Is this economic pessimism supported by data?

Online, I see lots of complaints about rent burden, but it barely increased from 25%->27% from 2001-2024 [a].

Median wages are growing faster than inflation, too. The easiest numbers to pull up are Wolfram Alpha's [1]:

CPI (2001-2022): +68% (+2.5%/yr)

Median wage (2001-2022): $27060 -> $46310 (2.6%/yr)

Mean wage (2001-2022): $34020 -> $61900 (2.9%/yr)

Bottom 10% wage (2001-2022): $14070 -> $27340 (3.2%/yr)

I think there was a temporary spike in rent burden [2] [3] which quickly reversed [4].

It generated lots of headlines, but nobody paid attention to the decline.

[a] https://cre.moodysanalytics.com//app/uploads/2024/02/image-1... , from [4]

[1] eg: https://www.wolframalpha.com/input?i=median+US+wage+2022

[2] https://www.moodysanalytics.com/about-us/press-releases/2023...

[3] https://fred.stlouisfed.org/series/DP04ACS006037

[4] https://cre.moodysanalytics.com/insights/market-insights/q4-...

EDIT: A commenter below led me to the following stat: 32% of American adults can't afford a $500 expense with their savings (Table 12): https://www.federalreserve.gov/publications/2023-economic-we...

Good info. Yeah I think a lot of the grief centers on housing costs and, most acutely, consumer inflation.

What's mysterious about the inflation to me is that there's very little discussion exploring an inflation rationale that links it to record corporate profits and a record raging bull market.

That lack of emphasis reads political to me. The people being most harmed by consumer prices are generally not the ones who are most benefiting from it.

"When workers get pay increases, they think it's their own work; when they see inflation, they think that's bad policy" - Dean Baker

I think both wages & prices around the time of covid, and it's easy to manufacture dissent over this (due to the above quote).

I'm not referring to policy as much as actual economic activity and firm behavior, including pricing.

It's true that prices and wages increased through COVID, but I don't believe the full explanation is quite so neat. For instance, this article lays out some additional details.[0]

Essentially, commodity pricing and other production inputs have stabilized, however, companies are charging their customers higher prices and enhancing their margins.

This is yielding record corporate profits and helping to fuel the bull market while consumers end up eating the resulting inflation. Yet, there's relatively little discussion about it when the issue of inflation is raised.

[0] https://archive.is/ZTkw3

Why do they have a bleak outlook?

The broader economy is strong, and their long term employment prospects are excellent, with many people leaving the workforce and productivity gains increasing overall wealth.

Something like 30% of 30-year-olds still live with their parents. Almost 40% of American adults cannot afford a $400 emergency expense. People are suffering and you're indifferent because you exist in a different class.

Appreciate the reply. For the curious, here's a source for the emergency expenses number (32% can't afford a $500 expense with their savings per Table 12): https://www.federalreserve.gov/publications/2023-economic-we...

Notice that really only 13% of households can’t absolutely afford a $400 dollar expense, and the difference between the 32% for $500 vs the 40% for $400

> Sixty-eight percent of adults said they could pay an expense of at least $500 using only their current savings (table 12). This is a somewhat larger share than the 63 percent of adults who said they would pay an unexpected $400 expense with cash or the equivalent, suggesting that some people do choose to pay with other methods, even if they have cash savings available to them.

I'm not clear on how you're linking the stats (which are, BTW, off by about 20%) you just posted to the state of the economy. Can you clarify?

40% of people not saving $400 doesn't mean the economy is bad. It could mean they don't know how to save the money they're earning. Perhaps something else is wrong.

> One-in-three U.S. adults ages 18 to 34 live in their parents’ home, according to U.S. Census Bureau data from 2021.

https://www.pewresearch.org/short-reads/2023/05/03/in-the-u-...

> Nearly 4 in 10 Americans lack enough money to cover a $400 emergency expense

https://fortune.com/2023/05/23/inflation-economy-consumer-fi...

> What a $400 emergency expense tells us about the economy

https://www.minneapolisfed.org/article/2021/what-a-400-dolla...

And the master of them all:

https://wtfhappenedin1971.com/

The negative economic sentiment is very common and IMO entirely manufactured because it sells. Actual economic data is excellent. It kinda makes Haidt's point. Traditional media clearly isn't helping either though.

GDP is not a meaningful measurement unless you somehow believe in nonsense trickle-down economics of the most extreme degree.

But inflation-adjusted median & 10th percentile wages have grown L20yrs, (per my other comment in the thread), right?

Sounds meaningful for the 10th percentile, but what about everybody else? I assume this is supposed to be a joke?

Can you provide a single metric that's bad right now? Employment is close to a record high, PPP median income is up. Housing cost isn't great, but homeownership rates are still as high as ever. It's mostly vibes that are down.

Edit: the parent also called out median comp being up. Again, the persistence of the negative vibes without any actual data reinforces how the media now negatively impacts everyone's attitudes and ultimately mental health

It does seem that US COLA-wages are growing more slowly than Europe (though better than Canada), while our stock market outperforms. So one could make a claim that more profits should go to labor, rather than capital.

Some numbers (all the usual "mean-vs-median" caveats apply, though IME it rarely changes much):

France mean wages (2001-2022): 41706/26275 = 1.59 (2.2%/yr)

France CPI (2001-2022): 108.74/80.39 = 1.35 (1.4%/yr)

GB mean weekly wages (2001-2022): 599/321 = 1.87 (3.0%/yr!)

GB CPI: 114.6/73.5 (2001-2022): = 1.56 (2.14%/yr)

Canada mean wages (2001-2022): 14,176.4/10,405.1 = 1.36 (1.5%/yr)

Canada CPI (2001-2022): 146.3/96.8 = 1.51 (2.0%/yr)

https://www150.statcan.gc.ca/

https://www.ons.gov.uk/economy/inflationandpriceindices/time...

https://www.statista.com/statistics/416204/average-annual-wa...

Things are still getting better though. One can be jealous that too little gets shared, but it's looking up for everyone. This is great!

How much do you expect to trickle down? Everyone with a retirement account benefits. How is that nonsense?

Some is expected to trickle. But denying trickle down economics means denying that helping the rich is an effective way to help the poor.

What do you mean by helping the rich?

Well, less than half of American households have money in their retirement account. And even for people with significant funds in their retirement accounts, that money will not be readily accessible (without penalty) for, on average, two decades or more.

You can withdraw from a Roth IRA penalty-free after holding for 5 years.

I can see being concerned about the spiraling cost of housing, but that's a problem with a relatively straightforward solution.

Housing is definitely an issue. The obvious solution to that are probably my biggest policy issue. That said, homeownership rates in the US are close to an all-time high.

And it's a problem that predominates literally every other aspect of one's life, and one's children's lives. Discussing it as though it's just one little exception is not just out of touch; it's practically insanity.

My guess: Negativity makes great clickbait & political propaganda.

I agree the numbers look great -- Added stats in a sibling comment above.

In my teenage years, I couldn't care less about 'economic outlook'. Because I rarely paid much attention to the news, and when I did, it was usually fairly balanced BBC content, not hyper-partisan hyperbole/clickbait.

Teenagers should be more focused on discovering their hobbies and interests alongside their education, finding some positive goals for their lives. But social media is telling them that WW3/climate-pocalypse/Trumpageddon is coming within months/years. They'll either be thinking 'why bother?' or 'we need a revolution!'. Neither of which are good for them.

You obviously didn't grow up poor, because if you did you'd realize how impossible that is to do when you are. Your parents are working 2 or 3 jobs and won't be home until you're almost asleep so you have to take the bus home; no afterschool activities or time with friends. That one thing alone selects the friends you can choose from. The well-to-do kids all hang out with each other because they have parental support that puts them in healthy environments they can relate to. You're speaking from a place with a lot of privilege.

I don't understand this thinking, civilization has never been richer. With the advancements we had in the last 150 years in tech/medicine/etc it's never been so easier to live and enjoy life. Even a poor person in my lousy eastern europe country lives so much better than kings lived 150 years ago. Where does this anxiety comes from?

From the media. Even if there's nothing objectively bad to worry about, the media is compelled to find something that people would rather watch than other channels. They "spin" things or invent them wholesale, just to maintain their paychecks.

We have it better than ever before in basically everything. But the media can't just report that, they have to find things that "need" improving and present them as dire straits.

Children, since they haven't learned to filter it out yet, feel that as soul-crushing dread. And since it's nothing they can do anything about, they feel helpless.

If the economy is so strong, why does the media need to resort to such desperate measures for attention? Like, shouldn't they also be reaping profits and such from the healthy economy, and as such not have to be forced into this grubby practice of manufacturing dissatisfaction?

What a strange argument. No matter the economical situation, companies will still want to maximize profits. In the case of the media, drawing the most attention, which results in depressing doomsaying, regardless of reality

So are you saying that, no matter what, the media will always have this tendency? Like we are doomed as humanity to be forever ill informed and drawn towards pessimism?

If that is so, then why even complain or feel bad about this stuff? Like all this discourse feels pretty futile if you don't even believe a different state of affairs is possible...

It will have that tendency, unless something else corrects for that behavior, such as people constantly calling them out on it.

Crime will always exist, too, but we don't stop fighting that, either. It's part of life that we fight against bad things, even if we can't possibly eliminate that bad thing permanently.

On the brighter side of things, the internet has provided people to more information than ever before, and cell phones have put that information in their pocket. People can and do look up things all the time and inform themselves.

If you truly believe this is the situation, I just don't understand how you can also think that constantly calling them out does anything at all. Its not doing much right now at least.

All you end up doing from this point of view is reinforce the very pessimism you are arguing against by posing this entire aspect of our society as forever broken

Also, is it not "the media" anymore when I inform myself on the internet? Where is the line there?

That’s not the whole picture.

Most of western civilization is in severe danger of collapsing into fascist dictatorships or being taken over by same, egged on by truly deranged billionaires who somehow don’t think it will negatively affect them. Antivax hysteria is bringing back mid-20th century disease. Climate change appears to be accelerating on the worst-case side. Militarized police departments. Racial injustice has always been with us in the USA, but now it’s been made visible to everyone, and it’s very clear that some people — who were supposed to be the good guys — not only don’t care, but actively support it. Multiple state governments are now encouraging book banning and child labor. Do we need to mention women’s healthcare?

And you, old person, are saying “you have it better than I had it in 1970’s jfc” — that’s true for some values of “you” and “I”, but you’re completely missing the point.

Being a poor urban worker in modern day has a lot of advantages over being a subsistence farmer in a community of 90% subsistence farmers in history. And yet, it has a lot of disadvantages and existential dread as well.

Housing costs. Aside from housing, Gen Z are materially better off in every other way. They earn higher real incomes than previous generations at the same stage in their life.

As the parent of kids spanning an age range through imminent high-school graduate, I can assure you there's not much thought given to a "bleak economic outlook" among my kids or their peers.

Now, it's possible—probably likely—that I'm in an economic bubble, but these same kids do suffer from other anxieties and would likely fit the studies.

I've interpreted this argument as a type of cope from leftist types who want to use their phones a bunch and not feel guilty (or alternatively, they have no opinion about phones and just want to use this as a springboard for a political jab)