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This would explain why 99% or so of the US population's lived experience is that we're currently in a recession yet the economic statistics make it look like th

This would explain why 99% or so of the US population's lived experience is that we're currently in a recession yet the economic statistics make it look like the economy is booming. Indicators that the economy is extremely bad right now include the current state of the job market and that Toys for Tots is seeing a massive decline in donations along with a simultaneous increase in need for toy donations[0]. That's not something that would be happening if we had 5% growth and 0% inflation like the president claims[1], at least if that looks remotely like it did back in the 1980s and 1990s during the Reagan and Clinton booms when the American economy was actually booming for everybody. [0]: https://www.nbcphiladelphia.com/news/local/our-bins-are-empty-philly-area-toys-for-tots-in-need-of-donations/3709281/ https://www.nbcphiladelphia.com/news/local/our-bins-are-empt... [1]: https://twitter.com/POTUS/status/1730949376904688046 https://twitter.com/POTUS/status/1730949376904688046

chiefalchemist 3y ago
To your point, every month we hear about the low unemployment rate, or the number of new jobs, etc. But we never hear about the average pay rate of the employed, or the pay and benefits of the new jobs created, or how many jobs someone has to work to afford a 2 BR place to live. Yes, sometimes these' things are mentioned in passing. But they're rarely is every used to make the case for "the economy is great..." Zoom out far enough, use aggregate data, and avoid details, and you can make property on the moon as sexy a beachfront property in Miami.
- lifestyleguru 3y ago
  Isn't number of Americans with two full time jobs at all time high currently?
  - akavi 3y ago
    No[0]. As a percent of population, number of Americans with multiple jobs is well south of where it was from 1994-2009. [0] https://fred.stlouisfed.org/graph/?g=1cpAm https://fred.stlouisfed.org/graph/?g=1cpAm
    - chiefalchemist 3y ago
      Somehow I bet that's counting "on the books" employment. There are plenty of people with (cash) side-hustles and such. How people cope financially today isn't the same as 30 yrs ago.
      - kasey_junk 3y ago
        Why would there be more cash side hustles now than in the past? If anything I’d expect the rise of side hustle platforms, all electronic payments and the ease of getting into it to lower the number of uncounted side hustles.
- gruez 3y ago
  >But we never hear about the average pay rate of the employed It takes 30 seconds search to turn up: Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over 1982-84 CPI Adjusted Dollars, Seasonally Adjusted https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q The source above is deflated by CPI, and shows that earnings has been flat compared to pre-pandemic levels. Not great, but not terrible either. Some other sources point out that if you use the PCE deflator instead, earnings are actually up modestly (3% since 2019). https://www.economist.com/finance-and-economics/2023/11/30/real-wages-have-risen-in-america-and-are-rebounding-in-europe https://www.economist.com/finance-and-economics/2023/11/30/r...
  - tuatoru 3y ago
    Now add the "All-Transactions House Price Index for the United States" line to the same chart.
    - gruez 3y ago
      I mean if you cherry pick which parts of the CPI basket to look at, you're almost guaranteed to find something that's growing faster than wages. The whole point of CPI is that you take all living costs into account, rather than cherry picking one particular item.
      - tuatoru 3y ago
        Sentiment is not rational in this way. Ownership of a house is one of the major milestones of life. If many people are being prevented from achieving it, they are going to say things are bad.
        kasey_junk 3y ago
        Home ownership rates are down (a few %) from their historical highs pre 2008 but broadly higher than historical norms and trending upwards since a 50 year low in 2016. https://fred.stlouisfed.org/series/RHORUSQ156N https://fred.stlouisfed.org/series/RHORUSQ156N
- FirmwareBurner 3y ago
  Don't know why you've been downvoted but you raise good points. Record low unemployment doesn't also mean record high QoL. It's easy to reduce unemployment if you also cut back on welfare while CoL increases, forcing people to take whatever shit jobs they can find just to not become homeless, and voila now you have record low unemployment.
- burningChrome 3y ago
  We've also had pretty good wage growth, but you'd never know because inflation is outstripping the wage growth so its negative. Which is why I'm puzzled why people keep touting the economy is so awesome. People are making more money, but it sure wouldn't feel like it when everything you buy is vastly more expensive. Even people on social media are talking about how they can't even go for a fast food meal anymore because its gotten too expensive. Fast food, too expensive. Think about that for a moment.
  - JumpCrisscross 3y ago
    > you'd never know because inflation is outstripping the wage growth so its negative This is incorrect for most Americans and in most American zip codes [1]. [1] https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q
    - burningChrome 3y ago
      2021: While those paychecks were 4.1% larger in November than they were in January, they will buy 2.8% less due to rising prices. Those rank-and-file workers have suffered less than their bosses. For all private sector workers, including managers and executives, weekly earnings averaged 3.1% more but could buy 3.0% less. 2022: With an overall increase of 4.7%. But with inflation at 7%, the average person lost ground in terms of real income. This was particularly true for the middle half of earners who saw a median wage increase of only about 2.5%. The picture was a bit better for low-wage earners, but not enough to shift the broader pattern for 2021: Inflation outpaced wage increases. 2023: Inflation roared back to the highest level in over 40 years, then slowed markedly. In all, consumer prices are up nearly 15.7%. Gasoline is up 51.2%. Raw wages, unadjusted for inflation, have risen every quarter of Biden’s presidency, and generally at higher rates than wages rose under his predecessor, Donald Trump. But once you adjust for inflation, many of these gains disappear. Real wages — that is, inflation-adjusted wages — fell or were unchanged during the first six quarters of Biden’s presidency.
  - gruez 3y ago
    >We've also had pretty good wage growth, but you'd never know because inflation is outstripping the wage growth so its negative Source? BLS data[1] shows that CPI-adjusted wages are marginally up compared to pre-pandemic levels. There was a spike during the pandemic and current levels are down compared to that, but that's an issue with data collection rather than workers getting magically getting pay hikes during the pandemic. Specifically the lockdowns hit retail and hospitality workers the hardest. Those jobs also tend to pay low, so if those people aren't employed, the average goes up. [1] https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q
- canyonero 3y ago
  Speaking about the US only (w/o actual data to back it up, just a feeling over the last year) is that lower-wage jobs have been on the rise out of the sheer necessity for businesses to attract warm bodies. Folks in the middle (low-middle -> high-middle( have had their wages depressed and lowered while the wealthiest individuals have had no impact or have seen their wages increased at or beyond inflation. The combination of very wealthy folks doing better and the lower income earners having higher wages has created dissonance around the reporting in the overall health of the economy IME.
coffeefirst 3y ago
The other overlooked signal is for most Americans housing is their #1 expense. Rent is spiked, buying costs twice as much as it did before. This is so essential to the average person’s finances that it overshadows every other stat about employment and consumer prices.
- skyyler 3y ago
  I can't afford rent anymore in the bay area so my choices are find a job somewhere else or live in my car. Wondering if living in my car in the bay area would be better than living in an apartment in Iowa.
  - burningChrome 3y ago
    >> Wondering if living in my car in the bay area would be better than living in an apartment in Iowa. The cost of living in Iowa is in the top 5 lowest cost of living states in the entire country. You could probably find a 900sq ft apartment with underground, heated parking in Iowa for the cost of your apartment in the bay area.
    - lotsofpulp 3y ago
      The monetary cost of living in Iowa. The opportunity cost, however, will vary greatly person to person.
    - skyyler 3y ago
      Yes, but then I would have to work a job local to me in Iowa. I haven't found remote work willing to deal with that yet.
    - GenerocUsername 3y ago
      Lol. Bay area folks thinking a 900sw ft apartment is big. You could have a 2000 sq ft apartment in Iowa for the cost of a 500sqft bay area apartment
- fzeroracer 3y ago
asdfsadffdsa23 3y ago
The job market is super hot, what are you talking about saying it's "extremely bad"? As far as Philly's Toys for Tots being down this year, you'd really need data on more cities and charities to actually support your point that things are extremely bad, no?
JumpCrisscross 3y ago
> would explain why 99% or so of the US population's lived experience is that we're currently in a recession No, it wouldn’t, because median wages are up higher than median local inflation. In most zip codes, and for most Americans, real earnings are up. The problem is we feel nominal cost increases as inflation and nominal wage increases as personal achievements. (Real wages are also lower than pandemic levels after accounting for stimulus, which creates a basis problem.)
- Tyrek 3y ago
  Real wages are also barely up (0.8% [1]), when comparing Q4'19 vs Q3'23, which is a poor showing for 4 years. [1] https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q - 3/362
  - NewJazz 3y ago
    Seems pretty typical. 2000-2008 clocked in at ~1.8% real wage growth according to your source.
- deleted 3y ago
  [deleted]
- GenerocUsername 3y ago
  Everyone knows the inflation numbers published by gov are not realistic, so wages have risen more than published numbers, but not real life.
abeppu 3y ago
> This would explain why 99% or so of the US population's lived experience is that we're currently in a recession yet the economic statistics make it look like the economy is booming. In the context of reporting talking about benefits to the super rich, I actually can't tell if this claim about the 99% is intended to be literal or hyperbole. But the Michigan consumer sentiment and expectation numbers and process seem to indicate that it's certainly not such an overwhelming majority who are worse off and expect to get worse off. Both ICS and ICE are up from this time last year, even if they're below their longer-run averages. And the inputs of these are variables that are based off of favorable% - unfavorable% for survey questions. http://www.sca.isr.umich.edu/ http://www.sca.isr.umich.edu/
baron816 3y ago
There’s an active academic debate about whether inequality has actually been rising: Why economists are at war over inequality: https://www.economist.com/finance-and-economics/2023/11/30/income-gaps-are-growing-inexorably-arent-they https://www.economist.com/finance-and-economics/2023/11/30/i... There’s plenty of evidence that it isn’t. One thing’s for sure is that wages for lower income people in the US have been rising faster than anyone else.
_yb2s 3y ago
I mean, there must be something seriously bad happening. Despite the economy supposedly booming, homeless populations around where I live are obviously skyrocketing. What I also don't understand is that official statistics show maybe a ~20% homeless population increase in the last decade, and still a long term trend of big drops. Yet there are obviously 10-100x as many homeless as there were a decade ago in Northern California. It's so obvious that the statistics cannot possibly be even remotely correct... I've been living here and seen it happen first hand.
- lotsofpulp 3y ago
  What is not remotely correct is comparing local anecdotal statistics to unrelated national non anecdotal statistics.
  - _yb2s 3y ago
    No, I was looking up local statistics for the same areas where I have lived in Northern California. There is an order of magnitude or more discrepancy- something does not add up.
    - lotsofpulp 3y ago
      I do not see the connection between homelessness and statistics showing economic booms. For example, 20% of people can be experiencing none of the economic gains. That is the problem with average statistics that do not show the change in distribution.
      - _yb2s 3y ago
        Exactly, that is the point....
        lotsofpulp 3y ago
        I wish data was published by decile instead of just mean or median averages. Another thing that confounds people is that they are comparing themselves to a certain socioeconomic class not well represented in the data. For example, if you are on this forum, you are probably in the socioeconomic class that works for well funded businesses, and own equity in the public markets, and even more so, equity in the most profitable portions of the public equity markets. That means if you are competing for goods and services (including land) with people who have those characteristics, then your perceived rate of inflation is going to be very different than someone who is competing with people in different socioeconomic classes. For example, a lifestyle that involves eating avocados regularly, flying at least a few times per year, and most importantly, buying land in a region where other people in the top 10% or 20% are also competing to buy land.
akavi 3y ago
The economic statistics that show the economy is booming are medians (eg, median real personal income and median household income) and population ratios (ie, things like prime employed percentage of population), which are insensitive to small numbers of outliers like the richest families.
deleted 3y ago
[deleted]
danans 3y ago
> This would explain why 99% or so of the US population's lived experience is that we're currently in a recession yet the economic statistics make it look like the economy is booming. For many, this is to a significant degree due to the high price of housing and education (whether paying for your children's education or paying off your own educational debt). All of this is in a context where median real wages haven't increased in 50 years: https://sgp.fas.org/crs/misc/R45090.pdf https://sgp.fas.org/crs/misc/R45090.pdf > Indicators that the economy is extremely bad right now include the current state of the job market The current state of the job market is that 199k jobs were added in November and the unemployment rate came down to 3.7%: https://www.bls.gov/news.release/empsit.nr0.htm https://www.bls.gov/news.release/empsit.nr0.htm > That's not something that would be happening if we had 5% growth and 0% inflation like the president claims Note the clarification on the tweet that 0% it is referring to the PCE - the monthly change in inflation, not the latest inflation rate, which is 3.24%. Nonetheless it's very clumsy wording by POTUS. > at least if that looks remotely like it did back in the 1980s and 1990s during the Reagan and Clinton booms when the American economy was actually booming for everybody. That claim isn't supported by the historical data. https://eprints.lse.ac.uk/59386/1/blogs.lse.ac.uk-Rising_income_inequality_in_the_US_was_fuelled_by_Ronald_Reagans_attacks_on_union_strength_and_contin.pdf https://eprints.lse.ac.uk/59386/1/blogs.lse.ac.uk-Rising_inc... Note that family inequality grew under both Reagan and Clinton. The article posits that this was due to Reagan's anti-union activity and Clinton's financial deregulation.
allemagne 3y ago
>That's not something that would be happening if we had 5% growth and 0% inflation like the president claims[1], at least if that looks remotely like it did back in the ... That's exactly the issue though. Nobody has seen an economy like this. Economists who spend their whole careers trying to understand and document how economies evolve aren't trying to pull one over on you, they just aren't sure themselves what's going on. People are falling over themselves to declare a recession, even though they themselves are not acting like they're in a recession: https://iop.harvard.edu/youth-poll/46th-edition-fall-2023 https://iop.harvard.edu/youth-poll/46th-edition-fall-2023 >4. Young Americans have a favorable view of their personal financial situation. At the same time, a substantial majority hold a negative perception of America's economy. Is the economy bad anyway? Who knows! Maybe it depends on whether you want it to be. That Biden tweet and the Community Notes on it are a perfect distillation of how to pick your own narrative: >Inflation was 0% last month – and our economy grew by more than 5% last quarter. To me, this is crystal clear: prices on average didn't rise during the month of November and GDP rose by 5% during Q3. The community notes, meanwhile, is written as though Biden should have said "inflation was 3% during November" and to say otherwise is so misleading that he might as well be lying: >Tweet is referring to the PCE index, % change from the preceding month. Inflation is normally assessed annually (12 months) however, & the Fed’s PCE goal is 2%. It is currently 3% All of these numbers are totally accurate. Biden wasn't lying, the Community Notes aren't misrepresenting anything either. There's no contradiction at all, but so many people appear to be left with the impression that deception is happening and Biden got caught. I am not an economist, but it seems to me that if someone has to think for more than a moment about what "0% inflation in November" could refer to in this context (presumably because they are so incredibly attuned to expecting the "normally assessed" annual number) then I don't think they understand the concept of inflation at all. If we're catering to people like that then frankly the sky is the limit for giving them whatever impression they want in whatever direction they already want to be led. The same person could also just be confused the exact other way by using the annual number, and assume that "3% inflation in November" means that "prices rose by 3% in November." The same person could think that "inflation" won't be over until prices "go down", so until we have a massive recession and deflation these permanently "high" prices will forever prove that Biden "never got inflation under control". Maybe that's fine if you're just want to be mad at [current president] but if you want to get closer to the truth or make decisions based on the economic environment as it actually exists then rather than work backwards from the conclusion that the economy is bad, it's probably better to pay attention to both your lived experience and what experts are saying, live in that tension rather than reach for conspiratorial thinking, and withhold judgment until absolutely necessary.

chiefalchemist 3y ago

To your point, every month we hear about the low unemployment rate, or the number of new jobs, etc. But we never hear about the average pay rate of the employed, or the pay and benefits of the new jobs created, or how many jobs someone has to work to afford a 2 BR place to live. Yes, sometimes these' things are mentioned in passing. But they're rarely is every used to make the case for "the economy is great..." Zoom out far enough, use aggregate data, and avoid details, and you can make property on the moon as sexy a beachfront property in Miami.

lifestyleguru 3y ago
Isn't number of Americans with two full time jobs at all time high currently?
- akavi 3y ago
  No[0]. As a percent of population, number of Americans with multiple jobs is well south of where it was from 1994-2009. [0] https://fred.stlouisfed.org/graph/?g=1cpAm https://fred.stlouisfed.org/graph/?g=1cpAm
  - chiefalchemist 3y ago
    Somehow I bet that's counting "on the books" employment. There are plenty of people with (cash) side-hustles and such. How people cope financially today isn't the same as 30 yrs ago.
    - kasey_junk 3y ago
      Why would there be more cash side hustles now than in the past? If anything I’d expect the rise of side hustle platforms, all electronic payments and the ease of getting into it to lower the number of uncounted side hustles.
gruez 3y ago
>But we never hear about the average pay rate of the employed It takes 30 seconds search to turn up: Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over 1982-84 CPI Adjusted Dollars, Seasonally Adjusted https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q The source above is deflated by CPI, and shows that earnings has been flat compared to pre-pandemic levels. Not great, but not terrible either. Some other sources point out that if you use the PCE deflator instead, earnings are actually up modestly (3% since 2019). https://www.economist.com/finance-and-economics/2023/11/30/real-wages-have-risen-in-america-and-are-rebounding-in-europe https://www.economist.com/finance-and-economics/2023/11/30/r...
- tuatoru 3y ago
  Now add the "All-Transactions House Price Index for the United States" line to the same chart.
  - gruez 3y ago
    I mean if you cherry pick which parts of the CPI basket to look at, you're almost guaranteed to find something that's growing faster than wages. The whole point of CPI is that you take all living costs into account, rather than cherry picking one particular item.
    - tuatoru 3y ago
      Sentiment is not rational in this way. Ownership of a house is one of the major milestones of life. If many people are being prevented from achieving it, they are going to say things are bad.
      - kasey_junk 3y ago
        Home ownership rates are down (a few %) from their historical highs pre 2008 but broadly higher than historical norms and trending upwards since a 50 year low in 2016. https://fred.stlouisfed.org/series/RHORUSQ156N https://fred.stlouisfed.org/series/RHORUSQ156N
FirmwareBurner 3y ago
Don't know why you've been downvoted but you raise good points. Record low unemployment doesn't also mean record high QoL. It's easy to reduce unemployment if you also cut back on welfare while CoL increases, forcing people to take whatever shit jobs they can find just to not become homeless, and voila now you have record low unemployment.
burningChrome 3y ago
We've also had pretty good wage growth, but you'd never know because inflation is outstripping the wage growth so its negative. Which is why I'm puzzled why people keep touting the economy is so awesome. People are making more money, but it sure wouldn't feel like it when everything you buy is vastly more expensive. Even people on social media are talking about how they can't even go for a fast food meal anymore because its gotten too expensive. Fast food, too expensive. Think about that for a moment.
- JumpCrisscross 3y ago
  > you'd never know because inflation is outstripping the wage growth so its negative This is incorrect for most Americans and in most American zip codes [1]. [1] https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q
  - burningChrome 3y ago
    2021: While those paychecks were 4.1% larger in November than they were in January, they will buy 2.8% less due to rising prices. Those rank-and-file workers have suffered less than their bosses. For all private sector workers, including managers and executives, weekly earnings averaged 3.1% more but could buy 3.0% less. 2022: With an overall increase of 4.7%. But with inflation at 7%, the average person lost ground in terms of real income. This was particularly true for the middle half of earners who saw a median wage increase of only about 2.5%. The picture was a bit better for low-wage earners, but not enough to shift the broader pattern for 2021: Inflation outpaced wage increases. 2023: Inflation roared back to the highest level in over 40 years, then slowed markedly. In all, consumer prices are up nearly 15.7%. Gasoline is up 51.2%. Raw wages, unadjusted for inflation, have risen every quarter of Biden’s presidency, and generally at higher rates than wages rose under his predecessor, Donald Trump. But once you adjust for inflation, many of these gains disappear. Real wages — that is, inflation-adjusted wages — fell or were unchanged during the first six quarters of Biden’s presidency.
- gruez 3y ago
  >We've also had pretty good wage growth, but you'd never know because inflation is outstripping the wage growth so its negative Source? BLS data[1] shows that CPI-adjusted wages are marginally up compared to pre-pandemic levels. There was a spike during the pandemic and current levels are down compared to that, but that's an issue with data collection rather than workers getting magically getting pay hikes during the pandemic. Specifically the lockdowns hit retail and hospitality workers the hardest. Those jobs also tend to pay low, so if those people aren't employed, the average goes up. [1] https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q
canyonero 3y ago
Speaking about the US only (w/o actual data to back it up, just a feeling over the last year) is that lower-wage jobs have been on the rise out of the sheer necessity for businesses to attract warm bodies. Folks in the middle (low-middle -> high-middle( have had their wages depressed and lowered while the wealthiest individuals have had no impact or have seen their wages increased at or beyond inflation. The combination of very wealthy folks doing better and the lower income earners having higher wages has created dissonance around the reporting in the overall health of the economy IME.

coffeefirst 3y ago

The other overlooked signal is for most Americans housing is their #1 expense. Rent is spiked, buying costs twice as much as it did before. This is so essential to the average person’s finances that it overshadows every other stat about employment and consumer prices.

skyyler 3y ago
I can't afford rent anymore in the bay area so my choices are find a job somewhere else or live in my car. Wondering if living in my car in the bay area would be better than living in an apartment in Iowa.
- burningChrome 3y ago
  >> Wondering if living in my car in the bay area would be better than living in an apartment in Iowa. The cost of living in Iowa is in the top 5 lowest cost of living states in the entire country. You could probably find a 900sq ft apartment with underground, heated parking in Iowa for the cost of your apartment in the bay area.
  - lotsofpulp 3y ago
    The monetary cost of living in Iowa. The opportunity cost, however, will vary greatly person to person.
  - skyyler 3y ago
    Yes, but then I would have to work a job local to me in Iowa. I haven't found remote work willing to deal with that yet.
  - GenerocUsername 3y ago
    Lol. Bay area folks thinking a 900sw ft apartment is big. You could have a 2000 sq ft apartment in Iowa for the cost of a 500sqft bay area apartment
fzeroracer 3y ago

asdfsadffdsa23 3y ago

The job market is super hot, what are you talking about saying it's "extremely bad"? As far as Philly's Toys for Tots being down this year, you'd really need data on more cities and charities to actually support your point that things are extremely bad, no?

JumpCrisscross 3y ago

> would explain why 99% or so of the US population's lived experience is that we're currently in a recession No, it wouldn’t, because median wages are up higher than median local inflation. In most zip codes, and for most Americans, real earnings are up. The problem is we feel nominal cost increases as inflation and nominal wage increases as personal achievements. (Real wages are also lower than pandemic levels after accounting for stimulus, which creates a basis problem.)

Tyrek 3y ago
Real wages are also barely up (0.8% [1]), when comparing Q4'19 vs Q3'23, which is a poor showing for 4 years. [1] https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q - 3/362
- NewJazz 3y ago
  Seems pretty typical. 2000-2008 clocked in at ~1.8% real wage growth according to your source.
deleted 3y ago
[deleted]
GenerocUsername 3y ago
Everyone knows the inflation numbers published by gov are not realistic, so wages have risen more than published numbers, but not real life.

abeppu 3y ago

> This would explain why 99% or so of the US population's lived experience is that we're currently in a recession yet the economic statistics make it look like the economy is booming. In the context of reporting talking about benefits to the super rich, I actually can't tell if this claim about the 99% is intended to be literal or hyperbole. But the Michigan consumer sentiment and expectation numbers and process seem to indicate that it's certainly not such an overwhelming majority who are worse off and expect to get worse off. Both ICS and ICE are up from this time last year, even if they're below their longer-run averages. And the inputs of these are variables that are based off of favorable% - unfavorable% for survey questions. http://www.sca.isr.umich.edu/ http://www.sca.isr.umich.edu/

baron816 3y ago

There’s an active academic debate about whether inequality has actually been rising: Why economists are at war over inequality: https://www.economist.com/finance-and-economics/2023/11/30/income-gaps-are-growing-inexorably-arent-they https://www.economist.com/finance-and-economics/2023/11/30/i... There’s plenty of evidence that it isn’t. One thing’s for sure is that wages for lower income people in the US have been rising faster than anyone else.

_yb2s 3y ago

I mean, there must be something seriously bad happening. Despite the economy supposedly booming, homeless populations around where I live are obviously skyrocketing. What I also don't understand is that official statistics show maybe a ~20% homeless population increase in the last decade, and still a long term trend of big drops. Yet there are obviously 10-100x as many homeless as there were a decade ago in Northern California. It's so obvious that the statistics cannot possibly be even remotely correct... I've been living here and seen it happen first hand.

lotsofpulp 3y ago
What is not remotely correct is comparing local anecdotal statistics to unrelated national non anecdotal statistics.
- _yb2s 3y ago
  No, I was looking up local statistics for the same areas where I have lived in Northern California. There is an order of magnitude or more discrepancy- something does not add up.
  - lotsofpulp 3y ago
    I do not see the connection between homelessness and statistics showing economic booms. For example, 20% of people can be experiencing none of the economic gains. That is the problem with average statistics that do not show the change in distribution.
    - _yb2s 3y ago
      Exactly, that is the point....
      - lotsofpulp 3y ago
        I wish data was published by decile instead of just mean or median averages. Another thing that confounds people is that they are comparing themselves to a certain socioeconomic class not well represented in the data. For example, if you are on this forum, you are probably in the socioeconomic class that works for well funded businesses, and own equity in the public markets, and even more so, equity in the most profitable portions of the public equity markets. That means if you are competing for goods and services (including land) with people who have those characteristics, then your perceived rate of inflation is going to be very different than someone who is competing with people in different socioeconomic classes. For example, a lifestyle that involves eating avocados regularly, flying at least a few times per year, and most importantly, buying land in a region where other people in the top 10% or 20% are also competing to buy land.

akavi 3y ago

The economic statistics that show the economy is booming are medians (eg, median real personal income and median household income) and population ratios (ie, things like prime employed percentage of population), which are insensitive to small numbers of outliers like the richest families.

deleted 3y ago

[deleted]

danans 3y ago

> This would explain why 99% or so of the US population's lived experience is that we're currently in a recession yet the economic statistics make it look like the economy is booming. For many, this is to a significant degree due to the high price of housing and education (whether paying for your children's education or paying off your own educational debt). All of this is in a context where median real wages haven't increased in 50 years: https://sgp.fas.org/crs/misc/R45090.pdf https://sgp.fas.org/crs/misc/R45090.pdf > Indicators that the economy is extremely bad right now include the current state of the job market The current state of the job market is that 199k jobs were added in November and the unemployment rate came down to 3.7%: https://www.bls.gov/news.release/empsit.nr0.htm https://www.bls.gov/news.release/empsit.nr0.htm > That's not something that would be happening if we had 5% growth and 0% inflation like the president claims Note the clarification on the tweet that 0% it is referring to the PCE - the monthly change in inflation, not the latest inflation rate, which is 3.24%. Nonetheless it's very clumsy wording by POTUS. > at least if that looks remotely like it did back in the 1980s and 1990s during the Reagan and Clinton booms when the American economy was actually booming for everybody. That claim isn't supported by the historical data. https://eprints.lse.ac.uk/59386/1/blogs.lse.ac.uk-Rising_income_inequality_in_the_US_was_fuelled_by_Ronald_Reagans_attacks_on_union_strength_and_contin.pdf https://eprints.lse.ac.uk/59386/1/blogs.lse.ac.uk-Rising_inc... Note that family inequality grew under both Reagan and Clinton. The article posits that this was due to Reagan's anti-union activity and Clinton's financial deregulation.

allemagne 3y ago

>That's not something that would be happening if we had 5% growth and 0% inflation like the president claims[1], at least if that looks remotely like it did back in the ... That's exactly the issue though. Nobody has seen an economy like this. Economists who spend their whole careers trying to understand and document how economies evolve aren't trying to pull one over on you, they just aren't sure themselves what's going on. People are falling over themselves to declare a recession, even though they themselves are not acting like they're in a recession: https://iop.harvard.edu/youth-poll/46th-edition-fall-2023 https://iop.harvard.edu/youth-poll/46th-edition-fall-2023 >4. Young Americans have a favorable view of their personal financial situation. At the same time, a substantial majority hold a negative perception of America's economy. Is the economy bad anyway? Who knows! Maybe it depends on whether you want it to be. That Biden tweet and the Community Notes on it are a perfect distillation of how to pick your own narrative: >Inflation was 0% last month – and our economy grew by more than 5% last quarter. To me, this is crystal clear: prices on average didn't rise during the month of November and GDP rose by 5% during Q3. The community notes, meanwhile, is written as though Biden should have said "inflation was 3% during November" and to say otherwise is so misleading that he might as well be lying: >Tweet is referring to the PCE index, % change from the preceding month. Inflation is normally assessed annually (12 months) however, & the Fed’s PCE goal is 2%. It is currently 3% All of these numbers are totally accurate. Biden wasn't lying, the Community Notes aren't misrepresenting anything either. There's no contradiction at all, but so many people appear to be left with the impression that deception is happening and Biden got caught. I am not an economist, but it seems to me that if someone has to think for more than a moment about what "0% inflation in November" could refer to in this context (presumably because they are so incredibly attuned to expecting the "normally assessed" annual number) then I don't think they understand the concept of inflation at all. If we're catering to people like that then frankly the sky is the limit for giving them whatever impression they want in whatever direction they already want to be led. The same person could also just be confused the exact other way by using the annual number, and assume that "3% inflation in November" means that "prices rose by 3% in November." The same person could think that "inflation" won't be over until prices "go down", so until we have a massive recession and deflation these permanently "high" prices will forever prove that Biden "never got inflation under control". Maybe that's fine if you're just want to be mad at [current president] but if you want to get closer to the truth or make decisions based on the economic environment as it actually exists then rather than work backwards from the conclusion that the economy is bad, it's probably better to pay attention to both your lived experience and what experts are saying, live in that tension rather than reach for conspiratorial thinking, and withhold judgment until absolutely necessary.