Our ears perked up at this claim. Just the previous day, The Fact Checker (and PolitiFact and factcheck.org) pointed out the shortfalls of a similar, Three-Pinocchio statement by Democratic presidential candidate Martin O’Malley.
Where did the GOP presidential hopeful’s figures come from, and who are the large swaths of Americans this time?
Rubio’s spokesman cited our colleague Jim Tankersley’s Wonkblog article about a report on economic mobility. The report, by economist Rob Shapiro for the Brookings Institution, analyzes the Census Bureau’s aggregate median household income data.
Shapiro, former economic adviser to President Bill Clinton, examined how household incomes by age cohorts changed from 1975 through 2013. He analyzed the impact of various factors, including the gender, age, race and ethnicity of household heads, economic policies enacted under each president, globalization, technology and education achievement of household heads.
Income trends of two-thirds of American households relates to that last point: education. Shapiro studied cohorts of household heads who were 25 to 29 years old in three different years: 1982, 1991, 2001. That means from 2002 to 2013, the first group was 56 to 60 years old; the second group was 47 to 51 years old; and the third group was 37 to 41 years old.
He found that from 2002 to 2013, median household incomes for all age groups declined, on average, if the household head did not have a college degree. Median incomes of households headed by people without high school diplomas fell an average of 1.9 percent per year, and by 1 percent per year in households headed by high school graduates.
And, as of 2013, college-educated households comprised 33 percent of all households. Therefore, two-thirds of American households — led by household heads who did not have a college degree — saw income decline or stagnation on average from 2002 to 2013, according to Shapiro.
One important thing to note is the impact of the life cycle effect: people tend to make the largest income gains from mid-20s to mid-30s, continue to earn more at a slower rate until about 50 years old, then even out until retirement.
The table shows that people in the older age cohort (56 to 60 in 2013) who did not have college degrees made less money over the 11-year period. The next cohort (47 to 51 by 2013) had a similar experience, though they had less income declines than the older cohort. The youngest cohort (37 to 41 by 2013) saw far smaller income declines in households led by non-college graduates.
Moreover, more recent data from 2014 and 2015 would show a different trend, Shapiro said in an interview with The Fact Checker: “I expect it to show that incomes have certainly stabilized, and in broad numbers, they may be rising.” He plans to update the report with 2014 Census figures once they are available.
Rubio’s statement does not capture the subtleties in the findings, Shapiro said. However, “overall, the phenomenon is that for the first time, a large share of Americans have seen their incomes decline over an 11-year period that included two expansions and one deep recession.” The findings about education achievement and income show that higher education does not protect you from the overall phenomenon but limits the damage, he said.
Further, Shapiro noted: “Rubio should recognize that it’s [income decline] dominated by the failure of the [President George W.] Bush expansion to lift incomes and the catastrophe of the 2008-2009 recession, which arises out of his policies, not out of President Obama’s. Things have been better under President Obama in general than they were under Bush.”
As O’Malley did, Rubio’s claim looked at trends between 2002 to 2013, through the recession and slow recovery. (O’Malley’s statement: “Today in America, 70 percent of us are earning the same or less than we were 12 years ago, and this is the first time that that has happened this side of World War II.”)
Both Rubio’s and O’Malley’s statements make it seem as though two-thirds (or 70 percent, in O’Malley’s case) of all Americans are earning less today than they did in 2001 or 2002. Both candidates’ statements use the word “today,” even though their data run through 2013.
In fact, Bureau of Labor Statistics data for non-supervisory employees (comprising the majority of employees) show average weekly earnings increased by 6.1 percent and average hourly earnings increased by 7.1 percent from April 2002 to April 2015.
Rubio’s spokesman did not respond to our question as to how the report supports the candidate’s statement, especially since the two-thirds figure is much more nuanced than Rubio characterized it.
The Pinocchio Test
The study that Rubio’s campaign cited found that between 2002 and 2013, two-thirds of American households that are led by people who did not complete college, experienced income declines on average over 11 years. Rubio’s statement does not accurately capture that finding, and it does not reflect the life cycle effect or the difference between households and individual Americans. In fact, this report may be better suited to support Rubio’s proposal to increase access to education.
While Rubio’s claim did not have the perplexing time element that O’Malley’s did (“this is the first time that that has happened this side of World War II”), his claim still is problematic. Rubio’s claim, as was O’Malley’s, is not supported by more recent data on average American earnings, which show they have increased between 2002 and 2015. Further, Rubio misused the Wonkblog article, which described where the two-thirds figure originated in Shapiro’s study. And he made the issue partisan, when the timeframe he uses spans the presidencies of Bush and Obama.
We award bipartisan Three Pinocchios; it is time Republican and Democratic candidates fine-tuned this talking point.
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