There are a lot of ways to measure economic progress. We can focus on gross domestic product, productivity, job growth, housing starts, retail sales, capital investment, or dozens of other measures. But at the end of the day, what really matters is whether the economy is improving the lives of most people.
Barack Obama took a lot of grief for the way the economy performed during his eight years. Yes, he inherited a big mess, but the recovery from the Great Recession was pathetic. At least that’s what they said: GDP was weak, productivity barely improved, wage growth was anemic, business formation was lackluster.
And one of the most damning statistics was the fact that the typical American family wasn’t making any more money (after adjusting for inflation) than their parents had 20 years earlier The economic stagnation of the middle class was a big factor in the electorate’s foul mood last year.
Now, it turns out that Obama got a little bit of a bum rap about the economy. Yes, the middle class has stagnated, but a lot of progress was made over Obama’s final four years.
According to the Census Bureau’s annual report on income, poverty and health insurance coverage released on Tuesday, the median household saw its real income rise faster over the last four years than it has at any other time since the data were first collected. Faster than Bill Clinton’s second term. Faster than Ronald Reagan’s second term. Faster than Richard Nixon’s first term.
Also read: American families finally earn more than they did in 1999
In real (inflation-adjusted) terms, median household incomes rose 10.7% from $53,331 to $59,039 between 2012 and 2016. This is a big deal. The median household got what it really needed most: higher incomes.
Although the wealthy continued to see their incomes rise faster than everyone else, every quintile saw some improvement for the first time in a very long time.
The poorest 20% of households (those who made less than $20,000) saw a 7.8% increase, the next quintile (making up to $46,000) saw an 11.2% gain, the middle quintile (making up to $75,000) got a 10.6% gain. The next group (making up to $121,000) got a 15.9% raise, while the top group made out like bandits with a 17.6% increase in income.
Obama was also hounded politically by the persistence of joblessness and poverty. But it turns out that the poverty rate fell sharply during his second term, as you might have expected it would given depth of the Great Recession. The poverty rate at the end of Obama’s presidency was lower than it was at any time during Ronald Reagan’s time in office.
Should Obama get credit for the improvement under his watch?
I’m the first to admit that no president really controls the economy. The man in the Oval Office, regardless of political party, should not get most of the blame or credit for what happens in a mixed-market economy of 320 million people.
Also read: Why presidents shouldn’t get credit or blame for the economy
But at the margins, there are policies that matter to people. Republicans tend to think that the things that matter most are tax rates and regulations. Republicans say Obama shackled the economy with high taxes and too much red tape. But we don’t see those terrible results in any of the data: The typical family is making more money, and so is the typical business.
And there’s one other place that Obama made his mark: Reforming the health insurance system in America. And here you have to give him some major credit (along with the Democrats in the House and Senate who passed the Affordable Care Act.)
According to the Census Bureau, the number of people without insurance plunged by 19.9 million during Obama’s final four years. The only other president who made as big of an impact on health care was Lyndon Johnson, who established Medicare and Medicaid (the data on health insurance coverage don’t go back to the 1960s).
A look at the data released by the Census today proves that Obama was a much better steward of the economy than he’s been given credit for — more people are making more money, fewer are in poverty, and fewer are facing illness without insurance. Let’s hope Donald Trump does even half as well.