In this economists vs the mob discourse, the economists - unsurprisingly - have data on their side. People in surveys and across social media seem to be largely discussing how the **vibes** of the economy are bad; fears about being laid off, not having enough money to keep up with inflation (inflated prices), having to work multiple jobs, etc. Yet as economist Matt Darling often points out the rate of layoffs are low, historically low, and economists like Claudia Sahm have argued that the rate of inflation has fallen and that wages have risen to keep pace with the still somewhat inflated prices.
So then why are the vibes bad? The consensus from people like policy wonk Will Stancil - who has taken up the mantle as one of the more infamous commentators in this debate - is that social media, TikTok and the information feedback loop is poisoning people's mind and misinforming their supposed lived experiences.
There is certainly a media - both traditional and social - frenzy about the state of prices despite some of the larger myths being untrue or misleading; Jeff Stein had a great write-up on this whole debate that dismantled the $16 Big Mac meme that was going around. People are under the impression there are massive layoffs when there aren't. With all of this misinformation floating around and needing constant dismantling, there may be a point to be had about feedback loops.
However, I find the whole argument is missing a lot of key components that the economists and wonks, at least so far as I have seen, refuse to contend with.
Recently I sat on a Zoom call with Nick Bunker, one of Indeed's (the largest job board in the country) economists. I was able to ask him directly why he thinks there is a distinction between the objectively good economy that he and others are touting with what the American public seems to think of it.
To his credit, he gave a pretty fairminded answer; that Americans are still seeing the inflated prices, and while their wages should be making up for this fact it may not be computing enough to snap them out of the price delirium. Which is sort of a nice way of still saying Americans are out of touch with the facts of the situation. Stancil-lite.
But what I found interesting and what really got me thinking was his data on wages. There was a huge jump in wages in 21/22 and these have seem to come down. When pressed on this people like Stancil or Sahm will say that the wage rates have come back down to 2019 levels, which are still quite high, and more importantly, no one in 2019 thought the economy was in shambles.
Yet as Matt Bruenig and others have pointed out, there were a lot of gains made in 2021 and 2022 in the welfare state; things like child credits, free school lunches, etc in addition to large jumps in wages that were mostly the result of pressure from the great resignation and a high demand for labor (this can also be seen in the Indeed data). For my part, I would add that workers also saw an explosion of remote work and flexibility. There were a lot of gains for workers in the economy, wages and otherwise.
Bruenig argues, and I have to echo here, that the dismantling of those programs and the decrease in wage increases is frustrating people and leading to a lot of wariness over this economy. Adding the decrease of remote work, a slowdown in hiring, and article after article about burnout among workers (this was also echoed in some of the Indeed quits data about hospitality workers), even if it's just a RETVRN to 2019, I can't understand why it isn't easy for people to see how this would be frustrating and lead many to doubt the health of an economy that so giveth and taketh away.
Let's break it down like it's an equation in a child's math book: you have one candy bar, I give you three more, but before you can eat them I take two of them away. When polled about your candy bar experience, you state that the economy for candy seems unstable and you're feeling pessimistic toward the overall state of that economy. It would seem weird to say "but why? you have more candy than you did before!".
A more realistic, relatable situation: I was fully remote in 2021, and I only came in one day a week in 2022. After some high-profile layoffs and a cooling of the demand for remote workers, my company took advantage of the situation to increase the number of days we're all expected to work in the office. It's not five days, and it's true in 2019 I was happy with five days in the office, but I got a taste of zero to one day, so it shouldn't be surprising that my disposition has changed. Now apply that logic to wages or the various COVID programs.
The other side of the argument is unemployment and layoffs being low, so theoretically there is still nothing to fear. But similarly, the slowdown in hiring and demand for workers has chilled the Great Resignation that gave workers empowerment over their compensation and flexibility. So maybe people shouldn't be afraid of being laid off, they might feel the slowdown in hiring as being a comparatively bad thing in the economy.
I'm more interested in exploring these sentiments rather than just deeming them wrongheaded or misguided. When I talk to a candidate and they're concerned about leaving their current job because the economy doesn't seem as strong as it once was, showing them a graph just doesn't cut it.