Lower- and middle-income Americans gained ground in President Donald Trump’s first-term economy, while upper-income Americans gained the most under President Barack Obama, according to a survey by the Federal Reserve banking system.
“Families near the bottom of the income and wealth distributions generally continued to experience substantial gains in median and mean net worth between 2016 and 2019,” says the report, titled, “Changes in U.S. Family Finances from 2016 to 2019: Evidence from the Survey of Consumer Finances.”
The report says:
During the three years between the beginning of the 2016 and 2019 surveys, real gross domestic product grew at an annual rate of 2.5 percent, and the civilian unemployment rate fell from 5.0 percent to 3.8 percent.
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Families at the top of the income and wealth distributions experienced very little, if any, growth in median and mean net worth between 2016 and 2019 after experiencing large gains between 2013 and 2016 [during the Obama administration].
The 2016-2019 survey does not include the economic damage caused by the coronavirus crash in early 2020.
The Federal Reserve report comes shortly after the Census Bureau report showed that wages for full-time male employees at the midpoint of the national wage scale grew by an average of 2.1 percent to $57,456 in 2019.
Median full-time female employees gained 2.5 percent, up to $47,299, says the September 15 report, titled, “Income and Poverty in the United States: 2019.”
According to the Federal Reserve report, the median income for families rose by five percent from 2016 to 2019. The median is the number at the midpoint between the top and the bottom. For example, the median income of 101 people is the dollar value earned by the 50th-ranked person in the middle.
The median people in the bottom quarter of personal wealth gained 11 percent in income, while people in the top quarter gained six percent, the reserve reported.
Young people under age 35 gained the most, while people over age 55 lost income, which does not count stocks or savings.
The report notes that college graduates did poorly from 2016 to 2019. The family median income level of high school graduates rose by six percent while the median or midpoint income of college graduates fell by two percent, according to the report.
“Families without a high school diploma saw a 9 percent increase in their median income, while families with a college degree saw a 2 percent decrease,” the report says.
The drop may reflect a growing share of Americans who hold lower-value degrees, such as art history, and a declining share of Americans with high-value degrees, such as engineering.
But salaries for U.S. graduates are being suppressed by the large-scale inflow of visa workers into Fortune 500 jobs. Roughly 1.3 million foreign graduates hold jobs needed by American graduates, often at lower wages, because the visa workers are hoping to get green cards from their employers.
The report ignores the wage-boosting impact of Trump’s lower-immigration policy, which forces employers to compete for workers by offering higher wages.
There is overwhelming evidence that migrants displace many Americans and lowers many people’s wages — even as immigration also expands the scale of the economy, raises the number of jobs, and boosts the stock market.
But Joe Biden’s 2020 plan includes several proposals to expand the inflow of foreign workers and consumers into the United States. He promises to let mayors import foreign workers for local jobs, let companies import more visa workers for college jobs, expand the inflow of chain-migration migrants, suspend immigration enforcement against illegals, dramatically increase the inflow of poor refugees, and also provide more health care and other aid to arriving migrants.
Any huge inflow of migrants will lower Americans’ wages, transfer more wages to investors, shift jobs from the interior states to the coasts, reduce investment in wealth-generating technology, and exacerbate the chaotic diversity that has damaged U.S. society and politics.