Why Americans Dislike the Economy

[Michie]

With real wages at 2015 levels, life milestones, such as buying a home, are increasingly unachievable.

“Why are the vibes so bad?” ask legions of commentators, noting the disconnect between polling on the economy and top-level economic indicators. The unemployment rate is within spitting distance of 60-year lows, and measured inflation has dropped from a punishingly high 9 percent rate to a lower, though still too high, 3.2 percent.

And yet, citizens are unhappy with the economy. According to a New York Times–Siena poll, 81 percent of registered voters described the condition of the economy as fair or poor, and only 19 percent called it good or excellent. Another poll, conducted by the Financial Times and the University of Michigan, found that a majority of voters said that they are worse off under President Biden then they were before, and only 14 percent said that they are better off. By a 59 percent to 37 percent margin, the Times–Siena poll found voters trusting Donald Trump more than President Biden on the economy.

To reconcile voters’ discontent with the economic data, we shouldn’t consider the top-level employment and inflation indicators separately. Instead, we should combine them—and when we do, we observe workers’ real (that is, after inflation) wages have declined significantly in recent years.

Some commentators argue that real wages are rising, but these claims are based on the popular average hourly earnings measure from the Bureau of Labor Statistics’ Current Employment Statistics. Average hourly earnings is a less useful indicator now because of large workforce-composition changes. During the pandemic, the economy shed large numbers of low-paying service jobs (for instance, in leisure and hospitality), which pushed the average wage in the economy higher. The average moved up because low-paying jobs dropped from BLS’s sample, not because individuals experienced strong wage growth. The effect reversed as the economy began adding those low-paying service jobs back, which pushed average hourly earnings down. Those composition effects linger today, as the economy is still short 560,000 leisure and hospitality jobs (adjusting for labor-force growth), relative to pre-pandemic levels, due largely to firms’ difficulty finding workers.

Continued below.

Why Americans Dislike the Economy

With real wages at 2015 levels, life milestones, such as buying a home, are increasingly unachievable.

www.city-journal.org

 

[The Barbarian]

Those composition effects linger today, as the economy is still short 560,000 leisure and hospitality jobs (adjusting for labor-force growth), relative to pre-pandemic levels, due largely to firms’ difficulty finding workers.

They don't have trouble finding workers. Costco seems to be able to get all they need. Those other businesses are having trouble hiring people at $8 an hour. Go figure.

 

[Wolseley]

A lot of the problem stems from people refusing to work 16-hour days and mandatory overtime on weekends under crappy conditions for less than $15.00 an hour. There is, of course, also the aspect of requirements of coming in to an office when the work can just as easily be done from home---and let us not, ever, discount the fact that a lot of people just simply refuse to work for your average middle- to upper-manager, who is usually an egotistic idiot with an MBA, a vastly bloated sense of his own importance, and the intelligence level of a paramecium.

Worked for a lot of those guys. They had corner offices with plaques on the doors and attitudes. When it came to the actual job at hand, however, usually they couldn't locate their own behinds with both hands and a compass---their decisions were either completely unrealistic or magnificently disastrous, and usually both.

SOOO glad I'm retired.

 

[The Barbarian]

A lot of the problem stems from people refusing to work 16-hour days and mandatory overtime on weekends under crappy conditions for less than $15.00 an hour. There is, of course, also the aspect of requirements of coming in to an office when the work can just as easily be done from home---and let us not, ever, discount the fact that a lot of people just simply refuse to work for your average middle- to upper-manager, who is usually an egotistic idiot with an MBA, a vastly bloated sense of his own importance, and the intelligence level of a paramecium.

That's the collision of reality with the pandemic. As it became clear that employees working at home were generally at least as productive as they were at the office, middle management began to panic, fearing that upper management would realize that the organization was top-heavy with managers who were contributing little to the bottom line.

Top-Heavy Organizational Structures

Top-heavy organizational structures refer to companies with too many managers, which mean too many presidents, vice presidents and other mid-level managers between the president and the junior worker. A top-heavy structure could imply too many administrative support personnel, who do not...

smallbusiness.chron.com

Hence frantic attempts to get people back from working at home. And the stubborn resistance of such workers, realizing that working at home was essentially a raise, because commuting costs went away.