Fact Check: Blum -- Middle class income, net worth down under Obama

Published: April 4 2014 | 10:02 am - Updated: 7 April 2014 | 3:11 pm in Fact Check,

Introduction

"The middle class is under stress. They are taking on water. Their incomes have been down. It's down 8 percent since Barack Obama took office. Their net worth is down. In fact, their saving accounts are only $3,800, or a couple paychecks away from bankruptcy."

Source of claim

Rod Blum, a Dubuque Republican running for U.S. House's 1st District, during a debate on March 27.

Analysis

Blum's camp sent us sourcing material. The claim that incomes are down 8 percent comes from a publication called Investor's Business Daily.

However, that was published in September 2012.

The data in the article is from Sentier Research, a data analysis company led by former Census Bureau chiefs Gordon W. Green Jr. and John F. Coder. Sentier Research figures are based on the monthly Current Population Survey conducted by the U.S. Bureau of Labor Statistics.

Had Blum pulled more recent data, he would have found incomes have not dipped as much as he suggests. Sentier Research for February 2014 shows the median household income was $53,093, which is 5 percent lower, not 8 percent lower, than the median income of $55,911 in December 2007.

Still, the most recent annual numbers from the U.S. Census Bureau, which are from 2012, were available. They suggest median incomes are down 4.9 percent since 2008.

Blum's next claim was that middle-class net worth is down.

Several sources back up this statement, including the U.S. Census Bureau's latest figures that show from 2008 to 2011 that median net worth, which is based on assets minus debts, declined from about $80,000 in 2008 to $68,828 in 2011.

An Ohio State University economic study found that as of mid-2013, median net worth was down 14 percent compared to pre-recession 2006.

Blum's third claim deals with how much money people have in savings accounts. Blum's team pointed Fact Checker to a website called StatisticsBrain.com, which cites the Federal Reserve, Iowa Revenue Service and the U.S. Census Bureau, but not any specific study.

Fact Checker was unable to find or reproduce the $3,800 figure.

The latest personal savings rate estimate from Federal Reserve is 4.3 percent. Calculating median household income with the savings rate produces a total of $2,395 worth of savings, which is about $1,400 less than Blum's claim.

Conclusion

Making claims based on the term "middle class" is challenging to verify because there's not a precise definition of who is in the middle class. But if median can be a proxy for middle class, Blum hits pretty close to the mark on his claims.

Net worth is down. Median incomes had been down 8 percent and are still down 5 percent. If anything, Blum appears to have been conservative in his criticism of how much savings people have in their bank accounts. 

While some of Blum's specific numbers are not as updated or precise as they could be, we are deeming this claim mostly true.

Sources

8 percent decline in middle class incomes: http://news.investors.com/092512-626958-household-incomes-drop-in-august.htm

Median household incomes, Sentier Research: http://www.sentierresearch.com/reports/Sentier_Household_Income_Trends_Report_February2014_03_31_14.pdf

Median household incomes, U.S. Census Bureau: https://www.census.gov/hhes/www/income/data/historical/household/2012/H08_2012.xls

Net worth is down, U.S. Census Bureau: http://www.census.gov/people/wealth/files/Wealth%20Highlights%202011.pdf

Personal saving rates, Federal Reserve: http://research.stlouisfed.org/fred2/data/PSAVERT.txt


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