Christian Student Loans

Nelson shakes up the comparison between student loan debt and real wages

It’s not yet 2022, but U.S. Senate candidates from Wisconsin are already making their priorities known.

Outagamie County Director Tom Nelson, a Democrat, has repeatedly expressed support for raising taxes for the wealthiest Americans, posing as a stark contrast to Republican U.S. Senator Ron Johnson – who has yet to announce whether he will run for a third term.

In a tweet on April 11, 2021, Nelson used the issue of student debt to advance his point.

“Since 2010, student debt has increased by 102% and real salaries have * fallen * by more than 8%” he tweeted.

Is Nelson on something here?

Not exactly.

Salaries vs. student debt

When asked for evidence to support Nelson’s claim, his campaign acknowledged that it couldn’t find data matching the specific numbers he cited and deleted the tweet. But they argued that the bigger point still stands – that student loan debt exceeds wages.

So we decided to take a look at the numbers.

First, a programming note: there are several metrics to analyze economic trends over time. Nelson cited real wages – or wages adjusted for inflation – so that will be our focus here.

According to data from the United States Bureau of Labor Statistics, the average annual weekly salary of all employees was $ 353.53 in 2010 and increased by 10.8% to reach $ 391.90 in 2020. ( Note: These figures are all in 1982-84 dollars, according to the standard used by BLS.) For production employees and non-supervisors, weekly earnings increased by approximately 11.5% during this period of 10 years.

Thus, real wages have not fallen. On the contrary, they have increased.

Meanwhile, data from the Federal Reserve in St. Louis showed total student loans owed in the fourth quarter of 2010 to be around $ 855 billion. This skyrocketed to $ 1.7 trillion at the end of 2020, which is an increase of almost 100%.

Additionally, Experian found that the average individual loan balance increased by over $ 3,000, or 9%, from 2019 to 2020 alone, and 6% from 2015 to 2019.

This means that Nelson was generally on the right track with the increase in student debt.

But he missed the comparison.

Our decision

In a tweet since deleted, Nelson said that “since 2010 student debt has increased 102% and real wages have fallen more than 8%.”

Student loan debt has grown astronomically during that time, so Nelson was on point there. But employees’ weekly earnings have not declined – they have increased by about 11% since 2010, after adjusting for inflation.

A statement is half true when it is partially correct but leaves out important details or takes things out of context.

It fits here.

Leave a Reply

Your email address will not be published.