The White House believes American workers have seldom had it so good. And lots of prestigious economists agree. But the voters aren’t buying. Maybe they know something?
I am instantly suspicious. If the thesis is "the experts think things are good, but the non-experts don't agree, I'm on team non expert" then that's instantly a little weird.
Unemployment is low. Inflation has fallen. Real earnings are rising. GDP growth has held up—so far. The economists are happy, but for some reason the voters are not! It must be their own ignorance and obtuseness—so says Paul Krugman, house economist of The New York Times.
Bro what the fuck
Those first few things sound pretty good
Right? Is there a reason to disagree with the idea that they're good things, and if someone "feels" things aren't good, then maybe the issue is their feelings and perception and not the economic reality?
A low jobless rate can mask a great deal of stress in such households.
Yes, it can. Is it? In this case?
The employment-to-population ratio is still a bit below where it was in 2020, and far below where it was in 2000; average weekly hours are still falling.
Well, by all means, if we're looking for an accurate picture, let's focus in on the metric that includes people who worked 1 hour a week or people who gave up looking for work in "employed." Let's not address anything related to the actual results that are being shown by other metrics, but merely point out that in a theoretical sense they could potentially be misleading, in some scenarios, whether or not that's the current scenario.
Next, consider inflation
Dude. This next piece is even worse. It's a fucking masterclass in misleading. It's honestly impressive.
Okay, so first, the reality:
- Per capita average income, in constant dollars, is going up. I.e. wages are outpacing inflation. That's fairly impressive given that we've had absolutely historic inflation after Covid's supply-chain troubles and this surge of corporate greed raising prices, and most first-world countries have seen inflation rise faster than wages.
- But, it gets even more interesting when you break it down by income level -- at the 90th percentile, wages actually are falling, but at the bottom (10th percentile), they're rising. I.e. that average growth is actually driven by wage growth at the bottom end, as wage inequality shrinks overall. (All those $15/hr entry-level jobs that are now standard that didn't used to be, all those fast food places closed for the day because "no one wants to work" for the wages they're paying).
So with that reality in mind, let's look at how they try to spin it into something bad:
, which is the rate of price change measured month-to-month or year-to-year. But what matters to consumers is prices in relation to household incomes over several years.
Accurate (the numbers are up above, but they do not attempt to present them, for obvious reasons -- they just explain what they are, in a way that strongly implies that they would show a bad picture if they decided to show them)
In 1980 Ronald Reagan famously asked, “Are you better off than you were four years ago?"
Accurate, he did
Today, millions of American households are worse off than they were in 2020.
Accurate. There are 336 million people in the United States. If 1.25 percent of them are worse off, then millions of Americans are worse off than they were in 2020.
Basic living costs, such as gasoline, utilities, food, and housing, have risen more than their incomes have.
Accurate. Again, the majority of Americans have had their income rise faster than inflation. And yet, by making the completely true statement that "millions" of people have had their income fall, they make a little trickiness that sounds like the typical person has had their income fall.
Real median household income peaked in 2019 and fell at least through 2022.
Median income is actually pretty steady (-1%). The average increase stems from growth at the bottom, no change in the middle, and loss at the top. I.e. reduced inequality. That's very unusual for a challenging economic time.
Yes, but didn’t real wages go up sharply in 2023? According to the Biden-friendly Center for American Progress, real wages (for those continuously employed) have indeed now recovered roughly to where they would have been had no pandemic occurred.
Yes, according to them and many other experts Biden-friendly and not. But this framing makes it sound like only the Biden friendly people say this.
But there is a great distinction between steady progress and a sawtooth down-and-up. The former breeds confidence; the latter does not.
So we're winning, but it could be a "sawtooth," so it doesn't count. Got it.