Ok, real median household income might have reached an all-time high. But what the author has failed to note is the amount of Americans living paycheck to paycheck.
After maxing out my 401(k) and paying down extra principal on my mortgage, there’s nothing left at the end of the month. It’s hard out here for us who are struggling!
I have when I was younger, and it’s quite stressful! I’m not poking fun at people who are struggling, I’m poking fun at people who think that a majority of Americans live paycheck to paycheck.
That may be true. But when my Buy Nothing group is mainly requests for food since SNAP was paused, it certainly doesn't feel that way. Psychologically, it probably feels worse because many people around you own cars, buy new clothes, and go on vacation, whereas in another place or time, you were less likely to have lots of contact with lots of people living the good life.
Social security is up 34% since 2019 and the price of a Chipotle chicken burrito is up 44%, just as an example.
I just came from a small town in NM with basically no real industry, and the diner in town has faced food and labor increases beyond what they can ask their (mostly retiree) customer base to pay, so they’re trying desperately to keep prices low and not go out of business.
What does"fixed income" mean. Wouldn't most of us love to be on a fixed income?
It's this "oh the poor boomers only get a guaranteed check that increases with inflation (aka NOT FIXED) " unlike the rest of us who can lose jobs at any time... (Not fixed in the opposite direction)
It's like how Johnny Sack has no choice but to postpone his Italy trip while construction rackets are shut down https://www.youtube.com/watch?v=41XlLeV7k9o he's living pay check to pay check! Who's gonna keep Ginny in candy bars and Nordstroms clothes!
That article doesn’t show what you think. The only increase mentioned in that article is an increase in the survey response of low savings since 1997. The only more recent comparisons actually show people feeling *less* willing to say they live “paycheck to paycheck” in surveys over the past few years (regardless of what that survey response actually means).
You need actual numbers on people whose savings are increasing or decreasing to say that people are living paycheck-to-paycheck, if you want that concept to mean anything different from “consumer confidence”.
I often find Allan's comments to be a little hard-edged but I really do not understand the objection here. He's clearly not ripping on/making light of people with real financial struggles, but rather people who are doing fine but feel like they're struggling
I could *sort of* defend someone saying this with a straight face for the 401k part. Like, most people should be saving ~15% for retirement, and if your 401k max isn't more than that, not being able to meet retirement standards and have anything left over is a bit concerning.
I've always lived paycheck to paycheck. First I get one paycheck, and then another. Never two at the same time. I guess dying in between payroll periods is one way not to live paycheck to paycheck, but at that point one has bigger concerns. Unless it happens at work, and then maybe it's worker's comp...? This is what I find so inspiring about the story of Hanukkah, with the miracle of moolah lasting eight days after Pharaoh cancelled SNAP benefits. Let my people go to the grocery store!
Very valid point. Even at times when I’ve had multiple jobs, their paychecks were generally not on the same day, and even when they were, there'd always be some measurable interval of time between when they hit my account, probably because they used different payroll providers with ACH batches handled at different times. There’s just no escaping!
The closest I can come to steelmanning the inflation/affordability narrative (either under Biden or now) is that:
1. People get raises due to a) relatively predictable but low annual increases b) regional or industry-wide increased demand for specific types of labor c) personal circumstances like promotions, bonuses, and changing employers or industries
2. In a low-inflation environment, a) is usually enough to make sure that few people fall behind in real terms, even if b) or c) don’t apply to them
3. In a high inflation environment, a) doesn’t work. Overall wages may keep pace with or surpass inflation, as clearly has happened in recent years. But because b) and c) are inconsistent, some sizable percentage of people will fall behind in real terms.
4. Is it plausible, then, that 20% or so of people are worse off than in 2019? I think so. That doesn’t mean that “most people are struggling,” but it does mean that most people probably know someone who is. While social media doomerism doesn’t help, there is some reality to the narrative.
I think you could even go stronger, and say that requiring people to change their jobs in order to maintain the same inflation-adjusted pay (instead of just getting yearly raises at the same job) is an imposed cost that people prefer not to pay.
There's a real disconnect between what affluent guys think is going on in the country economically and what real people feel in their wallet every day, and Matt's post here is just the icing on that cake.
>...what real people feel in their wallet every day...<
Both affluent and non-affluent people are real. What's got your goat is that the available statistical information doesn't comport with your preconceptions.
I upvoted, but Blooming has a point that people are stubbornly ignoring. Aggregate statistics hide uneven distribution of benefits, and it isn't clear that the benefits actually make a difference, even if number is going up.
I wish I lived in a world where we were trying to collect more accurate distributional statistics. The world we actually live in is the president firing the head of BLS because the numbers make him mad.
If it’s obvious to you that the economy is worse than the statistics show, it’s not obvious to everyone. Why not share your argument instead of just snarking and treating it as self evident?
Having trouble finding the thread debunking that statistic, but you should look into the methodology. It does not directly capture consumer spending. It makes inferences about total incomes and expected savings rates and assumes what’s left is spent. It is not corroborated by other estimates.
You're suggesting the anecdotes of a random, anonymous person on the internet have greater explanatory power than statistical information drawn from millions of data points?
I don't think anyone believes the economy is perfect. But on the narrow question of "are real wages declining or increasing" I'm gonna go with the statistics. Your mileage apparently varies.
No, actually I would say he's quite correctly - me as an actual proper economist by training although a financial investment one - highlighting a reality that aggregate statistical information while useful can also for the naive and above all the partisan consumer be quite deceptive.
The aggregate national averages - whether total aggregate or even partially decomposed can and do hide significant variability (and equally hide important differences - this is not to say aggregates are bad, but all tools have their limits, and one should have an awareness of limits).
That data is of course primary but if one falls into fallacies of composition and over-reifies aggregates, one can get politics (and even micro-economic0 effects really terribly wrong.
Which the Democrats & their comparatively affluent professional class partisans have been doing now for about 4 years...
The argument isn’t about whether or not aggregates give us a complete picture. Of course they don’t. In the long post-war boom, wages at the median in America were rising. That indicates increasing prosperity and (critically) widely-shared gains. But even then there were obviously some who weren’t benefiting. That’s always been the case. But the OP seems to have a problem with statistical information itself. Which is problematic. And moreover doesn’t back up their contentions with anything more than anecdotes. Which is even more problematic.
The question is not whether non-affluent people face difficulties, but how their situation compares in relative terms to what it's been historically. Non-affluent people always face some difficulties in life (pretty much by definition) but those difficulties are not unusually bad at this moment compared to the past.
Exactly. There have ALWAYS been people who are doing less well than most (and there always will). Are such folks more common (or doing worse compared to the median) than in past eras of moderate inflation/low unemployment? Maybe! But you can't really make that case via non-supported anecdata and "k hons."
Well if one is doing an economic paper that is the question.
If one is doing a political reaction analysis the question is rather if their **perception** of recent change is such that they see themselves falling back, losing comparatively.
Ample political science have highlighted revolutions align not with simple poverty and oppression but more with periods of improvement followed by a falling back on improvement.
Humans chimp band fundamental mentality feels recent losses and above all compartive losses to others much more than abstract math would weight.
The elite tells me that the earth revolves around the sun, but in my gut I feel that the sun revolves around the earth and I will vote for the guy who respects my gut feeling.
Because averages hide pain points. Median incomes may be up, but essentials—housing, food, insurance, childcare—rose much faster in nominal terms than most people’s paychecks. People don’t live in inflation-adjusted charts; they live in cash flow. When rent, groceries, and car repairs eat more of each paycheck, “real income gains” feel meaningless.
How could it be the case that those essentials rose faster than most people’s paychecks but that this can’t be shown statistically? That seems like the kind of claim that could ONLY be shown statistically!
You certainly can prove that (your words) "median incomes may be up, but essentials—housing, food, insurance, childcare—rose much faster in nominal terms than most people’s paychecks."
This is widely available information. What you got?
I think a better way to state what Late Blooming is possibly trying to get at is Falous's point (in another comment) that the charts and graphs we are using are not accurately capturing disproportionate impacts of certain types of cost increases.
I would note as I noted back in the Biden Days and Dem / Lefty Inflation Splaining / Inflation Denialism that structurally speaking there are some important consumption basket variances that overweight impact and stress lower-to-lower middle income wage earners which median data do not well capture.
Middle income to upper middle income (i.e. the Democrats now "core") face quite structurally different revenue constraints. And so Professional Class has a tendency to poo poo inflation impacts on psychological point for LI and LMI econ segments.
also the case that national aggregates are without doubt here deceptive.
All in all - the take away econometrically should be that for this kind of subject, national aggregates and national averages without close attention to the differing stress impacts on various income levels re inflation acceleration (change above all - people hate change)
This is part of why Biden Admin & Proggy Lecturing and Inflation Splaining was very dumb politics (even if the aggregates are at many levels correct and over time this equalises out).
I thought the data showed the exact opposite of what you're saying. That lower-income people did *better* under Biden than the median data showed, while upper middle income people did worse.
I think you're talking about different things. In terms of real income, poor people did better proportionally. But In terms of the impact of inflation, poor people spend higher fractions of their income on food and housing, both of which were particularly hard hit in 2022.
Before the pandemic I was listening to a money podcast and one of the hosts insisted that inflation was good for workers, especially working class voters because inflation would cause the value of their mortgage, car and student loan balances to go down and they could just ask their bosses for a raise to adjust for inflation. I have no doubt it made sense to her because she was a white collar worker who had a mortgage, student loans and a car loan and she could just ask her boss for a raise, but there are plenty of jobs where you're not going to get a raise if you ask and the company's COLA is below inflation, or you work at a company that's doing badly and is not going to be giving any COLAs or the company just doesn't do COLAs. People who aren't going to get an increase in their paychecks to compensate for inflation are going to be out of luck.
Right. "Poor" and "debtor" are only weakly correlated things. A working class person probably has car debt, and might have credit card debt, but it's small relative to their income. An early career professional could have 4x their income in mortgage and student loan debt.
Matt’s doubling down on the technocrat’s belief that aggregate, estimated statistical measures are facts and reality that people should pay attention to instead of their personal circumstances. The problem is aggregate national statistics have and hide a lot of churn and variability under the surface not only at the individual level, but also locally and regionally. They are good for looking at trends, but that’s it.
It’s the same tone-deaf response Democrats had before the election trying to lecture people about how the economy was actually good, seemingly unaware of that churn and variability. People aren’t a modeled statistical average in reality.
At the same time “living paycheck to paycheck” is not a rigorous term with a clear and measurable definition. I’ve known, for example, a few people who are upper-middle class over the years say they live paycheck-to-paycheck and while that is true in the moment in some hand-wavy sense, it’s entirely because they chose to chase a lifestyle they can’t afford.
In short, and maybe it exists, but we need something that isn’t so subjective to measure who is actually on the brink in paycheck-to-paycheck terms and how many there are now compared to the pre-inflation era.
This is what I suspect. I certainly believe the aggregate statistics accurately reflect the aggregates, and I don't doubt that a portion of the discontent is because people aren't accurately keeping track of all prices (just noticing the salient ones) and can't do the relevant math in their heads. But I seriously doubt that those two tell the whole story.
I came out fine, e.g.; I got a raise that was higher than inflation and the stuff I spend money on (think morgage) inflated less than average. So my disposeable income went up. I'm not the only one. To keep the averages in the middle, others had to go down.
I haven't seen the relevant data, and maybe they don't even exist, but I bet the individual level correlation between nominal income and nominal disposeable income went down substantially.
It doesn't have to be many people to turn a close election. Trump only won the popular vote by 1.5%. It is also worth considering that bond cupons and annuities are almost never indexed for inflation, and the elderly vote more reliably than anyone.
My family income has gone down, but it spiked during Covid, so not unexpected.
And costs varied quite a bit. We are lucky to have a mortgage we refinanced at the trough (2.25%), but our insurance costs have almost doubled, and about a 10-15% increase in food - and with two (and sometimes 3) teens in the house, we go through a lot.
Other people I know are about the same or have come out better. Anyone who has to move is having a hard time due to housing/mortgage costs.
So much depends on individual circumstances and location.
"Matt’s doubling down on the technocrat’s belief that aggregate, estimated statistical measures are facts and reality that people should pay attention to instead of their personal circumstances."
This would make sense but for the fact that, at least in the lead-up to the last election, people consistently rated their personal finances as being pretty good at the same time that they said the broader economy was in shambles. People would have been more positive about the economy if they had paid *more* attention to their personal circumstances, not less!
And when was the last century when THAT was not true of most people? Even if you are paying dow a mortgage and putting something into a 401k, does it not still "feel" like living paychek to paycheck?
One of my grand theories of everything is that people globally are just vastly richer than they were even 20-30 years ago. Things that were considered luxuries (Cabo Bach parties, week long trips to Disney, tours of Europe) are just so much more common. Add in social media and now everyone feels like they need to be making more to stay ahead to what “normal” is
This is the fundamental problem with the Bernie/AOC wing. They keep talking about a problem that’s limited to a certain number of people. Even if they make progress on the overall economy, some people are still going to be in this situation. So, do you say that the mission has been accomplished or do you keep lying? If you keep lying, what did you achieve when you were in power?
Yglesias works for the same ruling class that was telling us how great Bidenomics were working and that if we were struggling there was something wrong with us.
It's either hate-read or live in a bubble, regrettably. I am skeptical-to-opposed to many viewpoints here, but I subscribe to expose myself to what are hopefully the best arguments for positions I disagree with.
I thought Biden got a raw deal from a whiny American electorate that was catastrophizing about what was on the whole a pretty good economic situation for them, but now that the whiny American electorate is catastrophizing about what is on the whole a pretty good economic situation for them under Trump, I'm much more forgiving.
If it's equal opportunity whining I can live with it.
Do you believe in counterfactuals? Matt certainly does, and his argument was always that the world where "Bidenomics" didn't happen was a lot worse off than the one that did.
Mean vs median consumption may be behind some of the disconnect with Matt’s article vs some other things I’ve seen regarding the K shaped recovery and the tech industry employment crash — pretty sure I’ve seen a lot of coverage like this headline in the past 2 months, where higher higher-income spending offsets lower-income consumers tightening their belts and, in particular, experiencing a spike in debt default events:
The author also forgot to adjust the charts for inflation too! If he did, he would clearly see real incomes are lower now than they were in the past. Unbelievably dishonest work!
"Unbelievably dishonest" is a rather harsh criticism. Especially when your basic claim is false: every chart in the post is showing real amounts (i.e., adjusted for inflation), not nominal amounts. And they are all explicitly labeled with the word "real".
So you're wrong about the economic facts, and you're also wrong about the morals of the author. One wonders how you might choose to respond to this turn of events.
No, everyone here knows the inflation-adjusted charts aren't actually adjusted for inflation. If they were really adjusted, then real incomes would definitely be lower than in the past. That's why so many people are living paycheck-to-paycheck these days.
This is a joke right? Because the survey that statistic is from is junk (it counts people saving for retirement and investing as living paycheck to paycheck.)
I'm as big a fan as Matthew Darling (the guy on twitter who really pushed hard against this pay check to pay check measure) as anyone. And I agree that the SHED measure gets abused by doomer leftists.
But I'd also consider taking a look at Matthew Bruenig's writeup about the topic:
I remember when this came out, will give it a reread today. I remember thinking at the time that this was fair, but also didn't prove what the Bernie crowd was really saying. 60% of Americans are not struggling to get by.
Oh, absolutely. That SHED paycheck stat, as used in partisan politics, is obviously incorrect. One thing I like about the Bruenig article is that it highlights the weird fuzziness and complexity of what "paycheck to paycheck" even means - even if he ends up closer to the 60% figure than I would.
60% of Americans between the ages of 18 and 40 probably are, though. The age breakdown would be interesting to see. Most people, when they think of whether statistics pass the smell test or not, think about their cohort. And I think it just continuously gets harder for people starting out their independent lives over time and has since the 50s
The thing about the argument that people are living "paycheck to paycheck" is it's never specified what we should do even if it were true. I think the fact that the savings rate is pretty stable over time suggests that there are structural and cultural reasons the savings rate is what it is, and changes in pay or the cost of goods will be absorbed into increases or decreases in consumption.
I also think Bruenig's super pedantic analysis about the days of pay your savings would cover misses a few things.
(1) Most people thinking about job loss would probably plan to receive unemployment insurance to cover about half of their earnings.
(2) If you are drawing on savings to cover expenses, that's money you've already paid taxes on. So for someone making ~75k, $8k in savings is probably worth like $12k of pre-tax income.
(3) You presumably were saving 5-10% of your income from your job.
(4) People who confront loss of income will reduce expenses. Some of this will be discretionary (less going out to eat) and some is just mechanical (we pay about $200/month per kid for after school care which is only necessary with 2 working parents).
Finally the analysis of that people "couldn't afford" the $2,000 expense is a bit odd... assuming you still have your income flow it sort of makes sense to have a hard line on how much you'll draw down your savings and borrow to cover a $2,000 expense that would put you below that line.
Right. The only way to seriously reduce the incidence of being "paycheck to paycheck" would be some rather intense paternalism. You have a job and no emergency fund? 20% of your paycheck is garnished towards a savings account that's illegal to withdraw while you're employed. You spent more than 5% of your income on non-essentials? Punitive excise tax.
The whole thing where we've converted dire material living conditions to something about "precarity" without any reflection is kind of odd if you think about it. Like the idea of this seems to be that people are concerned that if they lose their job they will be unable to maintain their living standard, but of course this is the case! Everyone builds their life around the income they have and if they were to lose that income it would be a big problem!
If demanding that your unemployed friends spend $800 on your bachelorette party weekend is now considered to be OK, then things are somehow even worse than I thought they were.
I am cordially acquainted through the Art of the Pen with a Polish Lady of great Poſſeſſions. She hath recently become enamored with a certain Saxon Musician, himself appointed to the Poſition of Compoſer to that State's Court not but 2 Years prior. In recent Letters, she inſiſteth, that I travel to Saxony myself and attend upon the Hymns of this modern Aoede. Shall I forbear, ſhe hath ſtated in no uncertain Terms that our Friendſhip ſhall be at an End.
Unfortunately, I, Wife to a poor country Squire, can little afford overſeas Travel. Nor indeed, do I wiſh to risk my Perſon on ſuch Frivolity as ſhe ſuggesteth: for ſurely one can conclude from our moſt recent Contre-Temps around the Spanish Rock that the Peace ſo recently made at Vienna is fragile ſtill.
Am I fooliſh, to let ſuch Concerns diſſuade me? If not, is it poſſible for me to I explain to her that her Demands are unreaſonable while preſerving our Relationſhip?
I do like that it’s a gender neutral term! I suspect there’s a non-negligible number of people that are now inviting gay friends and even a few friends of the opposite sex.
I suppose, although since the term applies only to the party-haver, it shouldn't really matter in one sense.
But I guess I would be more willing to accept a gender-neutral "bach" than "bach" only applying to bachelorette parties, which would truly be the worst of all possible worlds.
I have a suspicion that the overlap between the audiences for Slow Boring and juicy wedding misbehavior might be low, but you see these sorts of stories all the freakin time on Reddit. Always questionable how true they are but... I've definitely known of some bachelor/bachelorette weekends that were WAY more than this. Remembering how little I was making in my 20s as a grad student and how I had to bail on these... fortunately my friends were understanding of that.
If you've never been through it, you would be amazed at the scope of the wedding-industrial complex, which exists because people are *extremely* willing to pay for things because it's a wedding and supposedly a once-in-a-lifetime event.
Sure, but also because there’s all this new disposable income sloshing around the system! People have funny ideas about this stuff. Where is the money supposed to go if not into extravagant weddings (and “baches” and the rest)? If you don’t like it (and I don’t) then you have a problem with the moral arc of the universe tending towards the masses getting rich.
Some people get into a temporarily-crazy mindset where wedding-related costs become giffen goods: the high price is the point! If you're not spending a lot, then how do you know you're doing everything you can?
I’m an old married lady but I had no dreams of a perfect wedding. My mother did all the work so as to have the wedding she had wanted but didn’t get. I was living in a different part of the country and mostly just showed up. My expectations of the event were *very* low but (probably for that reason) I ended up having a good time.
We got married at the court house and then I suggested to my parents they could cut me a nice check since I'd just saved them so much money. They did. (They had plenty, it wasn't an imposition.)
Yeah, we eloped to DC when the federal government decided to recognize gay marriages performed in the places that allowed them, pre-Obergefell. No big wedding here, just signing the paperwork at a Starbucks and walking down to the courthouse. A high school friend that works at EPA walked over on her lunch break to be a witness.
Not that I think that’s the ideal way, weddings are fun, but it worked for us.
Back in my day the ladies and the gentlemen each had an event that culminated in joining up for a few hours of bowling/drinking. All on the Thursday evening before the Saturday afternoon wedding. I’d guess that the total for everyone, ie food and drinks for 30 people, might have totaled $800.
I got married young, and we had a very small wedding with only immediate family then lunch ina nice restaurant. I thought I would regret it, but I never have, and I stress to my kids that I would be perfectly ok with them eloping.
I’m of the opposite view. As the post details, there’s all this new disposable income sloshing around. What else are you gonna spend it on if not your “bach”? Spending $4k on your bach is equivalent to, what, a single house payment? So it’s not actually going to make a dent in your long-term savings as long as it’s a one-time thing.
My objection is that the sorts of things one spends on to achieve a $4k bachelorette party reflect tastes that don’t exactly scream refined.
Yeah, and then you have to ask whether you’d rather delay your home purchase a year so you can save an extra $25k, or you’d rather have a wedding that is significantly less picturesque and less customized. I can absolutely see many people who are not being irrational in choosing the former, as much as I’m a cold heartless economist like all SlowBorers. And this calculus gets pretty lopsided once we’re talking Bay Area or NY house down payments.
Maybe, though I would argue you can still have a really nice wedding for less.
When we got married the average cost of a wedding was $25k in our area, we did it for about $12k and it was still really nice. It was still probably 100ish people, with a nice BBQ dinner.
If it’s just one person spending $4k, that’s one thing. But if each attendee is spending a similar amount, then you’re no longer doing it once, but a bunch of times during your 20s.
I think making attendance at a pricey bachelorette party being a condition of continued friendship is crazy bridezilla behavior (especially the manipulative complaining that of this woman doesn’t go, everyone else has to pay more).
However, a big wedding can be super fun and it’s the one of two opportunities all of your friends and family get together in one place. The other likely being your funeral - and that’s likely less enjoyable for you.
Maybe not! The wife and I self-funded our wedding and were quite frugal about the whole thing. Everyone had a great time and still speak fondly of the wedding years and years later. My sister’s wedding cost $100k (of my parents money, of course) and she was stressed the whole time, says she regrets the whole thing (okay, not the actual marriage but the fancy destination venue and all the crazy stuff she had everyone running around doing).
My grad student-turned-postdoc gets invited to a handful of these (plus weddings) every summer. The most recent one in Sept. was in Italy! I keep telling her she doesn't have to go, but social etiquette demands it, apparently.
This kind of “social etiquette” makes me glad to be old (sitting on the big pile of money I have saved over the years by not spending on stupid stuff like this—planning your own vacation is great, spending money you’re not making to maintain agreeableness is, IMO, unwise).
Yeah, Italy would be a deal-breaker, but i enjoyed going to my college friends’ weddings around the country during that season of my life. All of those people are still friends, and part of the reason why is taking the time, energy, and money to show up. But it wasn’t crazy money as the destinations were all in the US
I wondered the same thing, but now I've been in the thick of wedding season for a few years and absolutely bonkers shit happens pretty regularly.
A few weeks ago I had a friend invited to a wedding just outside a rural national park where the bride found lodging for half the guests and asked the other half to find their own and bring their own food and stoves for 3 days 💀
A friend of mine went to a fancy private high school for free back in the day because his mother was a teacher there. Fast forward 30 years and his old school chums are wealthy tech bros and whatnot. The weddings, bachelor parties, and other destination guys-only vacays he gets invited to are outrageous I hear.
If it’s obvious you have a friend that can’t afford it, it’s really on you to subtly cover some of their costs so that they’re not stretched, or if necessary reach out and let them know you’re doing that, or if none of that is an option just plan a different party.
Maybe I'm just a fancy upper middle class person as I didn't really get mad about this. Like I wouldn't do something that expensive, and if my friend needed an accomodations I'd certainly make it.
But $800 is just kinda the price of a big, fun, indulgent weekend. It's not exactly billionaire money. You consider a couple nights of reasonable hotel room, some gas, a couple of nice meals, an evening out at a some kind of event, and a few drinks, that's $800. This is a number that's less than a week of take home pay for the median person.
FWIW, the $800 was just for her portion of the vacation rental; total costs would probably end up being 1.5-2x that. I am an upper-middle class person, but I would be mad about someone putting those expectations on me (I guess that's why I don't get invited to bachelorette parties!).
My annual Vegas guys' weekend costs me about $2,500 (without gambling). But I didn't start doing this until I was in my 40's, not my 20's.
But the room portion of that is usually only about $500 (and I get my own room). My thoughts are if she is spending $800 on just the stay, how much is the flight, car rental, food, booze, entertainment, etc?
She might want to duck out. I guarantee she will not gain any kind of pleasure from this trip. Trips that are not all about you usually suck. And I've never met anyone who said "I got $3,000 in debt going to my bestie's bachelorette party and it was the best weekend of my life!"
Well the comparison isn't perfect because on the Vegas trip, you'll make up all that money via winning at the casino. Well maybe not this time, but next time you'll end up on top! Or surely the time after that!
Yeah, the problem isn’t that cost, which is pretty reasonable for a vacation weekend, it’s that this person can’t afford a vacation weekend, they’re unemployed! I sympathize, I was unemployed for quite a stretch there.
You either have time or money but rarely ever both
Yeah I can't blow a 'less than a weeks pay' on a party you're throwing for yourself. Inviting other people to spend money on a vacation for you that you choose is a bit rude. Ditto destination weddings. The destination is a great place for the honeymoon, not the wedding.
I don't think anyone has a problem with people doing these things if they can afford them; I think the issue is demanding that everyone participate in these very expensive vacations and ending friendships if they don't.
Granted, this is one side of the story. I wonder if she already agreed to the price a while ago and then pulled out what seems like last minute.
As a rare young female member of the commentariat, I regret to inform you all that this is a super common ask. In fact my faraway friends and I have non-bachelorette trips that approach this cost. Although $800 is a bit steep in pure housing cost for a weekend.
This 2000s era where I have a bunch of close friends 3 timezones away is exhausting. Social norms have not yet adapted to the invention of the jet engine and SMS. We either need to return to the year 1400 when you lived and died in the same village, or return to the year 1900 when moving from Detroit to Chicago meant you would never see anyone from your old life ever again.
Another piece of the affordability complaining in that piece is that the bachelorette doesn't want to pay the extra cost if one of the members drops out. If there are 5 people and one drops, then the cost goes from $800->$1000 and is that suddenly unreasonable? I assume all of the other costs are probably per person and would not be affected by one person leaving (food, drinking, events). If that encourages another person to drop though, it might spiral.
In 2018, we did a guy's weekend in Austin. The Airbnb and flights were expensive then we mostly drank and played video games while reminiscing and catching up. We did it again this year but at two friends' houses who both live in Denver. They saved on flights, everyone saved on Airbnbs, and we went out a lot more and spent a lot less. That's what I'd recommend anyone to do if they can.
It's $800 only for her share of the vacation rental. There's still food, drink, transportation and any associated activities. Then of course, there's the wedding itself which will involve buying a new dress, if she's a bridesmaid. I can see it being stressful for an unemployed person, for sure.
Fair point. I'm just inured to seeing things about mid four-figure expenses being imposed on bridesmaids, so $800 even just for the room (presumably for two or three nights) didn't seem ridiculous given hotel prices these days.
My brother (best man) was just complaining the last time I saw him about how much he spent on my bachelor party 25 years ago. He spent $500 at a strip club for a bunch of alcohol and some dances.
I feel like I must go on record as saying that I'm not the type of guy to frequent SC's, and this was my only lifetime SC experience. And not my idea! That is what I reiterated to my bride repeatedly.
Not trying to be a prude but I honestly don't get strip clubs. I've never been to one intentionally. One time I was playing poker on the bar and then about an hour in they were like "welcome to the stage blahblahblah" and I was like "oh, I didn't even notice they had that." Wife wasn't mad, she knows I'm too autistic to notice any of that while I'm doing math.
My Democratic plan to promote affordability: a browser extension powered by AI* that converts all nominal dollar figures to inflation-adjusted real dollars. Stretch goal if a 2028 trifecta is achieved: make it into smart glasses, so all prices everywhere are always real. Keeping It Real: A Vote For Democrats Is A Vote For Affordability. You'll never see inflation again!
*"Don't tell me these kids can't learn to code!" -OpenAI substitute teacher in Waiting For Sam Altman, now debuting at Cannes and other fine film festivals
One of the great divisions between Generation X and Millennials, of which Matt and I are right on the cusp, is whether or not one can remember the great inflation of the 1970s.
As such, I want to pose a question to Slow Borers older than us: how long did it take people to get over the fact that prices weren't going down from what they were before? And did the Fed's shock therapy of the early 1980s help speed up getting over that?
I am also on that cusp and a recurring topic of my (boomer) parents family lore is how difficult it was for them to buy their first house (a condo in approximately 1979) because interest rates were so high.
To that point here is a very interesting artifact from Ghostbusters:
Now obviously in context 19% is supposed to be really high even in 1984 but per Google common rates at the time were around 13%. This says to me it was still on people's minds enough to be part of a throwaway joke in a major film.
I was born in 77, but I remember inflation clipping along at 5% for much of the 80s and 90s and people were mostly chill about it because things like cost of living adjustments became standard.
The real issue is when raises are literally based on performance, then you have to perform well just to stay even. Even if your employer puts a thumb on the scale and gives average employees a raise equal to inflation, you are told that you got your 3% bump for performance and you feel like inflation took it from you.
Inflation really does give employers more leverage over ordinary employees, because it makes declining real wages the default. But if your union gets you a cola, it isn’t so bad.
As a small businessman, ai don’t mind inflation because the prices I can charge are highly sensitive to the nominal resources of my client. Inflation has put a dent into my trust fund, but it’s also put a dent in my mortgage. I’ve taken a net loss on those, but if your mortgage is bigger than the wealth you are forced to invest in bonds, it’s net positive.
How do you deal with health insurance rates? I just came back from a conference where a number of directors were worried about the increase in rates because many employees will end up with less money in their pockets despite recent raises
Thanks. I misunderstood. I thought you meant you owned a small business, and was asking how you dealt with insurance cost increases for your staff. But it sounds like you may be your only staff member.
I was a teenager in the 70s, and the main thing I remember is just everyone screaming. The Whip Inflation Now buttons, constant (CONSTANT) newspaper headlines about prices going up, my clothing allowance being wholly inadequate, etc. In my memory, no one expected the prices to come back down. We just wanted them to stop going UP.
The recession of 1981-1982 may be illustrative. Unemployment had been as high as 11% at that point, interest rates were in the double digits, and inflation had also hit double digits, and then fallen to between 5% and 8% during those years. My dad was a low level executive at an energy company, and my mom stayed home. Most of my friends and neighbors worked in factories, and were constantly on the cusp of being laid off, or had been laid off, etc., and prices were a huge source of stress. Everyone was worried all the time. But Reagan was re-elected in a landslide in 1984 - when interest rates were still in the double digits, unemployment was around 7%, and inflation averaged out just below 5%.
I don't know if that indicates people were just used to the higher prices, or felt better because unemployment had fallen, or "vibes" or what. I know that when I bought my first home in 2000-2001 my mortgage rate was over 8%, so when I hear people complaining about 5% rates I smirk; but then again, home values were much lower when I bought my first place, and I managed to buy two more houses (sequentially, I mean) over time when values were still pretty low and interest rates had dropped down in the 2% - 3% range, then sold my last house at a pretty big markup in one market, bought another house at a fairly low price in a more depressed market and still at a low interest rate. Now my house has doubled in value, and I have that low interest rate. So anyone coming along in the past few years is at a real disadvantage in terms of purchasing a house.
Inflation over the past few years, along with a big increase in my property taxes, have put a dent in our income, but we are in an upper-middle income range. My relatives making $25,000 to $50,000 per year definitely feel that pain much more acutely, so telling them that median incomes are up isn't going to convince them that they live in the best of times. My grandparents grew up in crushing rural poverty where most people didn't have electricity or indoor plumbing right through the 1930s, and they were just as likely to use horses as they were to use motor vehicles; my cousins and I were alive during the bad years of the 1970s/early 1980s, but somewhat insulated from it by our youth, and our adulthood has been years of relatively stable prices, low interest rates, and low unemployment. It probably feels pretty bad compared to what they are used to.
I was in high school and college during that period but I don't remember my parents complaining too much as their wages were climbing too. And they had a 4 percent mortgage from 1966 that got increasingly smaller relatively (I think their monthly payment was $170 a month for our house in Laguna Beach, yeah Laguna was cheap until South OC grew into a financial center. That same house was listed at $5 million last year). I do remember the price of bread going from 39 cents to over a dollar. I was living on $50 a month for food in college ---a lot of oatmeal and I don't remember many BBQs, lol.
Perhaps median income/wages have gone up but MINE haven’t! So movie tickets go up, that’s real lack of affordability to me!
Two points I think you missed:
1. Median increases in wages still means there is a significant number of people in the bottom half of the curve who are not making more than inflationary rates, right?
2. A few months of progress doesn’t make up for the backsliding we’ve been experiencing for years.
One more interesting point to add from Derek Thompson's Plain English podcast, of which Matt was a guest. Restaurants like Chipotle and McDonalds have reported less purchases from low-income customers.
I'm assuming this is based on zip codes and averages, but I'm really enjoying the mental image of a Chipotle worker asking me how much money I make immediately after I say "no" to adding guac
I love listening to Matt on audio so I'm excited for this. I know there won't be much new but sometimes one is tired and doing things around the house and too tired for The Economist on Audio or a 4 hour AI podcast.
Especially given that I doubt a lot of people have been getting raises such that their current job pays significantly better. Most people are lucky to get an annual raise that hasn't been entirely consumed by inflation and that just feels like sprinting to stand still.
I totally believe most people who took new jobs have gotten better starting pay than they would have, but that's not most people, and "get a better job" isn't something people can just throw into their household budgeting every six months.
There was a study recently which showed that (a) people have mostly increased their income by job switching and negotiating for higher pay, rather than regular raises and (b) that people hate doing that. Which I think is a big part of why people don't like the current economy.
This echos both my personal feelings on the "modern" economy and what I think folks like Kyla Scanlon and others have noted about modern pricing strategies.
Everything feels gamified and requires you do personally do optimization to get ahead. Whether its being a member of a billion different loyalty programs, having 200 apps downloaded on your phone so that you can harvest benefits from each one rather than pay the price on the menu, cycling through credit cards to get the sign-up bonuses before dipping, or whatever. It feels like you have to invest personal time and effort into every transaction or else you're getting screwed by someone.
So ya, there are ways to make it in this economy, but they all feel shitty. Whether that's constantly needing to jump from one employer to the next to maximize your salary or browsing 13 different apps to figure out the best one to get take-out from.
This ties into a general theory that I have (partially taken from @opinionhaver on Twitter) that modern society suffers from way too much optimization -- in sports, in relationships, in the economy.
Yes, exactly. A little coupon clipping around the margins is fine. But when you get into a retailer-vs.-consumer optimization arms race, the firms don't end up capturing much additional surplus, and most of the consumer surplus is nuked away in the form of wasted time.
And also the lowest tiers of product have been removed. The minimum standard for so many things is way above what is needed. So there is no SRO for cheap living. The cheapest computers are way overkill for most people's needs. Your internet and phone service is going up in speed and price even when it is now way to much.
Housing, sure, but I'm not following you on the others. You can get a serviceable used computer for $100. (And probably for free if you're willing to dumpster dive and mix and match parts - though if you have the skills to do that, you probably value your time at more than that). Mint Mobile is $15/month. Home broadband can be found for like $30/month, which is barely more in nominal terms than what my family paid for AOL dial-up in 1998.
Maybe it's true that the "default" big brand is a bit more inclined to upsell you than in the past. But it's not at all hard to find cheap options.
I think it's even more real than people hating that shit. The people most concerned with affordability are specifically the people who are in the middle class and struggling to budget for a family. These things make people prioritize things like stable housing, job security, location/community, seniority linked benefits, etc, etc. They don't have the flexibility to drag their families around chasing better pay. And dramatic price increases put incredible strain on this kind of household budgeting.
It strikes me that this is a type of scope creep where getting a good job now entails more and more effort outside of the job itself which is a burden on precious time. It feels much harder to turn off outside of work especially with job hunting (spoken as someone who was job hunting not so long ago)
As a personal anecdote, this is absolutely true - since 2020, I've been internally promoted once and I've received several above-average performance reviews. My salary, when adjusted for inflation, is basically the same as it was in 2020, while the cost of food, housing, and car insurance has gone up 20-40%. I'm still doing well financially, but it does absolutely feel like I'm working really hard and getting nowhere as a result. In talking with my coworkers, the ones that haven't changed jobs since the pandemic are in the same boat, and most all of them are quietly very frustrated about it.
I think this dynamic is a bigger deal than people realize. For those willing to assume bigger risks, change jobs, and move for jobs, they do better economically overall. But people who want to stay loyal to an employer and remain rooted in their community will comparatively lose. This is going to exacerbate the cosmopolitan vs localist divide, and feed into divisive national politics in a big way.
Also, it's not like the interview process at most employers is particularly optimized to find the best possible match for the role. See Cartoons Hate Her on being a terrible employee but a great interview, and a lot of people are in the opposite boat. They are disadvantaged by the current economy.
And this must not be true in many industries but in my industry when we’re reviewing resumes and see that someone has changed jobs every 1-3 years, it’s still seen as a red flag. It makes a person seem uncommitted and/or unreliable.
I’m don’t mean any offense at you personally but any time I see someone say this I immediately flag them as a boomer who has no idea what the job market is like
Very end of Gen X. I think it may just be that this is seen differently in different industries. If I wanted someone for a year or less, I’d just hire a contractor.
I should have dressed up for Halloween as a Nissan Altima with a missing bumper cover, a busted-out rear window covered with a trash bag, and Virginia plates - there is nothing scarier in the city of Baltimore...
I have seen a smoking Altima on Aliceanna. I have also seen one without a front wheel driving down President. Just the rim, sparks, and burning asphalt.
“Sir, we are going to impound your car and you are sentenced to corporal punishment from a Catholic nun with a yard stick.”
You don't get to adjust your salary for inflation, while comparing with increased nominal costs. Either compare real salary to real costs, or compare nominal salary to nominal costs. You're doing an apples to oranges comparison.
1) I had a major health crisis in 2020 that, once it was over, required strict surveillance for several years in case it came back. I was loath to change employers because I was afraid of losing access to the doctors & relationships I had built up in 2020 and 2021.
2) I was working on an advanced degree that my employer was paying for, and their requirement was that I reimburse them for the cost of the degree if I left within two years of finishing it.
3) I work in a fairly niche field, and most comparable jobs would have required relocating to cities with a much higher COL (Boston, Washington DC, Seattle, southern California, etc). While I'd have probably received a pretty great raise if I moved, I did some math on COL differences, and I'm not convinced that my standard of living would have grown commensurately.
1. Fear of the unknown. Changing jobs requires a bit of a leap of faith that your manager, responsibilities and coworkers are all going to be fine. If those things are fine at your current job, you may not want to risk a new job being worse than what you're currently doing.
2. Benefits. I have fantastic benefits at my current company. Many other companies have the same benefits on paper, but I've found out that people get punished for using them through the grapevine (ie, people who take parental leave end up on the slow track for promotions).
3. Job hunting is a pain. Job seekers have to send out so many applications just to get an interview nowadays. There's also the expectation that you have to tailor your resume to get through the ATSes that everyone uses, and that is a huge pain to go through only to usually get no acknowledgement.
"Everything in this inflationary economy is going up in price, except me".
I agree that a more relevant metric than median household income is what percentage of households' income grew slower than inflation over the last 3 years versus higher than inflation? That's potentially a better explanation for the affordability crisis than "vibes", if that number has grown significantly.
1) distributional effects- if 1/3 had flat (nominal) wages, 1/3 matched inflation, 1/3 beat inflation (by more than the inflation rate) it would mean median wage was keeping pace and the average would be going up. However, despite 2/3 of people doing the same or better, it would feel like 2/3 of doing the same or worse (also true)
Which combine with 2) the basket of goods show some high spikes, that look and sometimes are worse. For example, if food costs 1.5x more, and it is 20% of your pre-inflation spend. Your overall spending has only gone up 7%, which might be mitigated by a wage increase (spread out over a couple years). Yet mathematically, a 7% gain doesn’t feel like a 50% gain! Even if it is balanced out by other items getting cheaper in real terms.
This second factor makes even those with increased incomes feel robbed. You combine that with those that genuinely did not see income increase - everyone is pissed.
Here knowing Median and Mode - my recollection from looking at such data last year is the there's signficant distribution so averages - median - are quite deceptive - both as being national and as disguising important income-level variations (also that one needs to understand different consumption basket weighting - the macro aggregate is a useful thing BUT like all tools it has its limitations that bleed into visibility in political sense like now)
It would be interesting to create @Wallace’s “accessibility vibe” stat like the “percentage of households' income grew slower than inflation over the last 3 years versus higher than inflation” on a Congressional District-by-District basis. I bet @Matt could do that in his sleep.
I also bet it would tell us that urbanites are getting screwed so Trump couldn’t care less
Median wage rising faster than inflation is compatible with a lot of different distributions. It could be that everyone’s wage rose 1% more than inflation. It could be that half of people’s wages rose faster and half rose slower. And it could be that it’s the poor half that rose faster while the rich half rose slower, or that the rich half rose faster while the poor half rose slower! It could even be that the top 40% and the bottom 40% both rose slower while the middle 20% rose faster. So many possibilities.
(But most likely it’s close to the first - a strong majority of people rose slightly faster.)
It seems like this topic could have a week of deep dive coverage as it's kinda endlessly fascinating. I think "people hate nominal price increases" is a compelling part of it, as is the relative price shifts between goods and child care; and the general lack of human well-being associated with cheaper streaming vs. child care.
But it also seems that there's not a situation where Americans would say "ok, things are affordable now", until you had a truly post-scarcity society. People will just keep adjusting their expectations. A lot people in their 20s today wouldn't dream of having a child until they have a separate bedroom for them in a house they own, and are ready to contribute $1000 a month to the college fund and other $1200 to the traveling soccer team. People in the hallowed 50s often had a family of five or six sharing a one bathroom, 1100 SQ ft tract house, and entertainment was "go throw rocks at the cranky old lady's mail box".
Part of the problem with this comparison though is where are the 1100 sq foot homes to live in? "Starter homes" were plentiful in the '50s, and you could easily buy one on an entry-level salary. Many cities nowadays won't let you build homes that small because of minimum square footage requirements. So if you want a cheap, 1100 square foot house, it's probably not actually cheap because new ones haven't been built in the last 50 years.
Because for the most part in most cities, apartments are for rent, not for buying. The problem is basically that it is difficult to get on the homeownership ladder.
A typical pattern in the 50s was to buy a starter home, have a kid or two in that starter home, and then when the kids got bigger and you might want to give them more space, you could add rooms onto your starter home or sell it and get a bigger place. This was better for most families than the current pattern, which is to rent a series of small apartments while saving for a down payment on the house that's big enough for the teenagers. The reason that people do this pattern nowadays is that for the most part, small cheap houses are pretty scarce.
The suggestion is that whatever you already live in is good enough.
The size of my 1100sqft loft seems like it would be fine for one kid, but it'd be pretty hard to put a baby or toddler down to sleep while the adults are still up and about in the same (giant) room. I'm going to insist on at least having separate spaces. But the combination of bedrooms requiring windows and multi-family structures requiring two staircases makes separate spaces very hard to come by in apartment/condo buildings.
I agree, and yet pretty much every generation before ours raised children in considerably more difficult circumstances. We just keep adjusting our expectations. It's not a bad thing but it is a political reality: everyone will be disappointed with the status quo, always.
The literal same structures I want and can't have were occupied by working and middle class people for like 100 of the last 115 years. I get that I'm incomparably wealthier than them in terms of consumer products and leisure experiences, but that's a big one.
> But it also seems that there's not a situation where Americans would say "ok, things are affordable now", until you had a truly post-scarcity society. People will just keep adjusting their expectations.
I recently had a related conversation with some people in Vietnam complaining about the cost of living. They have similar housing issues (slightly different root cause but same end result of extremely high prices) but also real incomes have increased substantially (real GDP per capita has doubled since 2010) and people still act like everyone is just "getting by". Okay but now they have iphones instead of Nokias. They drive cars or Honda SH instead of a Honda Cup. They drink coffee from espresso machines instead of ca phe vot made from a sock. They buy new clothes from Shein on the regular, instead of the daggy stuff from the local market. Consumer credit is now a thing (it wasn't 10 years ago when I first moved there) so lots of stuff in now paid via installment plans. Air conditioning was non-existent in homes outside of foreigners or the wealthy but is becoming more common (usually just a bedroom, not the whole house).
You're right expectations just keep going up. Which is good? But I guess I'm old enough now that I get frustrated about people whining that life is so tough when I used to walk to school uphill both ways in the snow barefoot.....
I think the main thing is being able to afford a home. I know my wife and I refused to have kids when we got married 20 years ago until we were in a home.
We struggled for a bit renting and then finally moved in with my parents for 2+ years so we could save up and get in one. But still we wouldn't have been able to do it except there was a brief period of home pricing sanity, we bought in 2010.
A couple of years later we would have been priced out of the market forever. And note I'm not talking about McMansions here. I'm talking about 1960's starter track homes that need some TLC
Yeah I think this is a big part but kinda to my point, "a home" means something different than it did 50 years ago. People won't compromise on what they think the baseline is in terms of square feet, number of bathrooms, or location.
While I don’t disagree that affordability is directly linked to inflation, I tie this more to the perceived affordability of large purchases as you grow through life. Most people‘s first big purchase is a car, then it could be a house, then it could be paying for kids college. Depending on where you are in life, these coming expenses become a huge part of your spending and seeing the sticker prices on some of these items can cause quite a shock. To me affordability is about being able to make these larger purchases while not losing the ability to continue living your current lifestyle at the time of the purchase. The sticker price of these items always seems to go up, and seemingly faster than any other price.
Even beyond the sticker price, I was shopping for a car recently and felt that even though the sticker price wasn’t up by that much the actual price paid was dramatically higher because dealers were not throwing in any discounts or freebies like they used to but were instead charging for things. Actual prices seem to have gone up more than sticker prices and this may be a cause of hard-to-measure hidden inflation as well (not only for cars but also things like Costco, where discounts seem a lot less frequent even compared to last year).
The old rule of them was to not spend more than a quarter of your income on housing, which you could do through the 90s. Now I hear it's half your income and some are paying even more. That may be at the root of a lot of the money worries, even if you had a low interest rate mortgage you still paid a much higher cost for a house in the last 20-25 years.
IMHO, that's by far the biggest thing. The average home cost 2.2x the average income in 1950. That would translate into an average home price of $180k today.
At those prices there would be plenty of money leftover for everything else.
I do think consumer anger is in response to increased prices on day-to-day household goods. However, I suspect you are right that the big purchases play a critical role, in particular a psychological one. Seeing inflation at the grocery store feels very different if it happens in the context of being nervous about housing costs or college costs or childcare costs. Each increase in price on a minor purchase can then trigger that larger anxiety.
I think an underrated factor is the explosion of cheap, less durable, often low-quality consumer goods over the past half century. Buying lots of bargain-basement stuff all the time is how Americans live their lives. There are some real material positives that come with that (also some real negatives, I’d argue, materially and not) but it does skew how people absorb price increases? When you expect to be buying new things constantly, a modest rise in prices feels like the horn of plenty has dried up.
Cars are dramatically cheaper than they used to be. As an example a 1995 Honda Accord EX-L was $26k that's $53k today. The actual current price is $34,490.
A lot of things can be true at the same time. I agree that the average American is better off today than any other year ever and much better than the average person in other developed nations. I agree that when we adjust prices with incomes that actual affordability has tended to improve most years.
But we still get pissed off when prices go up. They just seem too high. Day care, health insurance, rent, any kind of home or car service.
Perversely, the things that will (and clearly did) help keep prices from rising are more immigrants and more outsourcing production overseas. Between the 1990s and 2020, I was always amazed that prices on clothes and electronics seemed to never go up at all. It was great. Of course these create new sets of problems.
Not sure which part of my comment you disagree with… the part where I said things are on average getting better, or the part where I said we can still get pissed off when things (like house prices) get worse?
My point is that whether things are getting better really depends on your situation. If you are already in a home you can afford then a lot of things are looking good. In fact, you are probably ahead because inflation reduced the value of your mortgage.
One of the ways people kept up with inflation in 2022-2024 was by changing jobs. That definitely feels more like your own effort than something you're going to credit to Bidenomics. It also probably for many people came with trade offs like longer commutes, more responsibility or hours.
My family is in exactly this situation, it's overall fine but it's not something we're doing victory laps over.
Yeah. My workplace has been giving out a standard raise of 2% per year, which is a real wage decrease. So if you want an increase you need to leave. Talking to friends it seems this is fairly normal.
Unemployment is low in part because inflation allows companies to decrease the wage bill without firing.
I just go to the grocery store and marvel. It's like every price is made up. That box of cereal costs how much? Are you sure? I remember when it was much less. At this store. Not that long ago. Am I being punked? It's a really strange experience. Soon bananas actually will be $10.
“I just paid $7.50 for an iced coffee. I’m at an age where I can no longer tell whether this is just a normal inflation adjusted price or I’m being extremely ripped off. Pricing is psychedelic to me now. I just give them the money they ask for and try not to think about it.”
Yeah it's honestly wild out there. I also sometimes wonder if businesses are better at pricing? Like before they might not have known the coffee shop in the next town over is charging more but now everyone can tell what everyone else is charging
It's especially weird for infrequent purchases. My deodorant was on sale in 2021 so I bought six at ~$4 a pop. Finally this year I run out and now they're $9?
I still bought some because what else am I supposed to do, stink? Still hurts though.
I wonder if it has to do with 12 years being long enough to move from one phase of life to another. If you go from 25 and single to married with kids at 37 it's harder to compare. Or to go from 37-49 and the kids are out of the house. 5 years is harder because your life phase is the same.
There's definitely a thing about just getting older and inflation being constant. I remember my grandparents talking about how things cost 5 cents back in their day and just rolling my eyes. But it hits a little different when it's actually you who can remember that things used to be dramatically cheaper.
For me, I think it's that I still remember the prices for many things from 2008, so while I thought some things were expensive in 2019, now I look at them and some of the numbers just don't compute.
Thanks for (perhaps accidentally?) answering my mailbag question, which was basically "is there a steelman case that 'affordability' is a useful and distinct economic concept?"
But this feels a bit more weak man than steelman to me. I'd think that before concluding that the "affordability crisis" is just everyone is being irrational, we'd want to (1) establish who, exactly, is angry about "affordability," and (2) address measurement issues, e.g., whether the real incomes of these angry people actually increased, taking into account that their consumption baskets might be different from the average.
A (non-exhaustive) list of points one could investigate.
1. It's actually not so clear that the *median change in real incomes* was positive during Biden's term. Note that this is a distinct measure from the *change in median real income*, and it's better suited to answer the question "did the median voter feel better off"?
During Biden's term, the median change in real income post taxes and transfers was actually negative, see here:
(Overall, this is a much better and more nuanced analysis than I've seen from generalist Substackers.)
2. We know most wage gains during inflationary periods accrue to those who change jobs or actively negotiate. What if these are costly actions for workers? Then people might be justifiably frustrated by inflation even if they end up consuming more, see here:
3. Much of the discussion of "affordability" is motivated by the conjecture that voters *swung* due to cost of living issues. Isn't it plausible that the most disgruntled voters (and therefore, those most likely to swing) would've disproportionately been those who experienced decreases in real income?
The most obvious miss from the economist-brained is the timing of inflation and wage increases. If price double on January 1st (100% inflation) and I don't get my salary adjusted until January 1st next year, I've spent the entire year destitute. No one's out here negotiating their salary daily based on yesterday's CPI change.
I think the excerpt Matt includes about the "Bach party" is really relevant, because it gets at what really matters to most people: "How much money do I need to not feel like a loser? Will I not be able to spend enough and have to miss out on spending time with friends? Will my partner lose attraction to me? Will my kids wish they had different parents?" Whether you feel like a loser is determined by your social circle, so it's very possible for your income to go up, and still feel like a loser if your peers' incomes increase more. Cultural factors such as social media and advertising can also make materially comfortable people feel like losers.
Social media is the real culprit here - 15 years ago you (or your spouse, which can be even worse) didn't see the Italian villa vacation pics from your high school frenemy.
There's also the financial optimization of pretty much all kinds of events - every concert or festival has a VIP section now, and often multiple VIP level tiers. When you're already spending hundreds to get in the door, seeing other people get additional perks feels like a slap in the face.
Agreed and airlines is an even better example; ten years ago you could be pleasantly surprised that your seat was in an emergency exit / on the bulkhead. Now you're definitely paying for it.
Per my memory of Zack Carter’s biography of JM Keynes, the is the same dynamic that felled multiple British governments during the 1920s. Of course, their solution to the nominal price issue was to try to reinstate the gold standard, which, while narrowly effective, had the same negative economy-wide impacts you’d expect.
A lot of the big political fights here in the US of A in the 19th century were also over whether we should have inflation or deflation — though they were not phrased that way. Gold standard vs bimetalism (and free silver vs not within the bi mentalists) and the more communism inflected folks calling for paper money etc.
The main explanation is simpler: house prices and interest rates aren’t counted as part of the official inflation statistic but are extremely important to the actual level of inflation people face because housing and mortgages are most people’s biggest expense. This means that the actual inflation rate faced by non-homeowners (or homeowners looking to upgrade) is significantly higher than the official statistics and corresponding actual real incomes are lower. This is also true for people who finance cars or consumption via credit cards.
Yes, but I disagree that OER is really the same as home prices.
"Owned housing units themselves are not priced in the CPI Housing Survey. Like most other nations' economic statistics programs, the CPI program views owned housing units as capital (or investment) goods distinct from the shelter service they provide, and therefore not as consumption goods. Spending to purchase and improve houses and other housing units is treated as investment and not consumption in the CPI. Interest costs (such as mortgage interest), property taxes, real estate fees, most maintenance, and all improvement costs are part of the cost of the capital good and are also not treated as consumption items. These non-consumption costs of owned housing are out of scope for the CPI under the cost-of-living framework that guides the index."
Well, there's not actually any mechanical reason why increases in inflation have to produce a corresponding increase in interest rates. If the real cost of money hasn't changed, you could in principle pay the same rate, pay the same amount in real terms, and pay off the loan at the same time as before. It's just that this would involve your nominal debt, and nominal payments, increasing for a while, and because most people don't understand inflation this would cause them to explode in paroxysms of rage.
(Australia saw exactly this with it's government student loan program. The debt is repaid based on income, and indexed to inflation, so when nominal inflation exceeded the repayment rate for some people it caused a backlash of totally irrational outrage about how their debt was going "up" even though they made payments on it)
I think the actual answer is that affordability isn't really about anything in particular at all. Instead people are mad about the economy in general and have been since the financial crisis, and "affordability" is how that's currently expressed.
In that case isn't it about social media having a tremendous negativity bias? If you write an accurate story about how things are great and people are doing well - you get zero clicks.
I think a decent amount of people thought pre-covid economy was pretty good (usual welfare state is inadequate and why are we giving tax breaks to wealthy issues)
I'm anecdoting hard here, but my recollection was economy was good (we're out of the great recession) and it didn't have the same valence of everything sucks.
If you focus heavily on de industrialization as a concept maybe it was still everything sucks (but did the modal person have hope in Trump on this front if we grant more rural populations are now Republicans)?
I think we need more research as to what people are unhappy about. But I think relentless optimization on every side (of work hours and deals and job applications and social media and everything else) is a big part of it. That and housing costs.
Of course there all a whole bunch of problems in the way we count inflation. The number has been changed over the decades to make it look lower to keep down government payments
Ok, real median household income might have reached an all-time high. But what the author has failed to note is the amount of Americans living paycheck to paycheck.
After maxing out my 401(k) and paying down extra principal on my mortgage, there’s nothing left at the end of the month. It’s hard out here for us who are struggling!
Have you ever had to actually worry about making ends meet? It's not funny if you have.
I have when I was younger, and it’s quite stressful! I’m not poking fun at people who are struggling, I’m poking fun at people who think that a majority of Americans live paycheck to paycheck.
You should visit some towns where most people are on fixed incomes.
If you're from America and alive today you've already one of the luckiest people in human history.
That may be true. But when my Buy Nothing group is mainly requests for food since SNAP was paused, it certainly doesn't feel that way. Psychologically, it probably feels worse because many people around you own cars, buy new clothes, and go on vacation, whereas in another place or time, you were less likely to have lots of contact with lots of people living the good life.
Fixed incomes like SS that adjust for inflation? To what fixed income are you referring?
Social security is up 34% since 2019 and the price of a Chipotle chicken burrito is up 44%, just as an example.
I just came from a small town in NM with basically no real industry, and the diner in town has faced food and labor increases beyond what they can ask their (mostly retiree) customer base to pay, so they’re trying desperately to keep prices low and not go out of business.
What does"fixed income" mean. Wouldn't most of us love to be on a fixed income?
It's this "oh the poor boomers only get a guaranteed check that increases with inflation (aka NOT FIXED) " unlike the rest of us who can lose jobs at any time... (Not fixed in the opposite direction)
It's like how Johnny Sack has no choice but to postpone his Italy trip while construction rackets are shut down https://www.youtube.com/watch?v=41XlLeV7k9o he's living pay check to pay check! Who's gonna keep Ginny in candy bars and Nordstroms clothes!
K hon
But they do so what is so funny about that? I would laugh at people who try and make people think Americans aren't living paycheck to paycheck. Although I can't imagine what someone's motivation might be for such amoral deception. https://www.newsweek.com/americans-living-paycheck-to-paycheck-soars-goldman-sachs-10834306
That article doesn’t show what you think. The only increase mentioned in that article is an increase in the survey response of low savings since 1997. The only more recent comparisons actually show people feeling *less* willing to say they live “paycheck to paycheck” in surveys over the past few years (regardless of what that survey response actually means).
You need actual numbers on people whose savings are increasing or decreasing to say that people are living paycheck-to-paycheck, if you want that concept to mean anything different from “consumer confidence”.
I often find Allan's comments to be a little hard-edged but I really do not understand the objection here. He's clearly not ripping on/making light of people with real financial struggles, but rather people who are doing fine but feel like they're struggling
I could *sort of* defend someone saying this with a straight face for the 401k part. Like, most people should be saving ~15% for retirement, and if your 401k max isn't more than that, not being able to meet retirement standards and have anything left over is a bit concerning.
For principal payments, not so much.
I've always lived paycheck to paycheck. First I get one paycheck, and then another. Never two at the same time. I guess dying in between payroll periods is one way not to live paycheck to paycheck, but at that point one has bigger concerns. Unless it happens at work, and then maybe it's worker's comp...? This is what I find so inspiring about the story of Hanukkah, with the miracle of moolah lasting eight days after Pharaoh cancelled SNAP benefits. Let my people go to the grocery store!
Very valid point. Even at times when I’ve had multiple jobs, their paychecks were generally not on the same day, and even when they were, there'd always be some measurable interval of time between when they hit my account, probably because they used different payroll providers with ACH batches handled at different times. There’s just no escaping!
Not me. I get direct deposits.
The closest I can come to steelmanning the inflation/affordability narrative (either under Biden or now) is that:
1. People get raises due to a) relatively predictable but low annual increases b) regional or industry-wide increased demand for specific types of labor c) personal circumstances like promotions, bonuses, and changing employers or industries
2. In a low-inflation environment, a) is usually enough to make sure that few people fall behind in real terms, even if b) or c) don’t apply to them
3. In a high inflation environment, a) doesn’t work. Overall wages may keep pace with or surpass inflation, as clearly has happened in recent years. But because b) and c) are inconsistent, some sizable percentage of people will fall behind in real terms.
4. Is it plausible, then, that 20% or so of people are worse off than in 2019? I think so. That doesn’t mean that “most people are struggling,” but it does mean that most people probably know someone who is. While social media doomerism doesn’t help, there is some reality to the narrative.
I think you could even go stronger, and say that requiring people to change their jobs in order to maintain the same inflation-adjusted pay (instead of just getting yearly raises at the same job) is an imposed cost that people prefer not to pay.
There's a real disconnect between what affluent guys think is going on in the country economically and what real people feel in their wallet every day, and Matt's post here is just the icing on that cake.
>...what real people feel in their wallet every day...<
Both affluent and non-affluent people are real. What's got your goat is that the available statistical information doesn't comport with your preconceptions.
I upvoted, but Blooming has a point that people are stubbornly ignoring. Aggregate statistics hide uneven distribution of benefits, and it isn't clear that the benefits actually make a difference, even if number is going up.
I wish I lived in a world where we were trying to collect more accurate distributional statistics. The world we actually live in is the president firing the head of BLS because the numbers make him mad.
If the commenter wants to make a "things are worse than they appear" case, he or she should provide some data. But all we get are anecdotes and snark.
Yeah, stats show it all, for sure.
If it’s obvious to you that the economy is worse than the statistics show, it’s not obvious to everyone. Why not share your argument instead of just snarking and treating it as self evident?
The top 10% of consumers account for 50% of consumer spending.
Having trouble finding the thread debunking that statistic, but you should look into the methodology. It does not directly capture consumer spending. It makes inferences about total incomes and expected savings rates and assumes what’s left is spent. It is not corroborated by other estimates.
Edit, found it, from a Berkeley economist who is much more qualified to opine on the flaws of the methodology: https://x.com/levyantoine/status/1985127826207772920?s=46
Is that more or less than it was in 2021 or 2012 or 2007 or 1996 or 1987 or 1973 or 1967 or 1950 or 1936?
You're suggesting the anecdotes of a random, anonymous person on the internet have greater explanatory power than statistical information drawn from millions of data points?
I don't think anyone believes the economy is perfect. But on the narrow question of "are real wages declining or increasing" I'm gonna go with the statistics. Your mileage apparently varies.
It's not even anecdotes! It's hypothetical anecdotes!
You've heard of fake data, but have you heard of fake ANECDATA???
lol
A lot of commentators on here are clearly happy to be right on the statistics but lose elections. Have fun with that!
There are a lot of people here who think they're the smartest guys in the room, like Ken Lay and Jeff Skillings, lol.
Maybe they are ... But elections aren't decided by the smartest people in the room.
K hon
Stop that.
No, actually I would say he's quite correctly - me as an actual proper economist by training although a financial investment one - highlighting a reality that aggregate statistical information while useful can also for the naive and above all the partisan consumer be quite deceptive.
The aggregate national averages - whether total aggregate or even partially decomposed can and do hide significant variability (and equally hide important differences - this is not to say aggregates are bad, but all tools have their limits, and one should have an awareness of limits).
That data is of course primary but if one falls into fallacies of composition and over-reifies aggregates, one can get politics (and even micro-economic0 effects really terribly wrong.
Which the Democrats & their comparatively affluent professional class partisans have been doing now for about 4 years...
The argument isn’t about whether or not aggregates give us a complete picture. Of course they don’t. In the long post-war boom, wages at the median in America were rising. That indicates increasing prosperity and (critically) widely-shared gains. But even then there were obviously some who weren’t benefiting. That’s always been the case. But the OP seems to have a problem with statistical information itself. Which is problematic. And moreover doesn’t back up their contentions with anything more than anecdotes. Which is even more problematic.
The question is not whether non-affluent people face difficulties, but how their situation compares in relative terms to what it's been historically. Non-affluent people always face some difficulties in life (pretty much by definition) but those difficulties are not unusually bad at this moment compared to the past.
Exactly. There have ALWAYS been people who are doing less well than most (and there always will). Are such folks more common (or doing worse compared to the median) than in past eras of moderate inflation/low unemployment? Maybe! But you can't really make that case via non-supported anecdata and "k hons."
Well if one is doing an economic paper that is the question.
If one is doing a political reaction analysis the question is rather if their **perception** of recent change is such that they see themselves falling back, losing comparatively.
Ample political science have highlighted revolutions align not with simple poverty and oppression but more with periods of improvement followed by a falling back on improvement.
Humans chimp band fundamental mentality feels recent losses and above all compartive losses to others much more than abstract math would weight.
The elite tells me that the earth revolves around the sun, but in my gut I feel that the sun revolves around the earth and I will vote for the guy who respects my gut feeling.
How so?
Because averages hide pain points. Median incomes may be up, but essentials—housing, food, insurance, childcare—rose much faster in nominal terms than most people’s paychecks. People don’t live in inflation-adjusted charts; they live in cash flow. When rent, groceries, and car repairs eat more of each paycheck, “real income gains” feel meaningless.
That isn't true. If I was able to prove it wasn't true, would you change you mind?
I would like to see what you would post to change his mind.
No. Because you can't prove it with charts and graphs.
So your beliefs are unfalsifiable? That must be comforting.
How could it be the case that those essentials rose faster than most people’s paychecks but that this can’t be shown statistically? That seems like the kind of claim that could ONLY be shown statistically!
You certainly can prove that (your words) "median incomes may be up, but essentials—housing, food, insurance, childcare—rose much faster in nominal terms than most people’s paychecks."
This is widely available information. What you got?
> Median incomes may be up, but essentials—housing, food, insurance, childcare—rose much faster in nominal terms than most people’s paychecks.
> you can't prove it with charts and graphs.
if "essentials" rose faster than paychecks, that would certainly show up in charts and graphs. you are just taking the piss, I think.
I think a better way to state what Late Blooming is possibly trying to get at is Falous's point (in another comment) that the charts and graphs we are using are not accurately capturing disproportionate impacts of certain types of cost increases.
I would note as I noted back in the Biden Days and Dem / Lefty Inflation Splaining / Inflation Denialism that structurally speaking there are some important consumption basket variances that overweight impact and stress lower-to-lower middle income wage earners which median data do not well capture.
Middle income to upper middle income (i.e. the Democrats now "core") face quite structurally different revenue constraints. And so Professional Class has a tendency to poo poo inflation impacts on psychological point for LI and LMI econ segments.
also the case that national aggregates are without doubt here deceptive.
All in all - the take away econometrically should be that for this kind of subject, national aggregates and national averages without close attention to the differing stress impacts on various income levels re inflation acceleration (change above all - people hate change)
This is part of why Biden Admin & Proggy Lecturing and Inflation Splaining was very dumb politics (even if the aggregates are at many levels correct and over time this equalises out).
I thought the data showed the exact opposite of what you're saying. That lower-income people did *better* under Biden than the median data showed, while upper middle income people did worse.
I think you're talking about different things. In terms of real income, poor people did better proportionally. But In terms of the impact of inflation, poor people spend higher fractions of their income on food and housing, both of which were particularly hard hit in 2022.
Before the pandemic I was listening to a money podcast and one of the hosts insisted that inflation was good for workers, especially working class voters because inflation would cause the value of their mortgage, car and student loan balances to go down and they could just ask their bosses for a raise to adjust for inflation. I have no doubt it made sense to her because she was a white collar worker who had a mortgage, student loans and a car loan and she could just ask her boss for a raise, but there are plenty of jobs where you're not going to get a raise if you ask and the company's COLA is below inflation, or you work at a company that's doing badly and is not going to be giving any COLAs or the company just doesn't do COLAs. People who aren't going to get an increase in their paychecks to compensate for inflation are going to be out of luck.
Right. "Poor" and "debtor" are only weakly correlated things. A working class person probably has car debt, and might have credit card debt, but it's small relative to their income. An early career professional could have 4x their income in mortgage and student loan debt.
Matt’s doubling down on the technocrat’s belief that aggregate, estimated statistical measures are facts and reality that people should pay attention to instead of their personal circumstances. The problem is aggregate national statistics have and hide a lot of churn and variability under the surface not only at the individual level, but also locally and regionally. They are good for looking at trends, but that’s it.
It’s the same tone-deaf response Democrats had before the election trying to lecture people about how the economy was actually good, seemingly unaware of that churn and variability. People aren’t a modeled statistical average in reality.
At the same time “living paycheck to paycheck” is not a rigorous term with a clear and measurable definition. I’ve known, for example, a few people who are upper-middle class over the years say they live paycheck-to-paycheck and while that is true in the moment in some hand-wavy sense, it’s entirely because they chose to chase a lifestyle they can’t afford.
In short, and maybe it exists, but we need something that isn’t so subjective to measure who is actually on the brink in paycheck-to-paycheck terms and how many there are now compared to the pre-inflation era.
This is what I suspect. I certainly believe the aggregate statistics accurately reflect the aggregates, and I don't doubt that a portion of the discontent is because people aren't accurately keeping track of all prices (just noticing the salient ones) and can't do the relevant math in their heads. But I seriously doubt that those two tell the whole story.
I came out fine, e.g.; I got a raise that was higher than inflation and the stuff I spend money on (think morgage) inflated less than average. So my disposeable income went up. I'm not the only one. To keep the averages in the middle, others had to go down.
I haven't seen the relevant data, and maybe they don't even exist, but I bet the individual level correlation between nominal income and nominal disposeable income went down substantially.
It doesn't have to be many people to turn a close election. Trump only won the popular vote by 1.5%. It is also worth considering that bond cupons and annuities are almost never indexed for inflation, and the elderly vote more reliably than anyone.
My family income has gone down, but it spiked during Covid, so not unexpected.
And costs varied quite a bit. We are lucky to have a mortgage we refinanced at the trough (2.25%), but our insurance costs have almost doubled, and about a 10-15% increase in food - and with two (and sometimes 3) teens in the house, we go through a lot.
Other people I know are about the same or have come out better. Anyone who has to move is having a hard time due to housing/mortgage costs.
So much depends on individual circumstances and location.
"Matt’s doubling down on the technocrat’s belief that aggregate, estimated statistical measures are facts and reality that people should pay attention to instead of their personal circumstances."
This would make sense but for the fact that, at least in the lead-up to the last election, people consistently rated their personal finances as being pretty good at the same time that they said the broader economy was in shambles. People would have been more positive about the economy if they had paid *more* attention to their personal circumstances, not less!
And when was the last century when THAT was not true of most people? Even if you are paying dow a mortgage and putting something into a 401k, does it not still "feel" like living paychek to paycheck?
One of my grand theories of everything is that people globally are just vastly richer than they were even 20-30 years ago. Things that were considered luxuries (Cabo Bach parties, week long trips to Disney, tours of Europe) are just so much more common. Add in social media and now everyone feels like they need to be making more to stay ahead to what “normal” is
My children are literally starving to death in the snow Ben, but which I mean they are mad that I won't pay $35,000 for a Bar Mitzvah bash.
"60% of all people!"
Are you kidding? It was 60% during Obama. After 5 years of Trump it must be 80%!
This is the fundamental problem with the Bernie/AOC wing. They keep talking about a problem that’s limited to a certain number of people. Even if they make progress on the overall economy, some people are still going to be in this situation. So, do you say that the mission has been accomplished or do you keep lying? If you keep lying, what did you achieve when you were in power?
Yglesias works for the same ruling class that was telling us how great Bidenomics were working and that if we were struggling there was something wrong with us.
You're paying a lot to hate-read this newsletter!
I can think of some others who do the same...
It's either hate-read or live in a bubble, regrettably. I am skeptical-to-opposed to many viewpoints here, but I subscribe to expose myself to what are hopefully the best arguments for positions I disagree with.
Damn those pesky facts.
I thought Biden got a raw deal from a whiny American electorate that was catastrophizing about what was on the whole a pretty good economic situation for them, but now that the whiny American electorate is catastrophizing about what is on the whole a pretty good economic situation for them under Trump, I'm much more forgiving.
If it's equal opportunity whining I can live with it.
Do you believe in counterfactuals? Matt certainly does, and his argument was always that the world where "Bidenomics" didn't happen was a lot worse off than the one that did.
We keep hearing about a K-shaped economy, which should be borne out in some of this data...
Mean vs median consumption may be behind some of the disconnect with Matt’s article vs some other things I’ve seen regarding the K shaped recovery and the tech industry employment crash — pretty sure I’ve seen a lot of coverage like this headline in the past 2 months, where higher higher-income spending offsets lower-income consumers tightening their belts and, in particular, experiencing a spike in debt default events:
https://www.reuters.com/business/us-firms-grapple-with-economic-divide-lower-income-struggles-mount-2025-10-24/
The author also forgot to adjust the charts for inflation too! If he did, he would clearly see real incomes are lower now than they were in the past. Unbelievably dishonest work!
"Unbelievably dishonest" is a rather harsh criticism. Especially when your basic claim is false: every chart in the post is showing real amounts (i.e., adjusted for inflation), not nominal amounts. And they are all explicitly labeled with the word "real".
So you're wrong about the economic facts, and you're also wrong about the morals of the author. One wonders how you might choose to respond to this turn of events.
No, everyone here knows the inflation-adjusted charts aren't actually adjusted for inflation. If they were really adjusted, then real incomes would definitely be lower than in the past. That's why so many people are living paycheck-to-paycheck these days.
So ... Poe's Law? https://en.wikipedia.org/wiki/Poe%27s_law
I used exclamation points!
So this was all a troll post all along?
This is a joke right? Because the survey that statistic is from is junk (it counts people saving for retirement and investing as living paycheck to paycheck.)
Ok, this article convinced me:
https://www.slowboring.com/p/this-economic-myth-needs-to-go-away
I'm as big a fan as Matthew Darling (the guy on twitter who really pushed hard against this pay check to pay check measure) as anyone. And I agree that the SHED measure gets abused by doomer leftists.
But I'd also consider taking a look at Matthew Bruenig's writeup about the topic:
https://www.peoplespolicyproject.org/2025/03/19/how-many-people-live-paycheck-to-paycheck/
I'm not a SHED believer, but more sympathetic towards the truth not being wholly monopolized by Darling.
I remember when this came out, will give it a reread today. I remember thinking at the time that this was fair, but also didn't prove what the Bernie crowd was really saying. 60% of Americans are not struggling to get by.
Oh, absolutely. That SHED paycheck stat, as used in partisan politics, is obviously incorrect. One thing I like about the Bruenig article is that it highlights the weird fuzziness and complexity of what "paycheck to paycheck" even means - even if he ends up closer to the 60% figure than I would.
60% of Americans between the ages of 18 and 40 probably are, though. The age breakdown would be interesting to see. Most people, when they think of whether statistics pass the smell test or not, think about their cohort. And I think it just continuously gets harder for people starting out their independent lives over time and has since the 50s
The thing about the argument that people are living "paycheck to paycheck" is it's never specified what we should do even if it were true. I think the fact that the savings rate is pretty stable over time suggests that there are structural and cultural reasons the savings rate is what it is, and changes in pay or the cost of goods will be absorbed into increases or decreases in consumption.
I also think Bruenig's super pedantic analysis about the days of pay your savings would cover misses a few things.
(1) Most people thinking about job loss would probably plan to receive unemployment insurance to cover about half of their earnings.
(2) If you are drawing on savings to cover expenses, that's money you've already paid taxes on. So for someone making ~75k, $8k in savings is probably worth like $12k of pre-tax income.
(3) You presumably were saving 5-10% of your income from your job.
(4) People who confront loss of income will reduce expenses. Some of this will be discretionary (less going out to eat) and some is just mechanical (we pay about $200/month per kid for after school care which is only necessary with 2 working parents).
Finally the analysis of that people "couldn't afford" the $2,000 expense is a bit odd... assuming you still have your income flow it sort of makes sense to have a hard line on how much you'll draw down your savings and borrow to cover a $2,000 expense that would put you below that line.
Right. The only way to seriously reduce the incidence of being "paycheck to paycheck" would be some rather intense paternalism. You have a job and no emergency fund? 20% of your paycheck is garnished towards a savings account that's illegal to withdraw while you're employed. You spent more than 5% of your income on non-essentials? Punitive excise tax.
The whole thing where we've converted dire material living conditions to something about "precarity" without any reflection is kind of odd if you think about it. Like the idea of this seems to be that people are concerned that if they lose their job they will be unable to maintain their living standard, but of course this is the case! Everyone builds their life around the income they have and if they were to lose that income it would be a big problem!
https://i.imgur.com/sqKDHrK.png
If demanding that your unemployed friends spend $800 on your bachelorette party weekend is now considered to be OK, then things are somehow even worse than I thought they were.
I'm a lot angrier than I should be that "Bach" is now a normal shorthand for "bachelorette party" (presumably also "bachelor party"?).
How many of us read that as the composer till we saw the full context?
Hand up. I was baffled as to why Bach was in play....
I thought Matt was setting up to share an article from 1730
"My Dear Sir,
I am cordially acquainted through the Art of the Pen with a Polish Lady of great Poſſeſſions. She hath recently become enamored with a certain Saxon Musician, himself appointed to the Poſition of Compoſer to that State's Court not but 2 Years prior. In recent Letters, she inſiſteth, that I travel to Saxony myself and attend upon the Hymns of this modern Aoede. Shall I forbear, ſhe hath ſtated in no uncertain Terms that our Friendſhip ſhall be at an End.
Unfortunately, I, Wife to a poor country Squire, can little afford overſeas Travel. Nor indeed, do I wiſh to risk my Perſon on ſuch Frivolity as ſhe ſuggesteth: for ſurely one can conclude from our moſt recent Contre-Temps around the Spanish Rock that the Peace ſo recently made at Vienna is fragile ſtill.
Am I fooliſh, to let ſuch Concerns diſſuade me? If not, is it poſſible for me to I explain to her that her Demands are unreaſonable while preſerving our Relationſhip?
Eagerly awaiting your advice,
Tethered to the Thames."
$800 tickets to Bach...no wonder no one listens to classical music anymore!
It's literally Baumol in action!
Raises hand
I assumed "bach" was shorthand for some kind of vacation destination. Perhaps some island I'd never heard of, like "St. Bachs"?
I did
Bach was a rager, unlike that lamewad Beethoven.
Bach was a natalist champion: 20 kids!
So you're saying he really knew how to work the organ?
His contribution only took a few minuets.
I sincerely thought that's what was being referred to at first.
Me too, hence my confusion!
Ain’t no party like a Bach party.
Bachanalia?
So what does that make Brahms?
Lullaby guy, he stays in!
I was *extremely* confused by that at first.
Also, yuck.
At first I thought her friend was upset she couldn't attend her concert.
I do like that it’s a gender neutral term! I suspect there’s a non-negligible number of people that are now inviting gay friends and even a few friends of the opposite sex.
I suppose, although since the term applies only to the party-haver, it shouldn't really matter in one sense.
But I guess I would be more willing to accept a gender-neutral "bach" than "bach" only applying to bachelorette parties, which would truly be the worst of all possible worlds.
Wait until you hear what a bach is in NZ :)
https://en.wikipedia.org/wiki/Bach_(New_Zealand)
I have a suspicion that the overlap between the audiences for Slow Boring and juicy wedding misbehavior might be low, but you see these sorts of stories all the freakin time on Reddit. Always questionable how true they are but... I've definitely known of some bachelor/bachelorette weekends that were WAY more than this. Remembering how little I was making in my 20s as a grad student and how I had to bail on these... fortunately my friends were understanding of that.
I…can’t believe this is a thing. Just have a wedding, spend your money on more sensible things and let your friends do the same.
If you've never been through it, you would be amazed at the scope of the wedding-industrial complex, which exists because people are *extremely* willing to pay for things because it's a wedding and supposedly a once-in-a-lifetime event.
Sure, but also because there’s all this new disposable income sloshing around the system! People have funny ideas about this stuff. Where is the money supposed to go if not into extravagant weddings (and “baches” and the rest)? If you don’t like it (and I don’t) then you have a problem with the moral arc of the universe tending towards the masses getting rich.
Some people get into a temporarily-crazy mindset where wedding-related costs become giffen goods: the high price is the point! If you're not spending a lot, then how do you know you're doing everything you can?
I’m an old married lady but I had no dreams of a perfect wedding. My mother did all the work so as to have the wedding she had wanted but didn’t get. I was living in a different part of the country and mostly just showed up. My expectations of the event were *very* low but (probably for that reason) I ended up having a good time.
We got married at the court house and then I suggested to my parents they could cut me a nice check since I'd just saved them so much money. They did. (They had plenty, it wasn't an imposition.)
Ever the romantic, that's me.
Yeah, since we spent very little eloping, my mom helped us with our house down payment
Wise woman!
Yeah, we eloped to DC when the federal government decided to recognize gay marriages performed in the places that allowed them, pre-Obergefell. No big wedding here, just signing the paperwork at a Starbucks and walking down to the courthouse. A high school friend that works at EPA walked over on her lunch break to be a witness.
Not that I think that’s the ideal way, weddings are fun, but it worked for us.
Back in my day the ladies and the gentlemen each had an event that culminated in joining up for a few hours of bowling/drinking. All on the Thursday evening before the Saturday afternoon wedding. I’d guess that the total for everyone, ie food and drinks for 30 people, might have totaled $800.
And the fact that social media means you're not just creating memories for yourself. The expectation is to have an Instagram worthy event.
I spent too much on my wedding. I got yelled at so much for pointing out costs and trade offs, only for my wife to agree with me after the fact.
Now my sister in law’s wedding is going to be even more expensive….
I got married young, and we had a very small wedding with only immediate family then lunch ina nice restaurant. I thought I would regret it, but I never have, and I stress to my kids that I would be perfectly ok with them eloping.
Or the opposite. Get married at city hall and then have a joint bachelor and bachelorette party.
The arms race factor is out of control.
I’m of the opposite view. As the post details, there’s all this new disposable income sloshing around. What else are you gonna spend it on if not your “bach”? Spending $4k on your bach is equivalent to, what, a single house payment? So it’s not actually going to make a dent in your long-term savings as long as it’s a one-time thing.
My objection is that the sorts of things one spends on to achieve a $4k bachelorette party reflect tastes that don’t exactly scream refined.
Or 1/3 or 1/6 of a house payment for Bay Area folk.
But spending $50k or more on a wedding is a good chunk of a down payment on a house
Yeah, and then you have to ask whether you’d rather delay your home purchase a year so you can save an extra $25k, or you’d rather have a wedding that is significantly less picturesque and less customized. I can absolutely see many people who are not being irrational in choosing the former, as much as I’m a cold heartless economist like all SlowBorers. And this calculus gets pretty lopsided once we’re talking Bay Area or NY house down payments.
Maybe, though I would argue you can still have a really nice wedding for less.
When we got married the average cost of a wedding was $25k in our area, we did it for about $12k and it was still really nice. It was still probably 100ish people, with a nice BBQ dinner.
If it’s just one person spending $4k, that’s one thing. But if each attendee is spending a similar amount, then you’re no longer doing it once, but a bunch of times during your 20s.
I think making attendance at a pricey bachelorette party being a condition of continued friendship is crazy bridezilla behavior (especially the manipulative complaining that of this woman doesn’t go, everyone else has to pay more).
However, a big wedding can be super fun and it’s the one of two opportunities all of your friends and family get together in one place. The other likely being your funeral - and that’s likely less enjoyable for you.
I am sceptical about ragebait things posted on Reddit, I think quite a lot are just fake.
No one buys novels anymore, Reddit posts are the main outlet for creative fiction writers these days.
They're good fiction, though. And the comments are fun.
Kayfabe, but for gossipers.
Reality TV for wordcels
Maybe not! The wife and I self-funded our wedding and were quite frugal about the whole thing. Everyone had a great time and still speak fondly of the wedding years and years later. My sister’s wedding cost $100k (of my parents money, of course) and she was stressed the whole time, says she regrets the whole thing (okay, not the actual marriage but the fancy destination venue and all the crazy stuff she had everyone running around doing).
There were quails at my wedding. It was funny, they just popped in at the end.
Better than being dive bombed by blue jays at the altar, I suppose, but less funny
Yglesias is on the case:
https://www.vox.com/2014/7/25/5884435/wedding-planning-tips-from-economics
My grad student-turned-postdoc gets invited to a handful of these (plus weddings) every summer. The most recent one in Sept. was in Italy! I keep telling her she doesn't have to go, but social etiquette demands it, apparently.
This kind of “social etiquette” makes me glad to be old (sitting on the big pile of money I have saved over the years by not spending on stupid stuff like this—planning your own vacation is great, spending money you’re not making to maintain agreeableness is, IMO, unwise).
Yeah, Italy would be a deal-breaker, but i enjoyed going to my college friends’ weddings around the country during that season of my life. All of those people are still friends, and part of the reason why is taking the time, energy, and money to show up. But it wasn’t crazy money as the destinations were all in the US
I wondered the same thing, but now I've been in the thick of wedding season for a few years and absolutely bonkers shit happens pretty regularly.
A few weeks ago I had a friend invited to a wedding just outside a rural national park where the bride found lodging for half the guests and asked the other half to find their own and bring their own food and stoves for 3 days 💀
I presume the couple has half as many friends now
$800 is an extremely cheap bachelorette party.
A friend of mine went to a fancy private high school for free back in the day because his mother was a teacher there. Fast forward 30 years and his old school chums are wealthy tech bros and whatnot. The weddings, bachelor parties, and other destination guys-only vacays he gets invited to are outrageous I hear.
I'm just imagining Matt casually reading Wedding Etiquette posts between NBER papers to come up with this example.
People don’t plan their leisure around impecunious friends. It will always be socially awkward to have less money than your friends.
If it’s obvious you have a friend that can’t afford it, it’s really on you to subtly cover some of their costs so that they’re not stretched, or if necessary reach out and let them know you’re doing that, or if none of that is an option just plan a different party.
Maybe I'm just a fancy upper middle class person as I didn't really get mad about this. Like I wouldn't do something that expensive, and if my friend needed an accomodations I'd certainly make it.
But $800 is just kinda the price of a big, fun, indulgent weekend. It's not exactly billionaire money. You consider a couple nights of reasonable hotel room, some gas, a couple of nice meals, an evening out at a some kind of event, and a few drinks, that's $800. This is a number that's less than a week of take home pay for the median person.
FWIW, the $800 was just for her portion of the vacation rental; total costs would probably end up being 1.5-2x that. I am an upper-middle class person, but I would be mad about someone putting those expectations on me (I guess that's why I don't get invited to bachelorette parties!).
Well that, and your jeans are totally 2023.
Did mom jeans already go out of style again? I can't keep up!
Those barrel jeans went out of style in June. I can't believe I have to tell you this.
Thank god
Fair, I didn't read carefully enough. That's getting pretty steep.
That and your apparent lack of a vagina.
I’m wondering if the person invited the party had any say in choosing the venue etc. in any event all they have to do is say “sorry, no can do”
My annual Vegas guys' weekend costs me about $2,500 (without gambling). But I didn't start doing this until I was in my 40's, not my 20's.
But the room portion of that is usually only about $500 (and I get my own room). My thoughts are if she is spending $800 on just the stay, how much is the flight, car rental, food, booze, entertainment, etc?
She might want to duck out. I guarantee she will not gain any kind of pleasure from this trip. Trips that are not all about you usually suck. And I've never met anyone who said "I got $3,000 in debt going to my bestie's bachelorette party and it was the best weekend of my life!"
Well the comparison isn't perfect because on the Vegas trip, you'll make up all that money via winning at the casino. Well maybe not this time, but next time you'll end up on top! Or surely the time after that!
One of these days...
Yeah, the problem isn’t that cost, which is pretty reasonable for a vacation weekend, it’s that this person can’t afford a vacation weekend, they’re unemployed! I sympathize, I was unemployed for quite a stretch there.
You either have time or money but rarely ever both
Yeah I can't blow a 'less than a weeks pay' on a party you're throwing for yourself. Inviting other people to spend money on a vacation for you that you choose is a bit rude. Ditto destination weddings. The destination is a great place for the honeymoon, not the wedding.
I don't think anyone has a problem with people doing these things if they can afford them; I think the issue is demanding that everyone participate in these very expensive vacations and ending friendships if they don't.
Granted, this is one side of the story. I wonder if she already agreed to the price a while ago and then pulled out what seems like last minute.
As a rare young female member of the commentariat, I regret to inform you all that this is a super common ask. In fact my faraway friends and I have non-bachelorette trips that approach this cost. Although $800 is a bit steep in pure housing cost for a weekend.
Hopefully Mom and Dad can help her out of this pickle.
This 2000s era where I have a bunch of close friends 3 timezones away is exhausting. Social norms have not yet adapted to the invention of the jet engine and SMS. We either need to return to the year 1400 when you lived and died in the same village, or return to the year 1900 when moving from Detroit to Chicago meant you would never see anyone from your old life ever again.
I cringed so hard reading that. Even accounting for the likelihood of making shit up, wedding culture seems out of control.
Mike Leach was a national treasure on this subject. Damn I miss him.
https://www.youtube.com/watch?v=GUSKmzzh-X8
https://www.youtube.com/watch?v=gGIap2_tmng
Leach was the greatest. Didn't matter what you asked him, he'd give you a thoughtful answer. I definitely miss him all the time.
I watch this video of him ranting about 'fat little girlfriends' at least once a month: https://www.reddit.com/r/CFB/comments/zkpmk7/mike_leach_on_fat_little_girlfriends/
He was a huge Trump supporter but we were lucky to have him.
Lyn has a shit friend
Another piece of the affordability complaining in that piece is that the bachelorette doesn't want to pay the extra cost if one of the members drops out. If there are 5 people and one drops, then the cost goes from $800->$1000 and is that suddenly unreasonable? I assume all of the other costs are probably per person and would not be affected by one person leaving (food, drinking, events). If that encourages another person to drop though, it might spiral.
In 2018, we did a guy's weekend in Austin. The Airbnb and flights were expensive then we mostly drank and played video games while reminiscing and catching up. We did it again this year but at two friends' houses who both live in Denver. They saved on flights, everyone saved on Airbnbs, and we went out a lot more and spent a lot less. That's what I'd recommend anyone to do if they can.
You can also send out a second-round invite, but I've seen those ruin friendships
I actually was surprised it was that low an amount at issue.
It's $800 only for her share of the vacation rental. There's still food, drink, transportation and any associated activities. Then of course, there's the wedding itself which will involve buying a new dress, if she's a bridesmaid. I can see it being stressful for an unemployed person, for sure.
Agreed, she can't afford this. One of life's lessons either way.
Fair point. I'm just inured to seeing things about mid four-figure expenses being imposed on bridesmaids, so $800 even just for the room (presumably for two or three nights) didn't seem ridiculous given hotel prices these days.
Yeah I'm pretty sure when I planned my friend's bachelor party it was $100 at most.
My brother (best man) was just complaining the last time I saw him about how much he spent on my bachelor party 25 years ago. He spent $500 at a strip club for a bunch of alcohol and some dances.
I feel like I must go on record as saying that I'm not the type of guy to frequent SC's, and this was my only lifetime SC experience. And not my idea! That is what I reiterated to my bride repeatedly.
Not trying to be a prude but I honestly don't get strip clubs. I've never been to one intentionally. One time I was playing poker on the bar and then about an hour in they were like "welcome to the stage blahblahblah" and I was like "oh, I didn't even notice they had that." Wife wasn't mad, she knows I'm too autistic to notice any of that while I'm doing math.
It's not really my thing either. Hence me only going once in my life - and not my idea.
Everything else aside, the amount of money spent relative to the "services" received just seems uneconomical to me.
Also, I'm not sure you actually went to a proper SC.
I have no intention of doing so.
Hah...
No doubt - those wedding cantatas are hard! $800 won't buy you the ghost of Shooby Taylor.
My Democratic plan to promote affordability: a browser extension powered by AI* that converts all nominal dollar figures to inflation-adjusted real dollars. Stretch goal if a 2028 trifecta is achieved: make it into smart glasses, so all prices everywhere are always real. Keeping It Real: A Vote For Democrats Is A Vote For Affordability. You'll never see inflation again!
*"Don't tell me these kids can't learn to code!" -OpenAI substitute teacher in Waiting For Sam Altman, now debuting at Cannes and other fine film festivals
"Your savings account earned -3.14% interest this year"
Add in an automatic sales-tax converter... Wal*mart isn't allowed to lie to me anymore!
This is incredible especially the end
One of the great divisions between Generation X and Millennials, of which Matt and I are right on the cusp, is whether or not one can remember the great inflation of the 1970s.
As such, I want to pose a question to Slow Borers older than us: how long did it take people to get over the fact that prices weren't going down from what they were before? And did the Fed's shock therapy of the early 1980s help speed up getting over that?
I am also on that cusp and a recurring topic of my (boomer) parents family lore is how difficult it was for them to buy their first house (a condo in approximately 1979) because interest rates were so high.
To that point here is a very interesting artifact from Ghostbusters:
https://youtu.be/N5C8C1WAywU?si=-L6s71TZSkOVR62T
Now obviously in context 19% is supposed to be really high even in 1984 but per Google common rates at the time were around 13%. This says to me it was still on people's minds enough to be part of a throwaway joke in a major film.
My first house mortgage was 13.5% in 1984. It was as good as you could get then.
I was born in 77, but I remember inflation clipping along at 5% for much of the 80s and 90s and people were mostly chill about it because things like cost of living adjustments became standard.
The real issue is when raises are literally based on performance, then you have to perform well just to stay even. Even if your employer puts a thumb on the scale and gives average employees a raise equal to inflation, you are told that you got your 3% bump for performance and you feel like inflation took it from you.
Inflation really does give employers more leverage over ordinary employees, because it makes declining real wages the default. But if your union gets you a cola, it isn’t so bad.
As a small businessman, ai don’t mind inflation because the prices I can charge are highly sensitive to the nominal resources of my client. Inflation has put a dent into my trust fund, but it’s also put a dent in my mortgage. I’ve taken a net loss on those, but if your mortgage is bigger than the wealth you are forced to invest in bonds, it’s net positive.
How do you deal with health insurance rates? I just came back from a conference where a number of directors were worried about the increase in rates because many employees will end up with less money in their pockets despite recent raises
I get insurance through my wife’s job and comp her for the after tax hit she takes on that.
Thanks. I misunderstood. I thought you meant you owned a small business, and was asking how you dealt with insurance cost increases for your staff. But it sounds like you may be your only staff member.
I’ve never offered insurance to employees, most of my assistants have been under 26 and gotten it through their family, otherwise the exchanges
I was a teenager in the 70s, and the main thing I remember is just everyone screaming. The Whip Inflation Now buttons, constant (CONSTANT) newspaper headlines about prices going up, my clothing allowance being wholly inadequate, etc. In my memory, no one expected the prices to come back down. We just wanted them to stop going UP.
The recession of 1981-1982 may be illustrative. Unemployment had been as high as 11% at that point, interest rates were in the double digits, and inflation had also hit double digits, and then fallen to between 5% and 8% during those years. My dad was a low level executive at an energy company, and my mom stayed home. Most of my friends and neighbors worked in factories, and were constantly on the cusp of being laid off, or had been laid off, etc., and prices were a huge source of stress. Everyone was worried all the time. But Reagan was re-elected in a landslide in 1984 - when interest rates were still in the double digits, unemployment was around 7%, and inflation averaged out just below 5%.
I don't know if that indicates people were just used to the higher prices, or felt better because unemployment had fallen, or "vibes" or what. I know that when I bought my first home in 2000-2001 my mortgage rate was over 8%, so when I hear people complaining about 5% rates I smirk; but then again, home values were much lower when I bought my first place, and I managed to buy two more houses (sequentially, I mean) over time when values were still pretty low and interest rates had dropped down in the 2% - 3% range, then sold my last house at a pretty big markup in one market, bought another house at a fairly low price in a more depressed market and still at a low interest rate. Now my house has doubled in value, and I have that low interest rate. So anyone coming along in the past few years is at a real disadvantage in terms of purchasing a house.
Inflation over the past few years, along with a big increase in my property taxes, have put a dent in our income, but we are in an upper-middle income range. My relatives making $25,000 to $50,000 per year definitely feel that pain much more acutely, so telling them that median incomes are up isn't going to convince them that they live in the best of times. My grandparents grew up in crushing rural poverty where most people didn't have electricity or indoor plumbing right through the 1930s, and they were just as likely to use horses as they were to use motor vehicles; my cousins and I were alive during the bad years of the 1970s/early 1980s, but somewhat insulated from it by our youth, and our adulthood has been years of relatively stable prices, low interest rates, and low unemployment. It probably feels pretty bad compared to what they are used to.
My parents and grandparents are still upset about it
Same here. My dad will tell anyone who will listen about the 18% mortgage he had on his first condo.
>how long did it take people to get over the fact that prices weren't going down from what they were before?<
Realistically? They never got over it.
Ask people who worked for Jimmy Carter.
I was in high school and college during that period but I don't remember my parents complaining too much as their wages were climbing too. And they had a 4 percent mortgage from 1966 that got increasingly smaller relatively (I think their monthly payment was $170 a month for our house in Laguna Beach, yeah Laguna was cheap until South OC grew into a financial center. That same house was listed at $5 million last year). I do remember the price of bread going from 39 cents to over a dollar. I was living on $50 a month for food in college ---a lot of oatmeal and I don't remember many BBQs, lol.
Gen-Xer here. I think that inflation was different because there was a big recession with really high unemployment. That reset expectations.
As GenX I would say... people complained through the 80s. Ghostbusters reference cited below is useful.
Perhaps median income/wages have gone up but MINE haven’t! So movie tickets go up, that’s real lack of affordability to me!
Two points I think you missed:
1. Median increases in wages still means there is a significant number of people in the bottom half of the curve who are not making more than inflationary rates, right?
2. A few months of progress doesn’t make up for the backsliding we’ve been experiencing for years.
One more interesting point to add from Derek Thompson's Plain English podcast, of which Matt was a guest. Restaurants like Chipotle and McDonalds have reported less purchases from low-income customers.
Article link: https://abcnews.go.com/Business/restaurant-chains-sounding-alarm-consumers/story?id=127291717
Podcast link: https://www.theringer.com/podcasts/plain-english-with-derek-thompson
I'm assuming this is based on zip codes and averages, but I'm really enjoying the mental image of a Chipotle worker asking me how much money I make immediately after I say "no" to adding guac
Getting roasted by Chipotle employees for being broke lmao
"No guac? Yeah I figured."
I love listening to Matt on audio so I'm excited for this. I know there won't be much new but sometimes one is tired and doing things around the house and too tired for The Economist on Audio or a 4 hour AI podcast.
Well-established that higher income consumers have less elastic demand, and so get charged higher markups! Big fan of this paper.
https://kunalsangani.com/files/income_markups_live.pdf
Especially given that I doubt a lot of people have been getting raises such that their current job pays significantly better. Most people are lucky to get an annual raise that hasn't been entirely consumed by inflation and that just feels like sprinting to stand still.
I totally believe most people who took new jobs have gotten better starting pay than they would have, but that's not most people, and "get a better job" isn't something people can just throw into their household budgeting every six months.
There was a study recently which showed that (a) people have mostly increased their income by job switching and negotiating for higher pay, rather than regular raises and (b) that people hate doing that. Which I think is a big part of why people don't like the current economy.
This echos both my personal feelings on the "modern" economy and what I think folks like Kyla Scanlon and others have noted about modern pricing strategies.
Everything feels gamified and requires you do personally do optimization to get ahead. Whether its being a member of a billion different loyalty programs, having 200 apps downloaded on your phone so that you can harvest benefits from each one rather than pay the price on the menu, cycling through credit cards to get the sign-up bonuses before dipping, or whatever. It feels like you have to invest personal time and effort into every transaction or else you're getting screwed by someone.
So ya, there are ways to make it in this economy, but they all feel shitty. Whether that's constantly needing to jump from one employer to the next to maximize your salary or browsing 13 different apps to figure out the best one to get take-out from.
This ties into a general theory that I have (partially taken from @opinionhaver on Twitter) that modern society suffers from way too much optimization -- in sports, in relationships, in the economy.
Yes, exactly. A little coupon clipping around the margins is fine. But when you get into a retailer-vs.-consumer optimization arms race, the firms don't end up capturing much additional surplus, and most of the consumer surplus is nuked away in the form of wasted time.
Costco is such a breath of fresh air
And also the lowest tiers of product have been removed. The minimum standard for so many things is way above what is needed. So there is no SRO for cheap living. The cheapest computers are way overkill for most people's needs. Your internet and phone service is going up in speed and price even when it is now way to much.
Housing, sure, but I'm not following you on the others. You can get a serviceable used computer for $100. (And probably for free if you're willing to dumpster dive and mix and match parts - though if you have the skills to do that, you probably value your time at more than that). Mint Mobile is $15/month. Home broadband can be found for like $30/month, which is barely more in nominal terms than what my family paid for AOL dial-up in 1998.
Maybe it's true that the "default" big brand is a bit more inclined to upsell you than in the past. But it's not at all hard to find cheap options.
I think it's even more real than people hating that shit. The people most concerned with affordability are specifically the people who are in the middle class and struggling to budget for a family. These things make people prioritize things like stable housing, job security, location/community, seniority linked benefits, etc, etc. They don't have the flexibility to drag their families around chasing better pay. And dramatic price increases put incredible strain on this kind of household budgeting.
It strikes me that this is a type of scope creep where getting a good job now entails more and more effort outside of the job itself which is a burden on precious time. It feels much harder to turn off outside of work especially with job hunting (spoken as someone who was job hunting not so long ago)
Support this claim.
https://jadhazell.github.io/website/draft_conflicts.pdf
As a personal anecdote, this is absolutely true - since 2020, I've been internally promoted once and I've received several above-average performance reviews. My salary, when adjusted for inflation, is basically the same as it was in 2020, while the cost of food, housing, and car insurance has gone up 20-40%. I'm still doing well financially, but it does absolutely feel like I'm working really hard and getting nowhere as a result. In talking with my coworkers, the ones that haven't changed jobs since the pandemic are in the same boat, and most all of them are quietly very frustrated about it.
I think this dynamic is a bigger deal than people realize. For those willing to assume bigger risks, change jobs, and move for jobs, they do better economically overall. But people who want to stay loyal to an employer and remain rooted in their community will comparatively lose. This is going to exacerbate the cosmopolitan vs localist divide, and feed into divisive national politics in a big way.
Also, it's not like the interview process at most employers is particularly optimized to find the best possible match for the role. See Cartoons Hate Her on being a terrible employee but a great interview, and a lot of people are in the opposite boat. They are disadvantaged by the current economy.
And this must not be true in many industries but in my industry when we’re reviewing resumes and see that someone has changed jobs every 1-3 years, it’s still seen as a red flag. It makes a person seem uncommitted and/or unreliable.
I’m don’t mean any offense at you personally but any time I see someone say this I immediately flag them as a boomer who has no idea what the job market is like
Very end of Gen X. I think it may just be that this is seen differently in different industries. If I wanted someone for a year or less, I’d just hire a contractor.
Yep, I just pass over those resumes
Maryland stopped ticketing people and they have let so many uninsured drivers operate on the roads.
I should have dressed up for Halloween as a Nissan Altima with a missing bumper cover, a busted-out rear window covered with a trash bag, and Virginia plates - there is nothing scarier in the city of Baltimore...
I have seen a smoking Altima on Aliceanna. I have also seen one without a front wheel driving down President. Just the rim, sparks, and burning asphalt.
“Sir, we are going to impound your car and you are sentenced to corporal punishment from a Catholic nun with a yard stick.”
Altimas and Infinitis I swear
You don't get to adjust your salary for inflation, while comparing with increased nominal costs. Either compare real salary to real costs, or compare nominal salary to nominal costs. You're doing an apples to oranges comparison.
Why the reluctance to change jobs during one of the strongest labor markets in history?
Most people with families don't have the flexibility to chase higher pay all the time.
A few reasons:
1) I had a major health crisis in 2020 that, once it was over, required strict surveillance for several years in case it came back. I was loath to change employers because I was afraid of losing access to the doctors & relationships I had built up in 2020 and 2021.
2) I was working on an advanced degree that my employer was paying for, and their requirement was that I reimburse them for the cost of the degree if I left within two years of finishing it.
3) I work in a fairly niche field, and most comparable jobs would have required relocating to cities with a much higher COL (Boston, Washington DC, Seattle, southern California, etc). While I'd have probably received a pretty great raise if I moved, I did some math on COL differences, and I'm not convinced that my standard of living would have grown commensurately.
1. Fear of the unknown. Changing jobs requires a bit of a leap of faith that your manager, responsibilities and coworkers are all going to be fine. If those things are fine at your current job, you may not want to risk a new job being worse than what you're currently doing.
2. Benefits. I have fantastic benefits at my current company. Many other companies have the same benefits on paper, but I've found out that people get punished for using them through the grapevine (ie, people who take parental leave end up on the slow track for promotions).
3. Job hunting is a pain. Job seekers have to send out so many applications just to get an interview nowadays. There's also the expectation that you have to tailor your resume to get through the ATSes that everyone uses, and that is a huge pain to go through only to usually get no acknowledgement.
3. Sounds like what you need to do if you're unemployed vs when you're employed and just update your status on linkedin.
People over 50 find it harder to do so, and are reluctant to be the "last one in" at a new firm.
"Everything in this inflationary economy is going up in price, except me".
I agree that a more relevant metric than median household income is what percentage of households' income grew slower than inflation over the last 3 years versus higher than inflation? That's potentially a better explanation for the affordability crisis than "vibes", if that number has grown significantly.
I think there are two metrics that hide it.
1) distributional effects- if 1/3 had flat (nominal) wages, 1/3 matched inflation, 1/3 beat inflation (by more than the inflation rate) it would mean median wage was keeping pace and the average would be going up. However, despite 2/3 of people doing the same or better, it would feel like 2/3 of doing the same or worse (also true)
Which combine with 2) the basket of goods show some high spikes, that look and sometimes are worse. For example, if food costs 1.5x more, and it is 20% of your pre-inflation spend. Your overall spending has only gone up 7%, which might be mitigated by a wage increase (spread out over a couple years). Yet mathematically, a 7% gain doesn’t feel like a 50% gain! Even if it is balanced out by other items getting cheaper in real terms.
This second factor makes even those with increased incomes feel robbed. You combine that with those that genuinely did not see income increase - everyone is pissed.
Here knowing Median and Mode - my recollection from looking at such data last year is the there's signficant distribution so averages - median - are quite deceptive - both as being national and as disguising important income-level variations (also that one needs to understand different consumption basket weighting - the macro aggregate is a useful thing BUT like all tools it has its limitations that bleed into visibility in political sense like now)
It would be interesting to create @Wallace’s “accessibility vibe” stat like the “percentage of households' income grew slower than inflation over the last 3 years versus higher than inflation” on a Congressional District-by-District basis. I bet @Matt could do that in his sleep.
I also bet it would tell us that urbanites are getting screwed so Trump couldn’t care less
Median wage rising faster than inflation is compatible with a lot of different distributions. It could be that everyone’s wage rose 1% more than inflation. It could be that half of people’s wages rose faster and half rose slower. And it could be that it’s the poor half that rose faster while the rich half rose slower, or that the rich half rose faster while the poor half rose slower! It could even be that the top 40% and the bottom 40% both rose slower while the middle 20% rose faster. So many possibilities.
(But most likely it’s close to the first - a strong majority of people rose slightly faster.)
It seems like this topic could have a week of deep dive coverage as it's kinda endlessly fascinating. I think "people hate nominal price increases" is a compelling part of it, as is the relative price shifts between goods and child care; and the general lack of human well-being associated with cheaper streaming vs. child care.
But it also seems that there's not a situation where Americans would say "ok, things are affordable now", until you had a truly post-scarcity society. People will just keep adjusting their expectations. A lot people in their 20s today wouldn't dream of having a child until they have a separate bedroom for them in a house they own, and are ready to contribute $1000 a month to the college fund and other $1200 to the traveling soccer team. People in the hallowed 50s often had a family of five or six sharing a one bathroom, 1100 SQ ft tract house, and entertainment was "go throw rocks at the cranky old lady's mail box".
Part of the problem with this comparison though is where are the 1100 sq foot homes to live in? "Starter homes" were plentiful in the '50s, and you could easily buy one on an entry-level salary. Many cities nowadays won't let you build homes that small because of minimum square footage requirements. So if you want a cheap, 1100 square foot house, it's probably not actually cheap because new ones haven't been built in the last 50 years.
Lots of 2-3 bedroom apartments in my city are that size.
Lots of apartments are that size in my town as well! But my point is that single family houses aren't that size anymore.
Why is that a problem?
Because for the most part in most cities, apartments are for rent, not for buying. The problem is basically that it is difficult to get on the homeownership ladder.
A typical pattern in the 50s was to buy a starter home, have a kid or two in that starter home, and then when the kids got bigger and you might want to give them more space, you could add rooms onto your starter home or sell it and get a bigger place. This was better for most families than the current pattern, which is to rent a series of small apartments while saving for a down payment on the house that's big enough for the teenagers. The reason that people do this pattern nowadays is that for the most part, small cheap houses are pretty scarce.
> Because for the most part in most cities, apartments are for rent, not for buying.
I doubt this is true. And even if it was, that's just an argument for more condos.
The suggestion is that whatever you already live in is good enough.
The size of my 1100sqft loft seems like it would be fine for one kid, but it'd be pretty hard to put a baby or toddler down to sleep while the adults are still up and about in the same (giant) room. I'm going to insist on at least having separate spaces. But the combination of bedrooms requiring windows and multi-family structures requiring two staircases makes separate spaces very hard to come by in apartment/condo buildings.
I agree, and yet pretty much every generation before ours raised children in considerably more difficult circumstances. We just keep adjusting our expectations. It's not a bad thing but it is a political reality: everyone will be disappointed with the status quo, always.
The literal same structures I want and can't have were occupied by working and middle class people for like 100 of the last 115 years. I get that I'm incomparably wealthier than them in terms of consumer products and leisure experiences, but that's a big one.
Starter homes still exist, in fact I've been renting one....for the past 10 years. Geez I'm really just throwing money away aren't I.
> But it also seems that there's not a situation where Americans would say "ok, things are affordable now", until you had a truly post-scarcity society. People will just keep adjusting their expectations.
I recently had a related conversation with some people in Vietnam complaining about the cost of living. They have similar housing issues (slightly different root cause but same end result of extremely high prices) but also real incomes have increased substantially (real GDP per capita has doubled since 2010) and people still act like everyone is just "getting by". Okay but now they have iphones instead of Nokias. They drive cars or Honda SH instead of a Honda Cup. They drink coffee from espresso machines instead of ca phe vot made from a sock. They buy new clothes from Shein on the regular, instead of the daggy stuff from the local market. Consumer credit is now a thing (it wasn't 10 years ago when I first moved there) so lots of stuff in now paid via installment plans. Air conditioning was non-existent in homes outside of foreigners or the wealthy but is becoming more common (usually just a bedroom, not the whole house).
You're right expectations just keep going up. Which is good? But I guess I'm old enough now that I get frustrated about people whining that life is so tough when I used to walk to school uphill both ways in the snow barefoot.....
I think the main thing is being able to afford a home. I know my wife and I refused to have kids when we got married 20 years ago until we were in a home.
We struggled for a bit renting and then finally moved in with my parents for 2+ years so we could save up and get in one. But still we wouldn't have been able to do it except there was a brief period of home pricing sanity, we bought in 2010.
A couple of years later we would have been priced out of the market forever. And note I'm not talking about McMansions here. I'm talking about 1960's starter track homes that need some TLC
stuff like this
https://www.zillow.com/homedetails/1588-Calle-Portos-Lompoc-CA-93436/15926837_zpid/
Yeah I think this is a big part but kinda to my point, "a home" means something different than it did 50 years ago. People won't compromise on what they think the baseline is in terms of square feet, number of bathrooms, or location.
Isn't the house they linked exactly that baseline from 50 years ago (65, actually) that you're claiming people will no longer accept?
While I don’t disagree that affordability is directly linked to inflation, I tie this more to the perceived affordability of large purchases as you grow through life. Most people‘s first big purchase is a car, then it could be a house, then it could be paying for kids college. Depending on where you are in life, these coming expenses become a huge part of your spending and seeing the sticker prices on some of these items can cause quite a shock. To me affordability is about being able to make these larger purchases while not losing the ability to continue living your current lifestyle at the time of the purchase. The sticker price of these items always seems to go up, and seemingly faster than any other price.
Even beyond the sticker price, I was shopping for a car recently and felt that even though the sticker price wasn’t up by that much the actual price paid was dramatically higher because dealers were not throwing in any discounts or freebies like they used to but were instead charging for things. Actual prices seem to have gone up more than sticker prices and this may be a cause of hard-to-measure hidden inflation as well (not only for cars but also things like Costco, where discounts seem a lot less frequent even compared to last year).
The old rule of them was to not spend more than a quarter of your income on housing, which you could do through the 90s. Now I hear it's half your income and some are paying even more. That may be at the root of a lot of the money worries, even if you had a low interest rate mortgage you still paid a much higher cost for a house in the last 20-25 years.
IMHO, that's by far the biggest thing. The average home cost 2.2x the average income in 1950. That would translate into an average home price of $180k today.
At those prices there would be plenty of money leftover for everything else.
I do think consumer anger is in response to increased prices on day-to-day household goods. However, I suspect you are right that the big purchases play a critical role, in particular a psychological one. Seeing inflation at the grocery store feels very different if it happens in the context of being nervous about housing costs or college costs or childcare costs. Each increase in price on a minor purchase can then trigger that larger anxiety.
I think an underrated factor is the explosion of cheap, less durable, often low-quality consumer goods over the past half century. Buying lots of bargain-basement stuff all the time is how Americans live their lives. There are some real material positives that come with that (also some real negatives, I’d argue, materially and not) but it does skew how people absorb price increases? When you expect to be buying new things constantly, a modest rise in prices feels like the horn of plenty has dried up.
Cars are dramatically cheaper than they used to be. As an example a 1995 Honda Accord EX-L was $26k that's $53k today. The actual current price is $34,490.
A lot of things can be true at the same time. I agree that the average American is better off today than any other year ever and much better than the average person in other developed nations. I agree that when we adjust prices with incomes that actual affordability has tended to improve most years.
But we still get pissed off when prices go up. They just seem too high. Day care, health insurance, rent, any kind of home or car service.
Perversely, the things that will (and clearly did) help keep prices from rising are more immigrants and more outsourcing production overseas. Between the 1990s and 2020, I was always amazed that prices on clothes and electronics seemed to never go up at all. It was great. Of course these create new sets of problems.
But of course this REALLY depends on whether you already own a home or not.
If you are trying to buy a home as a family just starting out you are fucked
Not sure which part of my comment you disagree with… the part where I said things are on average getting better, or the part where I said we can still get pissed off when things (like house prices) get worse?
My point is that whether things are getting better really depends on your situation. If you are already in a home you can afford then a lot of things are looking good. In fact, you are probably ahead because inflation reduced the value of your mortgage.
But if you don't then you are screwed.
Screwed compared to whom?
screwed as in you can't afford to get in a home ever.
One of the ways people kept up with inflation in 2022-2024 was by changing jobs. That definitely feels more like your own effort than something you're going to credit to Bidenomics. It also probably for many people came with trade offs like longer commutes, more responsibility or hours.
My family is in exactly this situation, it's overall fine but it's not something we're doing victory laps over.
Yeah. My workplace has been giving out a standard raise of 2% per year, which is a real wage decrease. So if you want an increase you need to leave. Talking to friends it seems this is fairly normal.
Unemployment is low in part because inflation allows companies to decrease the wage bill without firing.
I mean, it IS kind of wild that prices are up 25% since Jan 2020 (which I will call "pre-pandemic").
25% is a lot and quite noticeable, especially when we had such a long period of pretty stable prices in the 2010s (after the GFC)
source: https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=100&year1=200001&year2=202509
[note: apologies, initially 2020 was typo-ed as 2000! fixed.]
I just go to the grocery store and marvel. It's like every price is made up. That box of cereal costs how much? Are you sure? I remember when it was much less. At this store. Not that long ago. Am I being punked? It's a really strange experience. Soon bananas actually will be $10.
Excellent tweet about this: https://x.com/clickingseason/status/1966541505050316838?s=46
“I just paid $7.50 for an iced coffee. I’m at an age where I can no longer tell whether this is just a normal inflation adjusted price or I’m being extremely ripped off. Pricing is psychedelic to me now. I just give them the money they ask for and try not to think about it.”
Yeah it's honestly wild out there. I also sometimes wonder if businesses are better at pricing? Like before they might not have known the coffee shop in the next town over is charging more but now everyone can tell what everyone else is charging
It's especially weird for infrequent purchases. My deodorant was on sale in 2021 so I bought six at ~$4 a pop. Finally this year I run out and now they're $9?
I still bought some because what else am I supposed to do, stink? Still hurts though.
"25% is a lot and quite noticeable, especially when we had such a long period of pretty stable prices in the 2010s (after the GFC)"
Inflation was 23% from 2008 to 2020.
I agree with the number but I can't tell if you are agreeing with me or not re how it felt! :)
For me, inflation in that 2008-2020 period was so slow that I didn't even notice.
I wonder if it has to do with 12 years being long enough to move from one phase of life to another. If you go from 25 and single to married with kids at 37 it's harder to compare. Or to go from 37-49 and the kids are out of the house. 5 years is harder because your life phase is the same.
There's definitely a thing about just getting older and inflation being constant. I remember my grandparents talking about how things cost 5 cents back in their day and just rolling my eyes. But it hits a little different when it's actually you who can remember that things used to be dramatically cheaper.
For me, I think it's that I still remember the prices for many things from 2008, so while I thought some things were expensive in 2019, now I look at them and some of the numbers just don't compute.
Slightly more inflation in slightly less than half the time is a significant difference!
That’s roughly 1.7% which doesn’t seem very high.
I think prices from before 911 have gone up more than 25%
Prices are up 25% since Jan 2020. They're up 92% since Jan 2000.
oh , correct! shoot, let me see if I can fix it
The M2 money supply:
https://fred.stlouisfed.org/series/M2SL
Thanks for (perhaps accidentally?) answering my mailbag question, which was basically "is there a steelman case that 'affordability' is a useful and distinct economic concept?"
But this feels a bit more weak man than steelman to me. I'd think that before concluding that the "affordability crisis" is just everyone is being irrational, we'd want to (1) establish who, exactly, is angry about "affordability," and (2) address measurement issues, e.g., whether the real incomes of these angry people actually increased, taking into account that their consumption baskets might be different from the average.
A (non-exhaustive) list of points one could investigate.
1. It's actually not so clear that the *median change in real incomes* was positive during Biden's term. Note that this is a distinct measure from the *change in median real income*, and it's better suited to answer the question "did the median voter feel better off"?
During Biden's term, the median change in real income post taxes and transfers was actually negative, see here:
https://jzmazlish.substack.com/p/yes-inflation-made-the-median-voter
(Overall, this is a much better and more nuanced analysis than I've seen from generalist Substackers.)
2. We know most wage gains during inflationary periods accrue to those who change jobs or actively negotiate. What if these are costly actions for workers? Then people might be justifiably frustrated by inflation even if they end up consuming more, see here:
https://jadhazell.github.io/website/draft_conflicts.pdf
3. Much of the discussion of "affordability" is motivated by the conjecture that voters *swung* due to cost of living issues. Isn't it plausible that the most disgruntled voters (and therefore, those most likely to swing) would've disproportionately been those who experienced decreases in real income?
https://jzmazlish.substack.com/p/yes-inflation-made-the-median-voter
This was a great piece, thanks for sharing
The most obvious miss from the economist-brained is the timing of inflation and wage increases. If price double on January 1st (100% inflation) and I don't get my salary adjusted until January 1st next year, I've spent the entire year destitute. No one's out here negotiating their salary daily based on yesterday's CPI change.
This deserves to be pinned at the top of the comments, and I’d love to see Matt respond to it
I think the excerpt Matt includes about the "Bach party" is really relevant, because it gets at what really matters to most people: "How much money do I need to not feel like a loser? Will I not be able to spend enough and have to miss out on spending time with friends? Will my partner lose attraction to me? Will my kids wish they had different parents?" Whether you feel like a loser is determined by your social circle, so it's very possible for your income to go up, and still feel like a loser if your peers' incomes increase more. Cultural factors such as social media and advertising can also make materially comfortable people feel like losers.
Social media is the real culprit here - 15 years ago you (or your spouse, which can be even worse) didn't see the Italian villa vacation pics from your high school frenemy.
There's also the financial optimization of pretty much all kinds of events - every concert or festival has a VIP section now, and often multiple VIP level tiers. When you're already spending hundreds to get in the door, seeing other people get additional perks feels like a slap in the face.
Agreed and airlines is an even better example; ten years ago you could be pleasantly surprised that your seat was in an emergency exit / on the bulkhead. Now you're definitely paying for it.
Well, and it’s very Matt to be super glib about the concept by talking about frivolous spending rather than essential spending.
"Will my kids wish they had different parents?"
Depends, is your kid a teenager?
Per my memory of Zack Carter’s biography of JM Keynes, the is the same dynamic that felled multiple British governments during the 1920s. Of course, their solution to the nominal price issue was to try to reinstate the gold standard, which, while narrowly effective, had the same negative economy-wide impacts you’d expect.
A lot of the big political fights here in the US of A in the 19th century were also over whether we should have inflation or deflation — though they were not phrased that way. Gold standard vs bimetalism (and free silver vs not within the bi mentalists) and the more communism inflected folks calling for paper money etc.
The main explanation is simpler: house prices and interest rates aren’t counted as part of the official inflation statistic but are extremely important to the actual level of inflation people face because housing and mortgages are most people’s biggest expense. This means that the actual inflation rate faced by non-homeowners (or homeowners looking to upgrade) is significantly higher than the official statistics and corresponding actual real incomes are lower. This is also true for people who finance cars or consumption via credit cards.
OER is included, but I think the inability to buy an affordable new home of the preferred type is a MAJOR driver.
OER isn't the same as housing prices though.
The inflation index includes both rent prices and OER, or owners equivalent rent.
Yes, but I disagree that OER is really the same as home prices.
"Owned housing units themselves are not priced in the CPI Housing Survey. Like most other nations' economic statistics programs, the CPI program views owned housing units as capital (or investment) goods distinct from the shelter service they provide, and therefore not as consumption goods. Spending to purchase and improve houses and other housing units is treated as investment and not consumption in the CPI. Interest costs (such as mortgage interest), property taxes, real estate fees, most maintenance, and all improvement costs are part of the cost of the capital good and are also not treated as consumption items. These non-consumption costs of owned housing are out of scope for the CPI under the cost-of-living framework that guides the index."
https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-and-rent.htm
Well, there's not actually any mechanical reason why increases in inflation have to produce a corresponding increase in interest rates. If the real cost of money hasn't changed, you could in principle pay the same rate, pay the same amount in real terms, and pay off the loan at the same time as before. It's just that this would involve your nominal debt, and nominal payments, increasing for a while, and because most people don't understand inflation this would cause them to explode in paroxysms of rage.
(Australia saw exactly this with it's government student loan program. The debt is repaid based on income, and indexed to inflation, so when nominal inflation exceeded the repayment rate for some people it caused a backlash of totally irrational outrage about how their debt was going "up" even though they made payments on it)
I think the actual answer is that affordability isn't really about anything in particular at all. Instead people are mad about the economy in general and have been since the financial crisis, and "affordability" is how that's currently expressed.
In that case isn't it about social media having a tremendous negativity bias? If you write an accurate story about how things are great and people are doing well - you get zero clicks.
I think it's genuine, people hate how the economy works now even though most people are doing well income-wise.
I think a decent amount of people thought pre-covid economy was pretty good (usual welfare state is inadequate and why are we giving tax breaks to wealthy issues)
Isn't that just nostalgia bias? I don't recall anyone thinking it was particularly good c. 2019.
I'm anecdoting hard here, but my recollection was economy was good (we're out of the great recession) and it didn't have the same valence of everything sucks.
If you focus heavily on de industrialization as a concept maybe it was still everything sucks (but did the modal person have hope in Trump on this front if we grant more rural populations are now Republicans)?
What parts do they hate?
Personally I think it's the end of Fordism but actual research is needed.
Is this different from before? If so, how?
It depends what you mean by before -- I think people are more dissatisfied than in 2005.
Because of social media or has something about the economy changed?
I think we need more research as to what people are unhappy about. But I think relentless optimization on every side (of work hours and deals and job applications and social media and everything else) is a big part of it. That and housing costs.
People liked the economy in 2019 and 2021.
I don't think that's really true about 2021
Obligatory Simpsons Meme:
https://frinkiac.com/meme/S05E20/287369.jpg?b64lines=IFdIWSwgVEhFUkUncyBubyBvbmUgSEVSRSAKV2hvIHVuZGVyc3RhbmRzIHJlYWwgdnMuIApOb21pbmFsIHByaWNlcyBhbmQgaW5jb21lCkVpdGhlci4gCgoKCiBBTSBJIFNPIE9VVAogT0YgVE9VQ0g_CgpObywgaXQncyB0aGUgdm90ZXJzIHRoYXQKQXJlIHdyb25nLg==
Alongside compound interest, we need to find a way to intuitively teach in school the concept or adjusting for inflation.
Of course there all a whole bunch of problems in the way we count inflation. The number has been changed over the decades to make it look lower to keep down government payments