The US economy is doing well. President Biden wants to know why so many Americans are still feeling bad
The US economy is doing well. President Biden wants to know why so many Americans are still feeling bad
By many metrics, the US economy is humming along. The jobs market is robust; consumers are spending again; and inflation has eased to a three-year low.
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I’m also not sure how relevant my experience is to this whole thing since my work experience is 100% contract work in a specialized field instead of salaried or employer scheduled. From my perspective everything is becoming gig work, but that might not be the case. I think it’s hard to budget for groceries getting more expensive if one year I make 85k and the year after, I make 25k. Employers just don’t seem to have as much money to spend on advertising as they used to, so finding work is hard unless you take less than what you’re used to taking.
All my peers seem to be having issues with finances nowadays unless their parents are helping them out or have a partner making quite a bit as well. Combine that with businesses forcing the end of work from home means we have to move back to expensive cities. It’s looking pretty bleak even from my pretty privileged vantage point.
One thing to keep in mind is that you may not be in the bottom quintile. And if you're not, then you may have a very different view of the economy.
Income inequality is decreasing right now, but many people don't understand that this necessarily involves some zero-sum adjustments. You cannot reduce inequality if everyone grows at the same rate, something must be transferred from the upper X% to the lower X%. And if you're in the upper X%, then the economy might feel worse to you than it really is.
I’d be interested to see a source on if income inequality is decreasing because I haven’t seen any articles about that tbh. In fact, since 2020 when I last looked at graphs on it, it’s seemed like the gap is just getting wider and wider every year.
And if I was told things would get harder for me and other people in my bracket to make it easier for people making less than me, I’d be fine with it, but I’m not seeing an indication that that is what’s happening. But to be honest, so long as I’m seeing record profits for corporations and billionaires continuing to breathe, I’ll continue to think income inequality is continuing to get worse regardless of a study that states the contrary.
Reduction in income inequality started under Biden, after 2020
But there’s some pretty good news that doesn’t readily appear in the steady stream of government data released each week. After decades in which the gap between the richest and poorest Americans grew by leaps and bounds, the strange rebound from the pandemic has led to something different: a slow reduction in inequality across the economy. Incomes of people in the bottom half of income distribution grew by 4.5% in the last calendar year, much faster than the 1.2% average income growth of all Americans
Looking at the Realtime Inequality source, I think the picture is a bit less rosy than the article gives it, if I’m reading the graphs correctly. It looks like the bottom 50% were absolutely financially destroyed during 2020 (as was everyone else) and measures have been taken to place them relatively close to where they were before the pandemic. But the upper class not only didn’t fall as hard as the bottom 50%, but they recovered to a higher level than they were previous.
To me, this seems like “the income inequality train is slowing down” rather than “the income inequality train is going in reverse”. That being said, I’m a dummy when it comes to economics, so I might not know how to read this correctly.
Note that the y-axis is income growth. Staying at zero means "no change". So it's more accurate to say that before late 2021 the bottom 90% stagnated (or slightly lost income) while the upper 10% grew, seemingly oblivious to hardship.
After late 2021, the income of the bottom 50% grew faster than the top 50% (or top 10%). That is exactly what is meant by "inequality is finally decreasing", because the only way for two extremes to get closer together is for the bottom extreme to grow faster than the top extreme.
Faster growth among the highest incomes is a longstanding feature in our economy, and this differential growth means that income inequality has almost always been increasing. Faster growth among the lowest incomes, ie any period of decreasing inequality, is practically unheard of in recent American history.
I do think it’s possible to make statistics claim anything you want if you categorize the positions you’re comparing in a way that supports what you want to claim. All I know is people generally don’t feel like they’re doing better economically whether it’s the honest fact or not. And if I’m having issues with groceries, those who make less than me must be struggling more.
If feelings are more important than statistics, then government should make less effort to reduce inequality and more effort to get people to feel good about the status quo. In other words, do what the GOP does when they are in power.
The thing is statistics can say anything so they’re nearly meaningless if someone has a motive for presenting the statistics in a particular way. But so long as we’re making comparisons, going to bat for the party in power and refusing to listen to valid complaints from people is also pretty similar to the GOP and Republican voters.
Considering the article I posted contradicts yours, I find it hard to believe either 100%. I trust the people who are having trouble buying medicine, rent, or groceries over some article telling me some carefully crafted statistic on why things really are good and we should just stop complaining or protesting about anything and everything. Essentially, it’s just an appeal to status quo to present specific statistics in a way that makes things seem rosy to contradict those who think otherwise.
Considering the article I posted contradicts yours
The article you posted does not contradict mine. Yours says that inequality is higher in 2022 than in 2019. The one I posted said inequality began to decrease in late 2021. Both can be true. Inequality may finally be decreasing after decades of relentless increase, yet remain higher than it was in 2019.
statistics can say anything so they’re nearly meaningless
People can certainly misinterpret statistics. If you think that's the case, then you should examine the methods and data and propose a better interpretation.
Dismissing data that do not match personal experience is how you end up with science deniers (e.g. "It's 20 below in Chicago, so much for global warming!", "Nobody I know has died of covid so I don't need a vaccine!")
we should just stop complaining
Nobody said you should stop complaining. But complaining without a solution in mind is pointless. And data suggest that Biden has made more progress towards a solution than previous presidents, or his opponent.
When your link says when the bottom 50% has increased faster than every other group except the top 1%, the fact still stands that income inequality is getting worse. And a misleading title on top of that. All of us in the middle are just stagnating and you’re seeing that as a win because the poorest and most vulnerable were given crumbs? Also the article mentions that the gains of the lower class might not last long because that gain is due to covid stimulus programs.
Corporate profits have risen 25%-30% and the value of the dollar has lost 18% of its value since 2020. Something is wrong.