President-elect Joe Biden on Thursday night announced his nearly $2 trillion economic plan to deal with the economic fallout from the coronavirus pandemic. There were five factual claims he made that caught our interest.
“Just since this pandemic began, the wealth of the top 1% has grown by roughly $1.5 trillion since the end of last year — four times the amount for the entire bottom 50%.”
The source for this statistic is the Federal Reserve, which has a website showing the distribution of household wealth in the United States since 1989.
The data shows the wealth of the top 1 percent grew from $34.71 trillion in the fourth quarter of 2019 to $36.18 trillion in the third quarter of 2020 — a gain of $1.47 trillion.
The wealth of the bottom 50 percent grew from $2 trillion at the end of 2019 to $2.36 trillion in the third quarter of 2020, for a gain of $360 billion. That’s just under 25 percent of the gain of the top 1 percent. So the top 1 percent had a gain four times greater, as Biden stated.
However, as a reader noted in an email to The Fact Checker, the percentage gain is higher for the bottom 50 percent -- 18 percent. The gain in wealth for the top 1 percent was 4.2 percent. So, measured from that perspective, the bottom 50 percent experienced a gain in wealth four times greater.
“Some 400,000 small businesses have permanently closed their doors.”
The source for this statistic is a report published in September by the Hamilton Project of the Brookings Institution. The number reflects businesses that had closed as of June, based on a Census Bureau survey. So it’s a pretty old number, though the weekly reports of the Census Bureau small-business pulse survey indicate that small businesses still are closing their doors, though not at the pace in the spring when the pandemic first struck.
“1 in 7 households in America — more than 1 in 5 Black and Latino households in America — report that they do not have enough food to eat. This includes 30 million adults and as many as 12 million children.”
These are estimates made in a report by the Center for Budget and Policy Priorities, based on census data, updated as of Jan. 8. CBBP is a left-leaning group but well-regarded for its economic analysis.
“Over the last year, more than 600,000 education jobs have been lost in our cities and towns.”
This comes from the Bureau of Labor Statistics, which shows that the number of “educational services” jobs (mainly jobs in public K-12 schools) in the United States declined from about 8 million in December 2019 to just under 7.4 million in December 2020, or more than 600,000. (The precise number is 676,000 but the December 2020 figures are preliminary.)
Our colleagues at PolitiFact in November faulted Biden for using this BLS figure to say 600,000 teachers had been laid off. Not all of these people are teachers — a figure BLS does not track — and “education services” could include librarians, coaches, administrators, custodial workers and the like. A decline in jobs does not also mean all were layoffs.
So now Biden has adjusted his language to make it more accurate — perhaps in response to a fact check.
“These are key elements of the American Rescue Plan that would lift 12 million Americans out of poverty and cut child poverty in half. That’s 5 million children lifted out of poverty.”
Okay, this is a predictive statistic, always open to question. The transition team pointed us to a “preliminary analysis” done by the Center on Poverty and Social Policy at Columbia University. The analysis, issued on the day of Biden’s speech, looked at the impact of five elements of Biden’s proposal, such as extending food-stamp increases, a direct $1,400 payment and an expanded Earned Income Tax Credit (EITC). It predicted the Biden plan would take 11.66 million people out of poverty, including 5 million under age 18, using the Supplemental Poverty Measure (SPM) for the poverty rate.
(We have explained before the difference between the SPM and official poverty rate, which does not record transfer payments, such as the EITC or food stamps, as income.)
The Columbia analysis uses as its baseline a modest decline in the SPM poverty rate that can be attributed to the coronavirus-relief package signed into law by President Trump last month. Without the December package, the poverty rate would be 13.6 percent in 2021, and the new baseline would be 12.6 percent, the analysis says. From that new baseline, the Biden package supposedly would reduce the poverty rate further to 9 percent.
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