios for his ad about rising debt and falling incomes.
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