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I keep hearing that we're in a strong economy, but the reality is that we aren't. It's a strong economy for the rich and powerful, but not really anyone else.

I keep hearing that we're in a strong economy, but the reality is that we aren't. It's a strong economy for the rich and powerful, but not really anyone else. Most American's can't afford a $1000 emergency [1]. Wages actually went down last month [2] 78% of Americans are living Paycheck to Paycheck. [3] Nearly half of all Americans are low-income or in poverty. [4] 1/5 of children in USA are living in poverty [5] I want someone to explain to me how this is a "good economy". I keep hearing it. It's total nonsense. I'm glad WaPo is bringing up that workers are still struggling despite these claims of a "strong economy". [1] https://www.huffingtonpost.com/entry/most-americans-cant-afford-to-pay-for-even-a-minor-emergency_us_5a68e67ae4b0022830090e5b https://www.huffingtonpost.com/entry/most-americans-cant-aff... [2] https://www.washingtonpost.com/news/wonk/wp/2018/06/15/for-the-biggest-group-of-american-workers-wages-arent-just-flat-theyre-falling/?utm_term=.0afbedc4d098 https://www.washingtonpost.com/news/wonk/wp/2018/06/15/for-t... [3] https://www.cnbc.com/2017/08/24/most-americans-live-paycheck-to-paycheck.html https://www.cnbc.com/2017/08/24/most-americans-live-paycheck... [4] https://kairoscenter.org/wp-content/uploads/2017/02/Poverty-Fact-sheet-Jan-2017.pdf https://kairoscenter.org/wp-content/uploads/2017/02/Poverty-... [5] http://www.nccp.org/topics/childpoverty.html http://www.nccp.org/topics/childpoverty.html

gaius 8y ago
Plot the chart of GDP vs GDP/capita. In the UK that tells you everything you need to know about the true state of the economy.
wufufufu 8y ago
4 out of 5 of your examples are about income inequality, which isn't the same as how strong the economy is IMO. Everyone could be living in a shack and the poverty line = no shack and by your definition the economy would be strong if everyone could afford a new shack if their current one collapsed.
- wiz21c 8y ago
  if you separate income inequality and economy, then you basically say that economy's goal is not to improve everybody's life. Benefits of successful economy should be shared by everyone.
  - wufufufu 8y ago
    The economy doesn't have a goal. Our economic policies have goals.
  - manfredo 8y ago
    If 9 out of 10 people's wages increase by 10% and the remaining one out of 10 sees their income go up by 1,000% did the economy get worse (assuming cost of living remains stating)? How so, given everyone's real incomes rose? This is why I'm usually skeptical of most claims that point to inequality as proof the economy is doing poorly. In absolute metrics, people's lives are usually getting better. The Economist ran an article a while ago that measured standards of living in absolute metrics (% of households without electricity or plumbing, whithout an automobile, that sort of thing). Almost across the board, everyone's situations are better. The main downturn is home ownership and apartment situations - but that's more to do with cities' housing restrictions rather than the economy.
    - lovich 8y ago
      If you live in a society where money == power, then rising inequality does make your life worse. Maybe today you get the benefits of new tech and it's and improvement, but tomorrow is a vote on if you get healthcare or not and you have less influence in society so you have less say in your destiny and things that affect you directly
nradov 8y ago
You would expect to see average wages decrease as companies hire less experienced, less productive workers who are just starting new jobs. So in a way it could be sort of a good sign since those workers wouldn't have found jobs at all when the economy was weaker, but it's hard to tell what's really going on based on that data. (I agree the economy still isn't good for many people.)
- sandworm101 8y ago
  >> You would expect to see average wages decrease as companies hire less experienced, less productive workers who are just starting new jobs. In a truly booming economy people, bodies, matter more than skills. Skills can be trained after employment. I would expect companies to be paying more regardless of background. Any lesser pay for new people would/should be balanced by greater pay to retain trained people. None of that is happening. Wages are up a tick here and there, but not substantially. It will be booming when I see wages growing as a percentage of profits, when companies start tightening profit margins to retain people.
ballenf 8y ago
Here's what I see: fewer unemployed people around me, but the employed are deep in debt and gradually slipping deeper into it. Standard of living hasn't gone down, but it's financed with debt while interest rates are creeping up.
- nine_k 8y ago
  "Financed with debt" is another way to say "Can't afford". You can finance an enterprise with debt because it may produce income, and the debt will be repaid. But financing consumption with increasing debt is... dangerous at best.
  - toomuchtodo 8y ago
    As someone else said in the thread [1], just existing in America is very expensive. It’s easy to conflate consumption vs necessary expenses needing to be financed, but you do what you have to do. It takes 20 years of nothing going wrong to escape poverty [2]. Imagine how easy it is to get back there. [1] https://news.ycombinator.com/item?id=17594826 https://news.ycombinator.com/item?id=17594826 [2] https://www.theatlantic.com/business/archive/2017/04/economic-inequality/524610/ https://www.theatlantic.com/business/archive/2017/04/economi...
    - falcolas 8y ago
      Very easy. Just get very sick and survive it. Or have a dependent do the same.
    - nine_k 8y ago
      "Consumption" is just something that does not produce an income. It's not about some excessive consumption. I mean, if you buy your 100" TV with debt, it's that not great, but if you buy your daily bread with debt, you're in a big trouble.
      - toomuchtodo 8y ago
        > but if you buy your daily bread with debt, you're in a big trouble. That's the problem. People are funding survival on credit. How do you fix that? Raise wages. How do you raise wages outside of macro supply/demand factors (interest rates, employment slack)? Politics.
CompelTechnic 8y ago
Many of the facts you stated are relatively invariant to the strength of the economy. I do not have good sources to describe how they have changed over time, but I would assume that points 1,3,4, and 5 are true nearly all the time. Additionally, for point 2, real wages going down on a timespan of 1 year is essentially noise in the face of rising real wages by various measures by FRED. https://fred.stlouisfed.org/tags/series?t=real%3Bwages https://fred.stlouisfed.org/tags/series?t=real%3Bwages
- wiz21c 8y ago
  If it's invariant then I find it even more disturbing.
  - CompelTechnic 8y ago
    A lot of these facts are designed to make scary headlines. #1 and #3 are both symptoms of a common cause- essentially zero savings rate for a wide swath of the American population. For the large fraction of people, failing to save is a behavioral phenomenon. For many people, doubling their income would still result in them living paycheck to paycheck. For #5, 17% of canadian children are living in poverty, 1 in 5 French children live in poverty, and poverty affects more than one in four children in the UK today (https://globalnews.ca/news/3739960/canadian-census-children-poverty/ https://globalnews.ca/news/3739960/canadian-census-children-...) (http://www.france24.com/en/20150609-unicef-report-france-child-poverty-economic-crisis-education http://www.france24.com/en/20150609-unicef-report-france-chi...) (http://www.cpag.org.uk/content/child-poverty-facts-and-figures http://www.cpag.org.uk/content/child-poverty-facts-and-figur...). Of course, each country sets its own poverty line to represent a socially-empathetic income level, resulting in pretty-even levels of nominal poverty across countries. It is not that surprising that expanding the scope of headline-worthy impoverishness to be "low-income or in poverty" would result in headline #4.
cabaalis 8y ago
All valid points, but I believe "strong economy" versus "personal wealth" are very different measures, and have been conflated in the past when it suited various arguments.

gaius 8y ago

Plot the chart of GDP vs GDP/capita. In the UK that tells you everything you need to know about the true state of the economy.

wufufufu 8y ago

4 out of 5 of your examples are about income inequality, which isn't the same as how strong the economy is IMO. Everyone could be living in a shack and the poverty line = no shack and by your definition the economy would be strong if everyone could afford a new shack if their current one collapsed.

wiz21c 8y ago
if you separate income inequality and economy, then you basically say that economy's goal is not to improve everybody's life. Benefits of successful economy should be shared by everyone.
- wufufufu 8y ago
  The economy doesn't have a goal. Our economic policies have goals.
- manfredo 8y ago
  If 9 out of 10 people's wages increase by 10% and the remaining one out of 10 sees their income go up by 1,000% did the economy get worse (assuming cost of living remains stating)? How so, given everyone's real incomes rose? This is why I'm usually skeptical of most claims that point to inequality as proof the economy is doing poorly. In absolute metrics, people's lives are usually getting better. The Economist ran an article a while ago that measured standards of living in absolute metrics (% of households without electricity or plumbing, whithout an automobile, that sort of thing). Almost across the board, everyone's situations are better. The main downturn is home ownership and apartment situations - but that's more to do with cities' housing restrictions rather than the economy.
  - lovich 8y ago
    If you live in a society where money == power, then rising inequality does make your life worse. Maybe today you get the benefits of new tech and it's and improvement, but tomorrow is a vote on if you get healthcare or not and you have less influence in society so you have less say in your destiny and things that affect you directly

nradov 8y ago

You would expect to see average wages decrease as companies hire less experienced, less productive workers who are just starting new jobs. So in a way it could be sort of a good sign since those workers wouldn't have found jobs at all when the economy was weaker, but it's hard to tell what's really going on based on that data. (I agree the economy still isn't good for many people.)

sandworm101 8y ago
>> You would expect to see average wages decrease as companies hire less experienced, less productive workers who are just starting new jobs. In a truly booming economy people, bodies, matter more than skills. Skills can be trained after employment. I would expect companies to be paying more regardless of background. Any lesser pay for new people would/should be balanced by greater pay to retain trained people. None of that is happening. Wages are up a tick here and there, but not substantially. It will be booming when I see wages growing as a percentage of profits, when companies start tightening profit margins to retain people.

ballenf 8y ago

Here's what I see: fewer unemployed people around me, but the employed are deep in debt and gradually slipping deeper into it. Standard of living hasn't gone down, but it's financed with debt while interest rates are creeping up.

nine_k 8y ago
"Financed with debt" is another way to say "Can't afford". You can finance an enterprise with debt because it may produce income, and the debt will be repaid. But financing consumption with increasing debt is... dangerous at best.
- toomuchtodo 8y ago
  As someone else said in the thread [1], just existing in America is very expensive. It’s easy to conflate consumption vs necessary expenses needing to be financed, but you do what you have to do. It takes 20 years of nothing going wrong to escape poverty [2]. Imagine how easy it is to get back there. [1] https://news.ycombinator.com/item?id=17594826 https://news.ycombinator.com/item?id=17594826 [2] https://www.theatlantic.com/business/archive/2017/04/economic-inequality/524610/ https://www.theatlantic.com/business/archive/2017/04/economi...
  - falcolas 8y ago
    Very easy. Just get very sick and survive it. Or have a dependent do the same.
  - nine_k 8y ago
    "Consumption" is just something that does not produce an income. It's not about some excessive consumption. I mean, if you buy your 100" TV with debt, it's that not great, but if you buy your daily bread with debt, you're in a big trouble.
    - toomuchtodo 8y ago
      > but if you buy your daily bread with debt, you're in a big trouble. That's the problem. People are funding survival on credit. How do you fix that? Raise wages. How do you raise wages outside of macro supply/demand factors (interest rates, employment slack)? Politics.

CompelTechnic 8y ago

Many of the facts you stated are relatively invariant to the strength of the economy. I do not have good sources to describe how they have changed over time, but I would assume that points 1,3,4, and 5 are true nearly all the time. Additionally, for point 2, real wages going down on a timespan of 1 year is essentially noise in the face of rising real wages by various measures by FRED. https://fred.stlouisfed.org/tags/series?t=real%3Bwages https://fred.stlouisfed.org/tags/series?t=real%3Bwages

wiz21c 8y ago
If it's invariant then I find it even more disturbing.
- CompelTechnic 8y ago
  A lot of these facts are designed to make scary headlines. #1 and #3 are both symptoms of a common cause- essentially zero savings rate for a wide swath of the American population. For the large fraction of people, failing to save is a behavioral phenomenon. For many people, doubling their income would still result in them living paycheck to paycheck. For #5, 17% of canadian children are living in poverty, 1 in 5 French children live in poverty, and poverty affects more than one in four children in the UK today (https://globalnews.ca/news/3739960/canadian-census-children-poverty/ https://globalnews.ca/news/3739960/canadian-census-children-...) (http://www.france24.com/en/20150609-unicef-report-france-child-poverty-economic-crisis-education http://www.france24.com/en/20150609-unicef-report-france-chi...) (http://www.cpag.org.uk/content/child-poverty-facts-and-figures http://www.cpag.org.uk/content/child-poverty-facts-and-figur...). Of course, each country sets its own poverty line to represent a socially-empathetic income level, resulting in pretty-even levels of nominal poverty across countries. It is not that surprising that expanding the scope of headline-worthy impoverishness to be "low-income or in poverty" would result in headline #4.

cabaalis 8y ago

All valid points, but I believe "strong economy" versus "personal wealth" are very different measures, and have been conflated in the past when it suited various arguments.