July 29, 2024
That’s what Trump would be saying if we had the exact same economy, and every Republican and politician in the country would be repeating some variant of that line. The media would be filled with stories commenting on how the strong economy will make it difficult for the Democrats to win in November.
But that’s not what we’re seeing now. Instead, the media are constantly telling us about the bad economy, even when they have to misrepresent the data in fundamental ways to make their case.
For example, the Washington Post had a piece last week telling us in its subhead that homelessness was at a record high. The focus was that increasingly the homeless are people with jobs. Bloomberg News Service told us things were bad because the number of multiple jobholders hit a record high, although not as a share of employment. That figure hit a peak in 2019, at the top of the pre-pandemic Trump economy. And for its July 4th economy piece the New York Times deliberately found an atypical worker to tell us that people at the bottom have it tough.
Ordinarily, I am happy to see the media highlight the situation of the people who are struggling in this country. We could and should do far better in ensuring that people have the necessities of life. I have also written endlessly on how the rules of the economy have been deliberately rigged to redistribute income from ordinary workers to those at the top.
This rigging is most visible with trade policy where we have quite explicitly had a policy of putting manufacturing workers in direct competition with low-paid workers in the developing world. This had the predicted and actual effect of lowering their pay. Since manufacturing has historically been a source of high-paying jobs for workers without college degrees, this trade policy lowered the relative pay of non college-educated workers more generally.
Contrary to what is widely claimed, this policy was not free trade. We did virtually nothing to reduce the barriers that protect the most highly paid professionals, such as doctors and dentists, from foreign competition. We also used these trade deals to make government-granted patent and copyright monopolies longer and stronger. These monopolies redistribute over $1 trillion a year to people at the top end of the income distribution.
Given this reality, I appreciate it when the media point out that many people are not doing well in the economy. The problem with reporting in recent years is that when we actually have taken huge steps to reverse the rise in inequality over the last half-century. For some reason, the media now seem to be endlessly focused on highlighting the negative, even when it has to turn reality on its head to make its case.
Turning Reality on Its Head
Starting with the Washington Post piece, the homeless situation in this country is a disaster, but this is not a new disaster. While the Post tells us homelessness is at a record high its data only go back to 2007, so we don’t have a long comparison period.
Also, the notion of a record high is a bit dubious. The number of people without housing was reported at 653,100 at the start of 2023. It was 647,000 back in 2007. The US population was roughly 11 percent smaller in 2007, so measured as a share of the population, the homeless were 0.21 percent in 2007. They were 0.19 percent of the population at the start of 2023.
Other aspects of the piece were also misleading. Its focus is a big spike from January 2022 to January 2023. That is a bad story, but it is likely that much of the explanation for this rise was the ending of a number of programs, such as expanded Child Tax Credit, rental assistance, and an eviction moratorium, that were part of the Biden administration’s recovery package. In that case, the culprit wasn’t just bad things happening to people, but the ending of social programs that made their lives better.
It would have been useful to make this point. We can have policies that reduce homelessness if there is the political will to implement them.
The piece correctly notes that the main problem is rising rents. This is true, but it is largely the result of a plunge in construction following the collapse of the housing bubble in 2008, which has persisted to the present. Rents have consistently outpaced overall inflation through this 16-year period, although they seem to be slowing sharply now.
There was a spike in rents during the pandemic, which is not mentioned in this piece, due to a huge increase in people working from home and looking for more space. It might have been useful to include this fact if the point was to explain the underlying problem.
It’s also worth noting that the phenomenon of working people being homeless is not new. The piece presents several instances of workers newly finding themselves without housing, but the Post could have written the same piece in 2019 if it had wanted to since there were plenty of workers who were homeless that year as well.
Multiple Jobholding as Evidence of a Bad Economy
The idea that people holding multiple jobs as evidence of a bad economy is a recurring theme in reporting on the Biden economy. It is truly bizarre, since it can also be evidence that people who want to work more hours now have the opportunity to do so. The fact that the number of multiple jobholders rose in the recovery from the Great Recession and peaked as a share of total employment at the business cycle in 2019, would seem to support that view.
It’s also worth noting that 36 percent of multiple jobholders report that they are working remotely. Since the opportunities for remote work have hugely expanded since the pandemic, many current multiple jobholders are likely taking advantage of opportunities that had not previously existed.
The Washington Post and Marketplace Radio even invented a new category to measure economic misery, the number of people holding two full-time jobs. An important fact undermining this story is that this number also seems to be cyclical, with the share rising with the upturn in the last business cycle. The all-time peak was in 2000 at the peak of the late 1990s boom.
Seeking Out an Atypical Worker to Tell an Independence Day Bad Economy Story
I always thought that the people highlighted in news stories were supposed to be representative of a larger group of people. The New York Times showed me otherwise.
It found a low-wage worker, who it acknowledged was atypical, to highlight in a piece headlined, “America’s divided summer economy is coming to an airport or hotel near you.” To emphasize the Times’ agenda in this article the subhead was “The gulf between higher- and low-income consumers has been widening for years, but it is expected to show up clearly in this travel season.”
The problem with this story is that the reality is the exact opposite. As noted earlier, wages for workers at the bottom end of the wage distribution have been rising faster than for those higher up.
Nonetheless, there will always be many people who do worse than the average for workers at any point in the wage distribution and the NYT found one.
“Lashonda Barber, an airport worker in Charlotte, N.C., is among those feeling the pinch. She will spend her summer on planes, but she won’t be leaving the airport for vacation.
“Ms. Barber, 42, makes $19 per hour, 40 hours per week, driving a trash truck that cleans up after international flights. It is a difficult position: The tarmac is sweltering in the Southern summer sun; the rubbish bags are heavy. And while it’s poised to be a busy summer, Ms. Barber’s job is increasingly failing to pay the bills. Both prices and her home taxes are up notably, but she is making just $1 an hour more than she was when she started the gig five years ago.”
A typical worker at Ms. Barber’s point in the income distribution saw an increase in their nominal wage (before adjusting for inflation) of 30.4 percent over the last five years. This means that if she were a representative low-wage worker she would have seen a pay hike of around $5.40 an hour rather than the $1.00 increase reported in the article.
Incredibly, the piece even acknowledges this fact.
“While that is not the standard experience — overall, wages for lower-income people have grown faster than inflation since at least late 2022 — it is a reminder that behind the averages, some people are falling behind.”
So the NYT deliberately sought out an atypical person so it could tell a bad economy story.
Are There Any Good Economy Stories?
As even Larry Summers now concedes (Summers had been a harsh critic of the Biden administration’s recovery package), the US recovery from the pandemic has been remarkable, far better than any other wealthy country. Given this reality, it seems that there would be many opportunities for the media to highlight people benefitting from the strong recovery.
We saw the unemployment rate for Black workers and Black teens hit an all-time low. While the unemployment rate for both was still higher than for white workers (we haven’t eliminated discrimination) millions of people benefitted from the drop in unemployment. The same applies to Hispanic American workers who saw their unemployment rate tie the previous low.
The relatively rapid wage growth at the lower end of the wage distribution should mean that many people have seen improvements in their living standards. To be clear, someone earning $20 an hour, who had been earning $15 an hour five years ago, is not doing great by any measure, but they have seen a substantial gain in real wages.
We also had a record number of people quit jobs and take new ones in the tight labor market of 2022 and the start of 2023. Presumably many of these workers have found jobs they like better and offer greater opportunities for advancement.
We also had record numbers of new businesses being formed, with a disproportionate share being owned by woman and other underrepresented groups. That story has also been largely absent from reporting on the economy.
The US has a huge economy with almost 160 million workers. It is always possible to find people who are doing poorly. That will be true even in the best of times. It is always possible to find people who are doing well in the worst of times.
When the economic data overwhelmingly suggest a strong economy, where people are mostly doing quite well even as we struggle to overcome the effects of a once-in-a-century pandemic, the media have overwhelmingly chosen to highlight the bad stories. We can argue about motives, but we have seen stories where reality literally had to be turned on its head to tell a bad economy story. That is not good reporting.
Comments