As a non-economist 70 year old who started an entry level computer programmer job in 1973 making 20k per year (with great benefits and a pension plan to boot) I think people are rightfully angry even though economists say the economy is good. If salaries had kept pace with my entry level salary in 1973, an entry level software engineer today would on average have a salary of 141k with equivalent benefits. Instead the average entry level salary is only about 85k at most in the same upstate NY area, which is about the same nationally. That gap of 56k annually (and likely fewer benefits and no pension) is why workers are angry (in my humble opinion), even ones with above-median wage earning power. Even worse, educated workers today are seriously burdened with student debt in amounts that my generation cannot fathom (and, yes I took out student loans for my undergrad, and later a graduate degree, which was mildly burdensome but paid off when I turned 50). I remember thinking, as a working class person, first in my family to graduate from college, that the future looked rosy as compared to my parents. My mom was an actual stay at home mom, and my dad worked for the postal service making less than I made in 1973 at my first job. So yes, workers are angry. Wage labor is getting a smaller and smaller share of the economic pie, even educated workers like myself. More tax cuts for the wealthy if tRump is elected will only exacerbate economic inequality. Workers will be even more angry. Especially if economists keep telling us the economy is good.
I understand if people are angry about the inequalities in the US. The playing field is not even, it never has been. However, 2021 was not an explosion of inequality. Why are people so much angrier now at the economy, especially when the vast majority say that they are doing at least ok How do you explain that? I am honestly asking.
On the subject of inequality: the lowest wage workers were the ones who had the biggest win of this recovery. Their wages rose faster than anyone's and faster than prices. Wage inequality, after inflation, narrowed during this recovery. See Arin Dube and co-authors. Their wages are still too low, but we showed that low-wage workers are worth the higher pay. We are learning how really paid the cheap prices that we enjoyed for years.
It is more than workers.. The growth in median family wealth from 2019 to 2022 after inflation was historic across basically all income, wealth, and demographic groups. Wealth inequality is huge in the US but people have more set aside than before the pandemic. That's good.
Another factor might be the rise of credit card debt. Concerns about debt repayment and lack of savings can contribute to negative sentiments. Adding to that,people often compare their current financial situation not just to their past but to their expectations and aspirations. If expectations for economic improvement are high, even moderate gains may feel insufficient.
Yes, Fed policy is the other factor that's at play. There are not enough left-wing politicians challenging the Feds policy targeting the increase of unemployment and wages.
Maybe if we were to try find an alternative explanation hypothesis here, what would both of you (Bert and Claudia) say about the idea that a once-in-a-century pandemic was something that crowded out people's thinking about economic (particularly with regard to their well-being; even discounting the stimuli checks here) or other social issues. This would, most importantly, be the case in 2021 and 2022. Once the pandemic ended, there's less of that for people to think and worry about.
Just a genuinely curious take on the issue. Havent seen much research done on this topic and don't have any opinions on either possible answer to this question.
We had a different President in 2020! At that time Fox and D. Trump were painting its' viewers a completely different picture. Fox News is the elephant in the room that corporate media largely ignores. This is not complicated stuff!
You are right! It's primarily due to Fox News! The supposed left wing news outlets like MSNBC and the Democratic politicians' inability to communicate a coherent message about the economy doesn't help.
Well, at least the playing field was a little less uneven in 1973 when I started my first job. It has tilted dangerously uneven now. Maybe it has reached the breaking point. Now, more than ever, the majority of people realize they are never going to be able to buy a house or get ahead. Whether or not voters understand how it got so bad is a different question. Both political sides are guilty of giving in to greed, one of the primary drivers.
I wonder if labor price *volatility* can lead to anger. If I'm making $45/hour and I perceive that I could make roughly the same anywhere else, then I'm getting a "fair wage" by the market measure. But if I could suddenly make $60/hour somewhere else and my employer doesn't give me a raise, I'm angry that my employer doesn't value me "fairly." Even though all that happened is that a strong economy created higher-paying jobs!
The best hypothesis that ties to economics is similar to yours. The pandemic increased uncertainty and so even if people look better on paper they are worried they will lose it. Volatility or uncertainty can be damaging.
I think you are looking in the wrong place for answers. Most people don't care what the definition of inflation is, and as far as that goes, the Austrian school would say it is entirely the increase in the money supply, not the general level of prices. so, smart people can differ on that. However, people respond viscerally to their own lived experiences, and given that the inflation price index is higher by ~20% since prior to the pandemic, and all adults remember what prices were like just a few years ago, they continue to consider them very high. I just saw on Twitter that Taco Bell and Chick Fil-A prices have risen more than 65% since that time. so, the fact that the statistics that are calculated by the BLS indicate that the rate of change of price rises has slowed from its worst levels in 2021-2022 hardly means that inflation has been solved, at least to most people's minds.
Add to that the ongoing diatribe by the mainstream media regarding the absolute terror if Donald Trump is re-elected president and how the world is going to end despite the facts that during his presidency from 2016-2020, growth was faster, inflation was lower and there were no wars in which the US was involved, has many people panicking that the world is going to end, as they've been instructed. Of course, this could be seen as a cynical ploy by the current administration and its allies in the media to try to ensure that Biden wins reelection, but regardless, if you continue to tell people that the prospect of an election will result in the end of the world, after a while, people assume the world is ending.
I get that you are one of those desperate to prevent Trump from being reelected and so will write whatever you can to try to sway people's views in your favor, but your voice is limited compared to the fear-mongering that occurs nonstop on CNN, MSNCB, NYT and WaPo as well as the broadcast networks. If they continue to fear monger, it seems highly unlikely that the general population will start to believe that things are better absent an extraordinary series of events.
There is no economic explanation for 70% of people saying their finances are good or comfortable then only 20% of the same (!!) people saying the US economy is good. People's "lived experiences" should be there when we ask them how they are doing. How is it not there but in their grim assessment of "the" economy. Please, explain that.
As an economist, I do not care who you or anyone else votes for. Voting is a freedom that the brave men and women in the military have helped protect. Happy Memorial Day.
Perhaps because to most people, how well “the economy” is doing is represented by how well the white-collar professional/managerial class is doing. This is the class of people that media attention and culture focuses on, even though blue collar and service workers are the majority of the workforce. The white-collar workers have seen their inflation-adjusted incomes decrease and their assets take a major bath over the past few years, that is just beginning to crawl out of the 2022-23 dip on a real basis.
again, you are working to compare data with feelings. if there is a constant drumbeat of negativity, and I think you must agree that exists, then people will not believe things are going well, even if they are ok. I think that is human nature.
I have no problems with feelings, but that's separate what's happening in people's lives. Be angry at the price tag on the apple, fine. What I want to know is whether you able to pay for it and eat it. It's clear from the information on spending most families can. That's what I care about as an economist.
PS I am not telling people to buck up. I am saying that it's not about the economy.
"Most families can" however elides a much more complicated reality where low income earners increasingly leverage savings, credit (note the growth of buy now pay later platforms) and debt (credit cards) to pay for necessities like groceries.
A possible explanation is that asset price appreciation (home with affordable mortgage, retirement savings) accounts for comfortable finances, while enough people within the respondents network (maybe including themselves) feel uncertain about their wage income or career progression. Asset price appreciation rates tend to be assumed to continue at the same pace, even though much has been pulled forward thanks to monetary policy. The same question might get very different answers after a drawdown in asset prices.
I was having this exact discussion during a Memorial Day family cookout when a friend claimed inflation was high and we were in a recession. When I explained year-over-year rate was at 3% and unemployment was at record lows he walked away. It is all vibes and anecdotal evidence. For context, he is a realtor in VA and saw better days when rates were lower and before the National Realtors Association lost its lawsuit in 2023.
A good post and the divergence is indeed a riddle. It could be wish fulfillment. ideally, most people want to believe that they are doing better than others. So the say their finances are good in the midst of a perceived bad economy. That's the same phenomenon as when a significant majority of people report they are above average as drivers.
The analogy I would draw is with high crime rates.
There have been modest declines year on year from 2021 to 2022 and (probably) 2022 to 2023. But those declines have been swamped in the public's perception by the absolutely massive increase from the pre- to post-pandemic periods. The pandemic serves as a historical line of demarcation between the old pre-pandemic America and a post-pandemic new normal, a transition accomplished in a very short period of time. Some moderation in inflation is meaningless from the perspective compared to the reality of elevated prices, just as some declines in crime are meaningless in the face of continuing elevated rates of crime compared to 2019.
I suspect that there is a lot of pent up anxiety in the public wrt to high interest rates from the FOMC. Waiting for the sword of Damocles to drop in the form of a recession is not a comfortable experience and, as the precipitous decline in consumer confidence from last month indicates, any little thing can kick off an avalanche of fear and uncertainty.
A generation ago, Bill Clinton said “I feel your pain.” The current administration’s message is “you never had it so good.” Let’s see how that works out for Joe Biden. I mean, I’d have thought it impossible to lose to Trump or for RFK to poll in the double digits. But here we are.
Also, isn’t it at least possible that the inflation statistics have been distorted beyond recognition? Hedonic adjustments. The laughable and sudden 20% decline in health insurance costs.
On the other hand, in the post-land-line age, who the hell answers surveys? I can’t fathom that any poll taker can get a representative sample. How much can we rely on such data?
As an economist, I do not care who wins the election or the best political messaging. That's not my lane. No, inflation statistics have not been distorted. Career, high-trained staff at the statistical agencies do the estimation. They would quit in protest if asked to 'cook the books.' Official statistical agencies in the US have the best methods and highest response rates of any surveys. Response rates have fallen over several years but they are still good. That said, not all surveys are as high quality as official surveys and many have very low response rates.
This is baffling and I think there just needs to be better messaging from the Biden administration on the economy. As mentioned, wages for the lowest income earners are up. Real wages are up, over three years of job growth, unemployment continues to be below 4%. Even wilder is people thinking the markets are falling even though the NASDAQ, S&P, and Dow Jones have all touched record highs.
Why some think the economy was better off 4 years ago is also nonsensical primarily because this country was in a pandemic while the economy was shutdown. And yes, I did see recently that consumer sentiment dropped which we all know isn't a great sign. The media to me isn't helping matters with the constant harping about inflation plus the deficit and not about the good that has happened during Biden's time in office. Also, there's way too many bad actors that are spreading misinformation about the economy as well. We have to do better.
At the end of the day I get the feelings aspect of it but it also can't lead to people being totally misinformed about the economy. Again, better messaging needs to come from the administration plus the comparisons to the late 70's and early 80's need to stop as well. The economy today is nothing like it was 45 years ago. Times are different. Nothing is perfect but the economy statistically today people are better off then they were in 2020. We have to do better,
I suspect that low income earners spend a disproportionate amount of their income on food, gasoline and rent, sectors that have seen especially dramatic increases in price due to inflation. Any wage increases in that cohort have probably been significantly nullified because inflation for items like used cars has been especially ferocious.
One issue I haven't seen covered yet: with the increase in remote work, companies have figured out they can hire in developing countries & pay a FRACTION of an American salary. I'm talking management jobs, not entry-level.
So, now when you go for a job, you're competing with people all over the entire world.
This is a historic shift; there's nothing that can be done about it. Going forward, what's left of the American Dream will be, to a substantial degree, serving to elevate individuals in developing countries, while many Americans see their salaries decrease to what they were 10-30 years ago.
Americans' salaries will then be increasingly eaten up by a higher cost of living than exists in those developing countries; a double-edged sword.
'We have the worst inflation ever' 'Migrants are taking over our Jobs' 'We are in worst economy & recession' 'American cities gripped by worst violent crime wave' 'Election were stolen'
How these opinions established into American psyche? To know this, you have to understand the power of big lies, the power of affirmation, repetition and contagion.
Crowd - Study of popular mind (by Gustave le Bon) explains this phenomenon. And once the big lies get established in psyche of people, they can't be cured by any rational persuasion and logical reasoning. For example, no amount of reasoned argument can change thinking of a conservative who believes that migrants have taken over American jobs. Rational argument at this point is a futile exercise. Many people will also claim that official data is manipulated to fool the country.
I dont care what you say or what word salad you create. Steak are 55% more, hambuger meat, 63%, eggs 110%, chicken 88%. I have 5 boys at home, 2 just lost thier jobs & now I also feed an additional 6 people. Im DROWNING! They already drowned . No matter what you say, this is the WORST economy since the 80's. We are all struggeling. People ARE starving, homeless are everywhere! Facts are FACTS
Your experiences are real, and they certainly sound very challenging at home. In my piece, I share what people who are representative of all Americans tell us about their experiences. 72% tell us that they are doing at least okay financially. It sounds like that would not be your answer. But if 72% tell us they personally are doing ok financially, it's hard to explain when you average across those same people only 25% say the economy is at least good. Also, I share data on the prices of all things we buy with weights on what people tell us they buy. Cherry-picking out prices is not helpful and, again, not representative of all the things we buy.
Why people might think things aren't going well: 12% increase in homelessness, one in three consumers have maxed out their credit cards, credit card and auto loan delinquencies rising, three-fold increase in suicides of despair among black men, fentanyl deaths nearly quadrupled, full-time positions are disappearing & most new jobs are part-time, 42% of small businesses were unable to pay their rent in full in April, car & property insurance up 25-100%, thousands of tech and media layoffs, young families priced out of home ownership, renters now need to make close to $80,000 to afford typical rent-36% higher than in 2019, inflation up three months in a row in 2024, overall prices up 22% & groceries up 30%, GDP fell to 1.6% in the first quarter, federal debt increasing by $1 trillion every 100 days, spot price of gold per ounce at an all-time high, Federal Reserve beginning to have a hard time selling new debt, violent crime is up, workforce participation is near an all-time low, the unemployment rate hit a two-year high in February & is rising, unemployment is rising in 30 states, age of cars on the road is at an all-time high, median household income adjusted for inflation fell 2.3%. Everyone knows at least several people who are really struggling, and for the first time in their lives.
And all the smart people from Warren Buffet to Jamie Dimon to Lawrence Summers to the IMF are predicting that things are gonna go south for the U.S. in 12-24 months.
"Consumers became less positive about the current labor market situation, and more concerned about future business conditions, job availability, and income...In addition to the confidence index, consumers' expectations for the next six months also fell to their lowest level since July 2022."
The average guy decries "inflation". What she means is high prices. Generally incomes across most cohorts are up more than inflation since the start of covid 19. But the public is grumpy about covid. And younger voters without real estate assets are struggling due to high mortgage rates and high starter house prices if they want to enter the real estate market. Discontent is widespread in the developed world, not just in the USA.
As a non-economist 70 year old who started an entry level computer programmer job in 1973 making 20k per year (with great benefits and a pension plan to boot) I think people are rightfully angry even though economists say the economy is good. If salaries had kept pace with my entry level salary in 1973, an entry level software engineer today would on average have a salary of 141k with equivalent benefits. Instead the average entry level salary is only about 85k at most in the same upstate NY area, which is about the same nationally. That gap of 56k annually (and likely fewer benefits and no pension) is why workers are angry (in my humble opinion), even ones with above-median wage earning power. Even worse, educated workers today are seriously burdened with student debt in amounts that my generation cannot fathom (and, yes I took out student loans for my undergrad, and later a graduate degree, which was mildly burdensome but paid off when I turned 50). I remember thinking, as a working class person, first in my family to graduate from college, that the future looked rosy as compared to my parents. My mom was an actual stay at home mom, and my dad worked for the postal service making less than I made in 1973 at my first job. So yes, workers are angry. Wage labor is getting a smaller and smaller share of the economic pie, even educated workers like myself. More tax cuts for the wealthy if tRump is elected will only exacerbate economic inequality. Workers will be even more angry. Especially if economists keep telling us the economy is good.
I understand if people are angry about the inequalities in the US. The playing field is not even, it never has been. However, 2021 was not an explosion of inequality. Why are people so much angrier now at the economy, especially when the vast majority say that they are doing at least ok How do you explain that? I am honestly asking.
On the subject of inequality: the lowest wage workers were the ones who had the biggest win of this recovery. Their wages rose faster than anyone's and faster than prices. Wage inequality, after inflation, narrowed during this recovery. See Arin Dube and co-authors. Their wages are still too low, but we showed that low-wage workers are worth the higher pay. We are learning how really paid the cheap prices that we enjoyed for years.
It is more than workers.. The growth in median family wealth from 2019 to 2022 after inflation was historic across basically all income, wealth, and demographic groups. Wealth inequality is huge in the US but people have more set aside than before the pandemic. That's good.
Why are people so much angrier now at the economy, especially when the vast majority say that they are doing at least ok How do you explain that?
That’s because Fox News tells them every day that the economy is doing bad. Every day. Again and again.
Democrats who excess gloom, too. And partisan differences in sentiment were there well before 2020. (Though I agree politics is in here.)
Another factor might be the rise of credit card debt. Concerns about debt repayment and lack of savings can contribute to negative sentiments. Adding to that,people often compare their current financial situation not just to their past but to their expectations and aspirations. If expectations for economic improvement are high, even moderate gains may feel insufficient.
Yes, Fed policy is the other factor that's at play. There are not enough left-wing politicians challenging the Feds policy targeting the increase of unemployment and wages.
Maybe if we were to try find an alternative explanation hypothesis here, what would both of you (Bert and Claudia) say about the idea that a once-in-a-century pandemic was something that crowded out people's thinking about economic (particularly with regard to their well-being; even discounting the stimuli checks here) or other social issues. This would, most importantly, be the case in 2021 and 2022. Once the pandemic ended, there's less of that for people to think and worry about.
Just a genuinely curious take on the issue. Havent seen much research done on this topic and don't have any opinions on either possible answer to this question.
We had a different President in 2020! At that time Fox and D. Trump were painting its' viewers a completely different picture. Fox News is the elephant in the room that corporate media largely ignores. This is not complicated stuff!
You are right! It's primarily due to Fox News! The supposed left wing news outlets like MSNBC and the Democratic politicians' inability to communicate a coherent message about the economy doesn't help.
Well, at least the playing field was a little less uneven in 1973 when I started my first job. It has tilted dangerously uneven now. Maybe it has reached the breaking point. Now, more than ever, the majority of people realize they are never going to be able to buy a house or get ahead. Whether or not voters understand how it got so bad is a different question. Both political sides are guilty of giving in to greed, one of the primary drivers.
I wonder if labor price *volatility* can lead to anger. If I'm making $45/hour and I perceive that I could make roughly the same anywhere else, then I'm getting a "fair wage" by the market measure. But if I could suddenly make $60/hour somewhere else and my employer doesn't give me a raise, I'm angry that my employer doesn't value me "fairly." Even though all that happened is that a strong economy created higher-paying jobs!
The best hypothesis that ties to economics is similar to yours. The pandemic increased uncertainty and so even if people look better on paper they are worried they will lose it. Volatility or uncertainty can be damaging.
$20,000 a year in 1973 was double the average starting salary for a college graduate. That would equate to $70,000 today. https://www.naceweb.org/job-market/compensation/68b20315-0119-4c64-9718-ddbd1d3c6985
If OP was making $20k back then, good for him, but if he was it was due to the scarcity of programmers, which isn't the case now.
I think you are looking in the wrong place for answers. Most people don't care what the definition of inflation is, and as far as that goes, the Austrian school would say it is entirely the increase in the money supply, not the general level of prices. so, smart people can differ on that. However, people respond viscerally to their own lived experiences, and given that the inflation price index is higher by ~20% since prior to the pandemic, and all adults remember what prices were like just a few years ago, they continue to consider them very high. I just saw on Twitter that Taco Bell and Chick Fil-A prices have risen more than 65% since that time. so, the fact that the statistics that are calculated by the BLS indicate that the rate of change of price rises has slowed from its worst levels in 2021-2022 hardly means that inflation has been solved, at least to most people's minds.
Add to that the ongoing diatribe by the mainstream media regarding the absolute terror if Donald Trump is re-elected president and how the world is going to end despite the facts that during his presidency from 2016-2020, growth was faster, inflation was lower and there were no wars in which the US was involved, has many people panicking that the world is going to end, as they've been instructed. Of course, this could be seen as a cynical ploy by the current administration and its allies in the media to try to ensure that Biden wins reelection, but regardless, if you continue to tell people that the prospect of an election will result in the end of the world, after a while, people assume the world is ending.
I get that you are one of those desperate to prevent Trump from being reelected and so will write whatever you can to try to sway people's views in your favor, but your voice is limited compared to the fear-mongering that occurs nonstop on CNN, MSNCB, NYT and WaPo as well as the broadcast networks. If they continue to fear monger, it seems highly unlikely that the general population will start to believe that things are better absent an extraordinary series of events.
There is no economic explanation for 70% of people saying their finances are good or comfortable then only 20% of the same (!!) people saying the US economy is good. People's "lived experiences" should be there when we ask them how they are doing. How is it not there but in their grim assessment of "the" economy. Please, explain that.
As an economist, I do not care who you or anyone else votes for. Voting is a freedom that the brave men and women in the military have helped protect. Happy Memorial Day.
Perhaps because to most people, how well “the economy” is doing is represented by how well the white-collar professional/managerial class is doing. This is the class of people that media attention and culture focuses on, even though blue collar and service workers are the majority of the workforce. The white-collar workers have seen their inflation-adjusted incomes decrease and their assets take a major bath over the past few years, that is just beginning to crawl out of the 2022-23 dip on a real basis.
again, you are working to compare data with feelings. if there is a constant drumbeat of negativity, and I think you must agree that exists, then people will not believe things are going well, even if they are ok. I think that is human nature.
I have no problems with feelings, but that's separate what's happening in people's lives. Be angry at the price tag on the apple, fine. What I want to know is whether you able to pay for it and eat it. It's clear from the information on spending most families can. That's what I care about as an economist.
PS I am not telling people to buck up. I am saying that it's not about the economy.
"Most families can" however elides a much more complicated reality where low income earners increasingly leverage savings, credit (note the growth of buy now pay later platforms) and debt (credit cards) to pay for necessities like groceries.
A possible explanation is that asset price appreciation (home with affordable mortgage, retirement savings) accounts for comfortable finances, while enough people within the respondents network (maybe including themselves) feel uncertain about their wage income or career progression. Asset price appreciation rates tend to be assumed to continue at the same pace, even though much has been pulled forward thanks to monetary policy. The same question might get very different answers after a drawdown in asset prices.
I was having this exact discussion during a Memorial Day family cookout when a friend claimed inflation was high and we were in a recession. When I explained year-over-year rate was at 3% and unemployment was at record lows he walked away. It is all vibes and anecdotal evidence. For context, he is a realtor in VA and saw better days when rates were lower and before the National Realtors Association lost its lawsuit in 2023.
If he's a realtor it's completely understandable why he feel the economy is terrible. Real estate is in a recession due to high interest rates.
Spit take: "49% believe the S&P 500 stock market index is down for the year," ???? No words!
I think you're an impersonator? That doesn't sound like the Claudia Sahm we know from TV and the printed page
Thank you. It was not me and removed them.
A good post and the divergence is indeed a riddle. It could be wish fulfillment. ideally, most people want to believe that they are doing better than others. So the say their finances are good in the midst of a perceived bad economy. That's the same phenomenon as when a significant majority of people report they are above average as drivers.
The analogy I would draw is with high crime rates.
There have been modest declines year on year from 2021 to 2022 and (probably) 2022 to 2023. But those declines have been swamped in the public's perception by the absolutely massive increase from the pre- to post-pandemic periods. The pandemic serves as a historical line of demarcation between the old pre-pandemic America and a post-pandemic new normal, a transition accomplished in a very short period of time. Some moderation in inflation is meaningless from the perspective compared to the reality of elevated prices, just as some declines in crime are meaningless in the face of continuing elevated rates of crime compared to 2019.
I suspect that there is a lot of pent up anxiety in the public wrt to high interest rates from the FOMC. Waiting for the sword of Damocles to drop in the form of a recession is not a comfortable experience and, as the precipitous decline in consumer confidence from last month indicates, any little thing can kick off an avalanche of fear and uncertainty.
A generation ago, Bill Clinton said “I feel your pain.” The current administration’s message is “you never had it so good.” Let’s see how that works out for Joe Biden. I mean, I’d have thought it impossible to lose to Trump or for RFK to poll in the double digits. But here we are.
Also, isn’t it at least possible that the inflation statistics have been distorted beyond recognition? Hedonic adjustments. The laughable and sudden 20% decline in health insurance costs.
On the other hand, in the post-land-line age, who the hell answers surveys? I can’t fathom that any poll taker can get a representative sample. How much can we rely on such data?
As an economist, I do not care who wins the election or the best political messaging. That's not my lane. No, inflation statistics have not been distorted. Career, high-trained staff at the statistical agencies do the estimation. They would quit in protest if asked to 'cook the books.' Official statistical agencies in the US have the best methods and highest response rates of any surveys. Response rates have fallen over several years but they are still good. That said, not all surveys are as high quality as official surveys and many have very low response rates.
Happy to look at some data from you on how that’s worse since 2020.
This is baffling and I think there just needs to be better messaging from the Biden administration on the economy. As mentioned, wages for the lowest income earners are up. Real wages are up, over three years of job growth, unemployment continues to be below 4%. Even wilder is people thinking the markets are falling even though the NASDAQ, S&P, and Dow Jones have all touched record highs.
Why some think the economy was better off 4 years ago is also nonsensical primarily because this country was in a pandemic while the economy was shutdown. And yes, I did see recently that consumer sentiment dropped which we all know isn't a great sign. The media to me isn't helping matters with the constant harping about inflation plus the deficit and not about the good that has happened during Biden's time in office. Also, there's way too many bad actors that are spreading misinformation about the economy as well. We have to do better.
At the end of the day I get the feelings aspect of it but it also can't lead to people being totally misinformed about the economy. Again, better messaging needs to come from the administration plus the comparisons to the late 70's and early 80's need to stop as well. The economy today is nothing like it was 45 years ago. Times are different. Nothing is perfect but the economy statistically today people are better off then they were in 2020. We have to do better,
I suspect that low income earners spend a disproportionate amount of their income on food, gasoline and rent, sectors that have seen especially dramatic increases in price due to inflation. Any wage increases in that cohort have probably been significantly nullified because inflation for items like used cars has been especially ferocious.
One issue I haven't seen covered yet: with the increase in remote work, companies have figured out they can hire in developing countries & pay a FRACTION of an American salary. I'm talking management jobs, not entry-level.
So, now when you go for a job, you're competing with people all over the entire world.
This is a historic shift; there's nothing that can be done about it. Going forward, what's left of the American Dream will be, to a substantial degree, serving to elevate individuals in developing countries, while many Americans see their salaries decrease to what they were 10-30 years ago.
Americans' salaries will then be increasingly eaten up by a higher cost of living than exists in those developing countries; a double-edged sword.
'We have the worst inflation ever' 'Migrants are taking over our Jobs' 'We are in worst economy & recession' 'American cities gripped by worst violent crime wave' 'Election were stolen'
How these opinions established into American psyche? To know this, you have to understand the power of big lies, the power of affirmation, repetition and contagion.
Crowd - Study of popular mind (by Gustave le Bon) explains this phenomenon. And once the big lies get established in psyche of people, they can't be cured by any rational persuasion and logical reasoning. For example, no amount of reasoned argument can change thinking of a conservative who believes that migrants have taken over American jobs. Rational argument at this point is a futile exercise. Many people will also claim that official data is manipulated to fool the country.
Mild correction the price of steak is 55% more.
I dont care what you say or what word salad you create. Steak are 55% more, hambuger meat, 63%, eggs 110%, chicken 88%. I have 5 boys at home, 2 just lost thier jobs & now I also feed an additional 6 people. Im DROWNING! They already drowned . No matter what you say, this is the WORST economy since the 80's. We are all struggeling. People ARE starving, homeless are everywhere! Facts are FACTS
Your experiences are real, and they certainly sound very challenging at home. In my piece, I share what people who are representative of all Americans tell us about their experiences. 72% tell us that they are doing at least okay financially. It sounds like that would not be your answer. But if 72% tell us they personally are doing ok financially, it's hard to explain when you average across those same people only 25% say the economy is at least good. Also, I share data on the prices of all things we buy with weights on what people tell us they buy. Cherry-picking out prices is not helpful and, again, not representative of all the things we buy.
Why people might think things aren't going well: 12% increase in homelessness, one in three consumers have maxed out their credit cards, credit card and auto loan delinquencies rising, three-fold increase in suicides of despair among black men, fentanyl deaths nearly quadrupled, full-time positions are disappearing & most new jobs are part-time, 42% of small businesses were unable to pay their rent in full in April, car & property insurance up 25-100%, thousands of tech and media layoffs, young families priced out of home ownership, renters now need to make close to $80,000 to afford typical rent-36% higher than in 2019, inflation up three months in a row in 2024, overall prices up 22% & groceries up 30%, GDP fell to 1.6% in the first quarter, federal debt increasing by $1 trillion every 100 days, spot price of gold per ounce at an all-time high, Federal Reserve beginning to have a hard time selling new debt, violent crime is up, workforce participation is near an all-time low, the unemployment rate hit a two-year high in February & is rising, unemployment is rising in 30 states, age of cars on the road is at an all-time high, median household income adjusted for inflation fell 2.3%. Everyone knows at least several people who are really struggling, and for the first time in their lives.
And all the smart people from Warren Buffet to Jamie Dimon to Lawrence Summers to the IMF are predicting that things are gonna go south for the U.S. in 12-24 months.
"Consumers became less positive about the current labor market situation, and more concerned about future business conditions, job availability, and income...In addition to the confidence index, consumers' expectations for the next six months also fell to their lowest level since July 2022."
https://finance.yahoo.com/news/us-consumer-confidence-hits-lowest-level-since-july-2022-151304354.html
There are 653,104 homeless Americans in a US population of over 300 million in the US. That's 0.2% percent of Americans. That's too many, but it's a very small fraction. That's true for many of your other data points. https://usafacts.org/articles/how-many-homeless-people-are-in-the-us-what-does-the-data-miss/#:~:text=Around%20one%20in%20every%20500,a%20single%20night%20each%20winter. Nowhere in my piece did I say everyone was doing great. Note that 72% of Americans tell us they are doing okay or comfortable financially, and then only 25% said the national economy is good or excellent. That's the puzzle to explain.
The average guy decries "inflation". What she means is high prices. Generally incomes across most cohorts are up more than inflation since the start of covid 19. But the public is grumpy about covid. And younger voters without real estate assets are struggling due to high mortgage rates and high starter house prices if they want to enter the real estate market. Discontent is widespread in the developed world, not just in the USA.