Ignoring inflation, Scott Walker says incomes rose in Wisconsin from 2010 to 2014

On the morning of Dec. 3, 2015, Gov. Scott Walker tweeted this from his official Twitter account:

"From 2010-2014, median household income has actually gone up 7.4 percent."

The word actually seemed to allude to a Milwaukee Journal Sentinel news article from the front page of that morning’s newspaper. The headline was: "Household income takes sharp downturn in most of Wisconsin."

So, which is it?

Have incomes in the Badger State gone up?

Or down?

Previous claim

In July 2015, while pursuing his presidential bid, Walker used his personal Twitter account to say that under his leadership, Wisconsin median household income was up 2.7 percent, while it was down 1.3 percent nationally under President Barack Obama.

Our rating was Mostly False.

Walker had cited U.S. Census data, usually a gold-standard source. But the data was from the census’ Current Population Survey. That set is good for the national income picture, but less accurate at the state level.

The better data is from the Census Bureau’s American Community Survey, a rolling collection of household and demographic statistics from 3.5 million addresses.

Those figures revealed a much different picture than Walker had painted: An income drop nationally, yes -- of 1.72 percent.

But also an income drop -- not an increase, as Walker stated -- in Wisconsin of 1.62 percent.

So, what about the governor’s claim this time?

The news story

The Journal Sentinel’s article reported on newly released data from the American Community Survey covering two periods: 2005 to 2009 and 2010 to 2014.

Median household income fell by a significant margin in two-thirds of Wisconsin counties during the period.

Importantly, the article reported figures that are adjusted for inflation.

By the way, think of median household income as the midpoint: Half of Wisconsin households have an income higher than the median, and half have an income that is lower.

Walker spokeswoman Laurel Patrick emailed the Journal Sentinel about the article, saying it was distorted because it did not include the 7.4 percent figure Walker cited in his tweet. The Journal Sentinel asked her for the data that produced that figure.

What the newspaper found was that Walker used American Community Survey data -- but didn’t properly adjust for inflation. That means he compared 2010 dollars to 2014 dollars, an economic no-no.

Whenever you are looking at income, "you should be looking at real income instead of nominal income, which means you adjust for changes," said Abdur Chowdhury, a professor of economics at Marquette University in Milwaukee and former chief economist of the United Nations Economic Commission in Europe.

Otherwise, he said, you’re looking at apples and oranges.

"$100 today is not the same as $100 last year," Chowdhury said. "If you adjust for price, what you get is the real change in your buying power."

For the news article and for this analysis, the Journal Sentinel used the Consumer Price Index from the federal Bureau of Labor Statistics to adjust for inflation.

Here’s what the adjusted data show:

Walker’s method:

2010 Wisconsin median household income -- unadjusted

2014 median household income adjusted for inflation (2014 dollars)

Difference

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$49,001

$52,622

7.4% increase

2010 Wisconsin median household income -- adjusted for inflation

2014 median household income adjusted for inflation (2014 dollars)

Difference

$53,198

$52,622

1.1% decrease

"What you are doing is the right approach, looking at real income instead of nominal income," Chowdhury said. "The real reason they (Walker) use nominal income is because it looks better."

Our rating

Walker said that from 2010-2014, median household income in Wisconsin "has actually gone up 7.4 percent."

In the best light, median household income in Wisconsin rose by 7.4 percent from 2010 to 2014.

But the better figures account for inflation. And by that measure, income dropped by 1.1 percent during that period.

For a statement that contains some element of truth but ignores critical facts that would give a different impression, we rate Walker’s claim Mostly False.

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