Important new working paper at @equitablegrowth. It finds that when newspapers cover the economy, coverage follows the fortunes of the rich: rising incomes for the rich = positive news and vice versa THREAD equitablegrowth.org/working-papers…
...but it's only true for the richest 10%! Incomes of *everyone else in the economy* do not influence the tone of economic news. More precisely, tone is correlated with lower- and middle-class income change, but only because they are sometimes correlated with high-income change
Conditional on high-income growth, income in any other segment of the population has no impact on the tone of economic news. The researchers, @HicksTM @alan_jacobs1 @erickmerkley @jsmatthews99, evaluated the tone of >2 million articles about the economy
Why is that? The authors argue that it is *not* because reporters or editors only care about the rich. Rather, it's that reporters mostly care about aggregate economic indicators. As you might expect, a significant culprit is the stock market. Half of Americans own no stock
But a rising stock market is reported as good news. A second culprit is GDP growth. As I have frequently written at @equitablegrowth, GDP growth is not a good indicator of prosperity for most Americans; it tends to reflect the fortunes of those at the top, as this graphic shows 
That also means that this is a relatively new problem. In the 60s and 70s, aggregate income growth tended to be more reflective of Americans of every income. Median and mean growth were relatively similar, as @gabriel_zucman and Emmanuel Saez show
But now top income growth is so high it is distorting the mean, and very few people in the economy actually see income growth equal to the average.
I've written more about the paper here equitablegrowth.org/gross-domestic…
This relationship between media reporting on the economy and incomes could have pretty profound consequences. People seem to care about the overall state of the economy when they vote for example (not just their own income)
BUT we may be close to fixing this problem. @BEA_News released new data this very morning that breaks down personal income growth by income quintile for 2007-2016 apps.bea.gov/data/special-t…
I've written extensively about why we need this data. We call it GDP 2.0 equitablegrowth.org/gdp-2-0-measur… #GDPv2
This figure from the BEA report shows how total growth has been distributed between income quintiles. The blue areas are growth captured by the top quintile of earners.
This is the first time we've had an official report on how growth is distributed amongst people in the economy. And @BEA_News is planning to make this a regular annual release. It might take some time to get people to pay attention to this new measure, but they should!
GDP has its place, but in an era of rising inequality, it simply isn't the appropriate metric to gauge the success of our economy for real people. With this new measure, I hope reporting on the economy will start to better reflect how those outside the top 10% are faring END
