Did most Americans lose wealth, income under Barack Obama?

In his new book, longtime Democratic pollster Stanley B. Greenberg argues that the 2016 election sowed the seeds for the demise of the Republican Party. But along the way, he also offers some tough love for Democrats.

In Greenberg’s book, "RIP GOP: How the New America Is Dooming the Republicans," he wrote a chapter titled "How did Democrats let Trump win?" In it, he argues that Obama-era Democratic messaging on the economy wasn’t breaking through to Americans who continued to feel worried about the economy.

"What was the reality for most Americans during the Obama presidency? Most lost wealth and their incomes fell, particularly for those at the bottom of the ladder," Greenberg wrote.

Is that correct? Mostly, though it depends a bit on when you start counting.

To measure the ups and downs of wealth during Obama’s presidency we first turned to the Federal Reserve’s Survey of Consumer Finances. 

We started by looking at the trends in wealth holdings among several portions of the income spectrum in 2007, 2010, 2013 and 2019. (The survey data is collected every three years.)

As the chart below shows, the only increase in wealth during that period accrued to the top 10% of the income spectrum, which saw a 27% rise in wealth. The bottom 80% lost wealth, either a little or a lot. Losses ranged from half a percentage point to 70%

To the individuals facing such losses, the starting point may not matter much, but since Greenberg singled out Obama’s tenure in office, economists suggested we also look at the pattern beginning in 2010, to deemphasize the impact of the Great Recession, which Obama inherited.

If you use 2010 as the baseline, the picture looks significantly more favorable to Obama. From 2010 to 2016, only the lowest 20 percent of the income range saw their wealth decline. For every other percentile, wealth rose, with the increases ranging from 12% to 24%.

Meanwhile, Gary Burtless, an economist with the Brookings Institution, cautioned that these traditional measures are skewed against lower-income Americans, who may lack big bank accounts and 401(k) balances and may not be homeowners but who can expect to receive payments from Social Security and Medicare that will usually return more than they paid in.

To determine whether incomes fell during Obama’s presidency, we turned to a study we’ve cited previously by the nonpartisan Congressional Budget Office.

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This study looked at how much income people received compared with what they received in 1979.

The chart below -- which doesn’t count taxes and federal payments, such as Social Security -- shows that between 2008, the year before Obama took office, and 2015, the final year of the study, inflation-adjusted income was essentially flat for the bottom 80% of earners. Income rose only for the top one-fifth of earners.

However, if you use data that takes transfers (such as government benefits) and taxes into account -- things that Obama would have had some influence on -- the picture is somewhat more favorable. The bottom 20% saw their income rise by 29% above inflation during the Obama years, and for those between the 21st to 80th percentile, it rose by 13%.

Greenberg said, "What was the reality for most Americans during the Obama presidency? Most lost wealth and their incomes fell, particularly for those at the bottom of the ladder."

Over the course of Obama’s presidency, wealth and income did either stagnate or decline. However, this full tenure included a precipitous drop from the Great Recession that Obama inherited, so the numbers look better if you start counting from the depths of the recession instead. The Obama team can claim they accomplished positive growth on the economy, while Greenberg is right that many everyday Americans still suffered losses. 

We rate the statement Mostly True.