Everyone Makes More Money When a Democrat is President

Al Globus
September 2008

The last time Princeton economist Larry Bartels voted was for Reagan in 1984. When he began his research into what turned into his new book, Unequal Democracy, he had no idea what he would find. Here's the table from page 32 "comparing average annual real pre-tax (1) income growth (%) for families at various points in the income distribution" from 1948-2005:

Percentile All Presidents Democratic Presidents Republican Presidents Partisan Difference
20 1.42 2.64 0.43 2.21
40 1.54 2.46 0.80 1.67
60 1.73 2.47 1.13 1.34
80 1.84 2.38 1.39 0.99
95 2.00 2.12 1.90 0.22

To interpret this, note that the poorest people -- those in the 20th percentile of income, the first row -- experienced an average of 1.42% growth in income per year from 1948-2005. However, in years Democrats were in the White House their income increased 2.64% on average. By contrast, during years that Republicans controlled the Presidency these same people's income increased 0.43%. Thus, Democratic presidents delivered 2.21% more income growth to these people than Republican presidents did.

A couple of things jump out:

  • First, everyone made more money under Democratic presidents, although the difference was small for the wealthiest (95th percentile).
  • Under Republicans, the wealthy do a lot better (2.12% increase per year for the 95th percentile) than those with less (0.43% increase for the 20th percentile).
  • Under Democrats the middle class, working class, and poor do a little better than the rich (2.38-2.64% increase compared to 2.12% for the 95th percentile).

    Because these are percent per year, they compound. Over time Democratic presidents have narrowed the income gap whilst making everyone wealthier. Republican presidents have significantly widened the income gap and even the wealthy make less than under Democrats.

    Bartels spends many pages showing that this is not a statistical fluke or the product of other factors (2). He also explains why each party's tax and fiscal policies lead to what we observe. This is a real effect of the party in power.

    You might think about that on November 4.


    (1) The numbers are different for after-tax income, but the pattern is the same.

    (2) For a variety of reasons, Bartels found that data are insufficient to determine if the party controlling Congress makes a difference in income. To understand this in detail, read the book.