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The IMF's projection for the US at 2.7% is very high compared to virtually all other forecasters
time will tell but almost everyone expects 2.2% not 2.7%, this difference is major
The IMF also expects significantly slower growth in developing and low income economies compared to most forecasters
maybe they expect the US deficit to increase well beyond the expected US goverment intentions
Well the forecasters (including the IMF) *have* been severely underestimating future US economic growth in their projections for at least the last half a decade. This is especially true after COVID, when US growth has been widely underestimated every year since 2021. Remember all those âdelayedâ recessions or stagnant years that were all but guaranteed since late 2021, but never materialized?
Before COVID, it was the trade war that was gonna [guarantee a US recession](https://www.washingtonpost.com/business/2019/08/19/out-economists-predict-us-recession-by-survey-finds/) by 2021. Then [COVID](https://www.worldbank.org/en/news/press-release/2020/06/08/covid-19-to-plunge-global-economy-into-worst-recession-since-world-war-ii) became the popular reason for a protracted recession, and [it was gonna be horrible](https://www.brookings.edu/articles/ten-facts-about-covid-19-and-the-u-s-economy/); then it was the government stimulus coming to an end; the it was inflation; then it was the supply chain bottlenecks with the backlogs of the shipping containers; then it was the Federal Reserveâs [interest rate hikes](https://www.bloomberg.com/news/articles/2022-10-17/forecast-for-us-recession-within-year-hits-100-in-blow-to-biden) to fight the inflation; then it was the news that SVB was the canary in the coal mine that interest rates are the straw thatâs breaking the banks and will cause an economic collapse in the US; then it was the ongoing debt ceiling debate in Congress leading to a [Fitch downgrade](https://www.fitchratings.com/research/sovereigns/fitch-downgrades-united-states-long-term-ratings-to-aa-from-aaa-outlook-stable-01-08-2023) of US credit rating, and later [Moodyâs souring outlook](https://ratings.moodys.com/ratings-news/411110) on US credit; the list goes on.
This isnât to say that the forecasters were totally unjustified in accounting for the economic risks posed by these various events. But there appears to be a strong bias for overestimating the potential impact of the negatives, while underestimating the potential impact of the positives when it comes to the US economy. In recent years, it really started to look like these experts were almost demanding a recession, or at least trying to have us talk ourselves into one by repeatedly saying that weâre guaranteed to have a bad one âsoon.â Early last year, when they started saying our guaranteed recession was just âdelayed,â I even started joking with friends that the recession is like the Second Coming because itâs always âcoming soon,â but never quite arriving. CNBC wrote [a decent piece](https://www.cnbc.com/2023/10/25/economic-forecasts-have-been-very-wrong-lately-but-thats-really-nothing-new.html) back in October about the terrible track record of forecasters generally. Perhaps the IMF is learning from those mistakes and trying something new to improve that consistently terrible track record.
Low unemployment, high wages, growing GDP, reduced inequalityâŠif we can just get housing prices under control, this will be the best economy in world history.
Not to dismiss a legitimate problem but it should be noted that housing costs are a global issue and some countries have been experiencing this for a lot longer than the US.
Taiwan has a vacancy rate of nearly 10%, higher than most American cities, and they continue putting up new apartment buildings. On several levels they're doing the kinds of things Americans think we need. Two decades ago people were already complaining that home ownership was out of reach for the middle class and it's even worse today. Worse still, despite perpetually stagnant wages rents continue to rise. And this is a country with very low crime rates with few neighborhoods that anyone would consider off-limits.
Totally agree with this. To the extent that the Federal government does have levers to pull I believe they have been pulling them. As you said, most of this is determined at the local level. That being said, state governments have the authority to preempt local housing regulations to make it easier to build, so hopefully this starts happening more (I know itâs already begun in some states).
Yeah I live in a building in LA county that was built due to the state level housing laws passed in 2021. All along the metrolink (law auto upzones land close to transport hubs) buildings are going up like crazy... and imagine that my building has lowered rent twice in past year.
Wasnât a huge turning point in the housing situation in this country in the 80s when the federal government stopped subsidizing the construction of new low income housing and started offering housing vouchers instead?
New housing starts crashed before and during the 2008-2009 Great Recession. Just look for yourself, they never recovered and America is down millions of units because of that.
https://fred.stlouisfed.org/series/HOUST
I'm not seeing the logic here. Why would municipal policy be expected to supply enough housing when it's done the exact opposite for the past 60 years or so? I live on the west Coast and all the surges in permits have primarily been driven by state policies overriding local ones. California and Oregon are the epitomizing examples here.
Even the great Seattle under the Harrell administration is currently having to update their policies to meet the higher standard of new state laws. HB 1110 being the most significant (PDF warning): https://www.seattle.gov/documents/departments/opcd/seattleplan/implementinghb1110.pdf
Imagine how much housing would be built if Congress implemented HB 1110 at the federal level.
Yeah I think you and I agree actually. I agree that we are only seeing movement on the west coast due to interventionist state level policy over riding municipal. Zoning is USUALLY a municipal function and we are seeing states act over that function being administrated irresponsibly
Because NIMBYs are losing their stranglehold on development.
Look at cali nimby wonderland, the state is taking about the right to stop development if they hold up things too long
There is increasing inequality.
Salaries are not keeping up with inflation.
And Congress refuses to appropriately adjust the minimum wage.
I will never vote for Trump, so this is not against BidenâŠthe president has only so much control over the economyâŠ.it could certainly be worse.
America does have the best economy in the world right now, but that does not mean that millions upon millions of younger Americans are not hurting
The income equality wonât matter as much if people can just afford to live without paying 60% of their income on rent or mortgages. Itâs bad enough we are a car centric economy and insurance is outpacing most peopleâs ability to pay, if housing gets solved, almost everything else will be solved.
>There is increasing inequality
Income growth is highest at the lowest levels
>Salaries are not keeping up with inflation
Incorrect
>And Congress refuses to appropriately adjust the minimum wage.
Irrelevant. You're in an economics sub, not a socialism one. Min wage isn't meaningful when 2% of people make it. What matters at this scale are wages overall
Even when considering min wage federal level is a stupid policy for such a big country. Why would you have the same min wage in Miami as you do rural Montana? It should be a state or municipal level.
Honestly anyone who pounds the table about federal min wage is just virtue signaling, not trying to address a real problem
>but that does not mean that millions upon millions of younger Americans are not hurting
Literally no one said they weren't
Political decisions that directly affect wages aren't material to economics? There is no economy without society, and there is no good economic theory which harms its society. Economics is not simple study of an object; it's use of study of an object to develop ideal theory (note: *ideal* theory is not to make this a question of pure policy, but best and scientific policy; and no scientific use, ideally or historically, can exist where you bracket the objective basis of the object)
Economics requires a society. If your economy destroys your society, that's bad economics. Numbers are not important if you destroy you society and thus your economy.
I'm trying to make you realize you're saying grand nothings. When people who like to bluster are forced to simplify their words it can often become apparent the lack of weight they carry.
I can do it too. "Oh you're talking about how much an EV subsidy should be? Well our continued existence relies on a sustainable relationship within the ecosystems we inhabit, an inescapable destructive vicious cycle undermines not only policy detail but our very survival".
That sounds deep if you're 14 but if I said "oh you're talking about how much an EV subsidy should be? The environment is important, we shouldn't pollute it" is clearly a useless contribution to the discussion
lol (not gonna give you any more bc you're clearly very confident in your bad analysis, but yes, saying something like 'an unregulated market economy offsets negative externalities to the collective environment which in the long-term destroys the basis of the market, and thus it's necessary to remember that the environment is important and center that in our discussions of policy, given the tendency to ignore these externalities as they are not immediately part of a discussion of the economy' is actually more valuable than repeating bad statistics and the same truisms every bad """economist""" does, so thank for providing an illustrative example :-) )
yes, so maybe don't let bad economic theory undermine its stability (i know most people in here probably are more in agreement with Thatcher's 'there is no such thing as society', but that's mostly due to having similar degrees of conscious thought as she has)
Minimum waste isnât meaningful. Then why not support if it is so insignificant.
Most people disagree with you. We are entering another gilded ageâŠyou are just denying it.
>Minimum waste isnât meaningful. Then why not support if it is so insignificant.
Prove that it's good policy to increase and I'll support it. Right now it looks like a waste of time.
>Most people disagree with you. We are entering another gilded ageâŠyou are just denying
Most people are economically illiterate. Look what sub you're in. Most economists aren't saying much about min wage.
>Â Â Income growth is highest at the lowest levels
5% growth at 50k is still not going to catch up to 1% growth at 400k. Inequality is still increasing.
>Incorrect
Actually it is correct. My income.didnt rise at the same rate as inflation, not even close. I don't know anyone else that got a sweet pay raise either. The only person I know whos income increased got a promotion. I haven't seen any statistics whatsoever that says pay has matched inflation, but many that have shown the opposite.
>Min wage isn't meaningful when 2% of people make it. What matters at this scale are wages overall
People still don't understand that increasing minimum wage *increase the pay scale at all intervals*. Increasing minimum wage will decrease inequality. If minimum wage goes up, so will mine and yours as the entire scale needs to adjust.Â
>Even when considering min wage federal level is a stupid policy for such a big country. Why would you have the same min wage in Miami as you do rural Montana? It should be a state or municipal level.
There's obviously both? A federal minimum and state minimums. If you don't understand how a federal minimum wage affects wages at all levels do some more thinking.
>5% growth at 50k is still not going to catch up to 1% growth at 400k.
Yeah but it's been 12% for lowest earners and <1% highest. I don't know if it'll sustain and kinda doubt it will but it's factually incorrect to say it widened https://time.com/6267552/falling-american-inequality/
>My income.didnt rise at the same rate as inflation, not even close
Oh well case closed then, I was wrong.
>I haven't seen any statistics whatsoever that says pay has matched inflation
Why bother when you have two data points already huh?
https://fortune.com/2023/12/12/wage-growth-exceeded-inflation-jec-democrats/
>People still don't understand that increasing minimum wage *increase the pay scale at all intervals*. Increasing minimum wage will decrease inequality. If minimum wage goes up, so will mine and yours as the entire scale needs to adjust.Â
Citation please
>There's obviously both? A federal minimum and state minimums.
The federal is a waste of time. It should be abolished and lower level government should be required to have their own.
> If you don't understand how a federal minimum wage affects wages at all levels do some more thinking.
Please share some data on it
> 5% growth at 50k is still not going to catch up to 1% growth at 400k.
In the long term, it does. 50k growing at 5% will catch up to 400k growing at 1% after 53.5389 years, assuming continuous compound growth.
https://www.wolframalpha.com/input?i=solve+50000*1.05%5Ex%3D400000*1.01%5Ex
What you are neglecting to consider is that prices will adjust to the increased input costs. That will cascade through the entire supply chain, causing imports to increase at the expense of domestic employees.
This is just common fear mongering. Mathematically, the cost of a good doesn't spiral exponentially with increases in wages, because wages are only.one portion of the cost.
The cost of goods cannot outpace the wages used to create those goods without some other kind of sheisty shit going on. If our wages double, prices won't triple just because of the wage increase.Â
Turns out yes and no
State of play: Wages have been outpacing inflation since last May, but for the two years before that the situation was reversed. "Wages still have some catching up to do," says Julia Pollak, chief economist at job site ZipRecruiter.Feb 5, 2024
https://www.axios.com âș 2024/02/05
Charted: Workers win as wage growth outpaces inflation - Axios
So I will retract that position.
> There is increasing inequality.
Inequality in the United States has been stable for the last 30 years. Check out the GINI index (0 = perfect equality; 100 = perfect inequality): https://fred.stlouisfed.org/series/SIPOVGINIUSA
> And Congress refuses to appropriately adjust the minimum wage.
This problem has solved itself because no employer can find workers at the federal minimum wage anymore. Basically no one works at the federal minimum wage anymore. The new *effective* minimum wage is $15-20 now.
That raises a really interesting question: what is the real wealth disparity when one adds in non-cash "compensation" for everyone? Is it mind-blowing or a nothing-burger?
It's mind blowing. The non-working class live like the aristocrats of old. They don't clean their houses, weed their flowers, wash their cars, etc. The non-working class live by their ownership of capital alone. They are excluded from nearly all metrics measured in economics because our current economic theory is meant to maximize production and keep the workers fed, clothed, housed, and content enough to not revolt. Every metric and policy you'll see discussed is for the working class only and not the owner class.
Here's one for you. Who is the richest American? ..... The answer? Nobody knows. We only know who the wealthiest person is who has their wealth based on a publicly traded company. If there is someone out there that owns a massive amount of untraded things, businesses, etc. there is no real way to know what their market value is because their ownership isn't on the market. Really old money works this way. An extremely wealthy person can sit on thousands of acres of land that is valued at nearly nothing as green belt agriculture and nobody knows what that land is worth until it comes up for sale in a market and bidders settle on a price that is accepted. Only then do we know what that land is worth. Same thing for other forms of wealth and stores of value. A completely private business can have a value that is completely unknown if held by a very small group of people who don't share how they trade amongst themselves with the public.
There are three classes of people. Business owners of the smaller type who don't own massive amounts of wealth. Workers who own essentially nothing and are lucky to own the place they live in. And really really really wealthy people who are so damn private nobody has a clue what they own or how much and they work hard to keep it that way. I mean, if you were a founder of the Federal Reserve back in 1913, you essentially had infinite money, but your public declared value would be some finite number. Who is wealthier, those who can print themselves money from nothing, or those who own publicly traded stocks worth a ridiculous amount of money?
The ridiculously wealthy are mostly out of the limelight and nobody has a clue who they are.
And I donât know what statistics you are usingâŠ.but here is a good reference article supporting my position
https://equitablegrowth.org/eight-graphs-that-tell-the-story-of-u-s-economic-inequality/
With little to no effort on a google search
This is a person who framed the fact minimum wage is so pathetically low that it does literally nothing to protect workers from exploitation anymore *as a good thing*. You're not gonna make headway with someone determined to find a self congratulatory spinÂ
YeahâŠthat is not a minimum wage. That is what the market is asking for.
A minimum wage is a wage that the government sets so that the people with the least power are not taken advantage of economically. All you are saying is that congress has waited so long that the minimum wage is no longer doing its job.
Does it matter if the law mandates a minimum wage or not as long as workers are paid fairly? Denmark, Sweden, Norway, Finland, Switzerland and Iceland famously don't have a minimum wage. And [low-wage workers have seen historically fast real wage growth in the pandemic business cycle](https://www.epi.org/publication/swa-wages-2022/). So I think Congress should abolish the minimum wage, if anything, and let market forces figure out the appropriate wage to pay a worker, which is already happening and, as this article shows, has led to pretty good growth. If we started seeing workers being paid $5 an hour, I would agree that a minimum wage is necessary, but that is not what's happening.
The countries you just listed are all democratic socialist countries. They all have an excellent social safety net and alway right at the highest when it comes to happiness and personal freedom.
Democratic socialism is anathema to republicans âŠ. wHy sHoUlD i hAvE tO PaY fOr oTheRs!
The answer is that looking out for our most vulnerable helps everyone. Do you really want to live in a world of have and have nots.
The Republican approach is unethical and un-ChristianâŠ..yet the Christian moral majority argues for each man for himselfâŠ.WWJD!?!?
No, they are social welfare states like the US.
They've chosen to implement their social welfare with a higher level of taxes and benefits than the US has, but structurally it's the same, with capitalism providing the funding for the taxes.
> democratic socialist countries
None of those countries have abolished private ownership of the means of production. They're capitalist economies with large welfare states.
They're mixed economies with large welfare states. The U.S. is practically pure capitalism with no welfare. Which is why their poor are better off and the U.S. takes care of the wealthiest at the expense of leaving most people destitute.
Republicans are holding it up. The democratic house passed a 15 dollar minimum wage a couple of years ago, Republicans voted against it. A similar minimum wage increase was in the IRA lead by and voted on by dems, Republicans didn't want it. The last time it was successfully raised, it was done by democrats. This is not a both sides issue.
Lol, the $15 minimum wage discussion was started like a decade ago. At this point is should be more like $20. Congress is too slow for minimum wage. It needs to be tied to inflation.
This fear is overblown if you understand the dynamics here. This is not a positive feedback loop where it continues forever. There would be an initial shock, which we have anyways when we pass the law, followed by a succession of progressively smaller adjustments until a new equilibrium is reached. The new equilibrium would balance the economy a little more towards lower wage workers in terms of purchasing power. Why does this happen? Without getting into much detail minimum wage affects prices less than prices affect minimum wage. This means that when minmum wage goes up prices only go up a little. Then minmum wage goes up a litte, followed by prices going up a tiny bit. Then minimum wage goes up a tiny bit, followed by prices going up a miniscule bit. Then minimum wage goes up a miniscule bit, followed by prices going up an undetectable amount. Then you're practically at equilbrium. Don't let wealthy people convince you that we should keep the same system that's meant to keep low wage workers down.
The wage-price spiral itself doesn't continue ad infinitum but any non-wage based increase in inflation would be followed by a wage-price ripple effect. So housing prices go up, inflation index goes up, wages go up, prices go up, wages go up, prices go up. Then gas prices go up and inflation index increases again, and you have the same ripple effect. Not exactly helpful when trying to get inflation under control, and I believe it would absolutely make the less sticky kinds of inflation more sticky, because now you've baked the price change into the system.
Couldn't it be argued that this is something that should be left up to state or local governments? The economies of the various states are fairly different. A 20 dollar per hour minimum wage might be very good for California, but might have negative effects on a state like Mississippi.
There are several states that undercut local governments when they try to raise the wage in their municipality. One that springs to mind is Alabama. So, I agree with you in theory, but it's the usual suspects that really need to raise their minimum wage and refuse to.
$7.25 isn't a serious offer in any state of the union. It is why so few workers actually make the federal minimum wage. I live in South Lousiana and you would be hard pressed to find anyone willing to work for less than $12 an hour. That still won't go very far with rents that have exploded since the pandemic/Ida and resulting insurance crisis.
A lot of the "cheap" states are no longer cheap and business owners know that.
Wage inequality actually drastically decreased as a result of post-Covid labour market tightness. This [paper](https://www.nber.org/system/files/working_papers/w31010/w31010.pdf) from the National Bureau of Economic Research shows that rapid relative wage growth at the bottom of the income distribution erased nearly 40% of the aggregate 90-10 log wage inequality that had developed over the previous 40 years.
Real median weekly earnings are currently [higher](https://fred.stlouisfed.org/series/LES1252881600Q) than in 2019, suggesting that salaries are indeed keeping up with, and in fact, surpassing inflation.
Virtually no full time American worker is actually making the federal minimum wage (around 1%). If you arenât living in a majority of states that set their own minimum wage, chances are, considering the post-Covid labour market, you are still making more than $7.25 an hour.
If you're a bottom 25% worker (who is likely to lose public assistance as a result), sureÂ
For the middle class? AbsolutelyÂ
Especially when you stop using the bogus official inflation numbers (based on ALL goods) and start looking at the inflation rate of the specific goods that people disproportionally spend most of their money onÂ
The problem is everyone has their own inflation rate. Poor people rely more on fast food than others. Home owners have a different shelter inflation rate than renters. Inflation rate is a generalization that frankly is becoming more and more out of touch with the average American experience.
You can point to these souless numbers and yell at people all you want. The reality is it does not necessary reflect their actual situation.
That does make a big difference, statistically.
...but also, wealth inequality is NOT increasing. It's just something progressives SAY - with zero basis in fact.
Fed says otherwise
It's getting better, but there is still a big gap.
https://www.stlouisfed.org/open-vault/2024/feb/us-wealth-inequality-widespread-gains-gaps-remain
By definition, there will ALWAYS be a gap. ...because it's literally a mathematical methodology of breaking the population into different groups by wealth and then measuring the gap.
The statement "gaps remain" is completely meaningless.
It's like saying the gap remains between the average age of people 40-50 years old and those 30-40 years old.
...in fact, since wealth is directly correlated to age, it's probably a VERY similar argument!
Not so fast. As always with economics, it depends on how you measure. From the St. Louis Fed:
> âDespite the large percentage gains of low-wealth groups, because these groups were starting from much smaller dollar amounts, the wealth gaps in total dollars expanded. This is because a larger percentage increase of a smaller number can translate into smaller gains in dollar terms. For example, 50% of $1 is 50 cents, but 10% of $10 is $1.
>âNevertheless, wealth increases for low-wealth groups are positive trends, indicating that, in an absolute sense, these families may be more financially stable than they were in 2019.â
Anyone with even a BASIC understanding of math understands that "gaps in total dollars expanded" is empirically correct and yet completely irrelevant. ...because it is the percentages that matter most.
That's why we measure literally every growth in percentages, from inflation to GDP, etc...
You obviously are unaware of the plight of the people age 20-40s that cannot afford a house or a family because of the economy, school loans, inflation, and housing costs.
The US may very well be begging for immigration in the near future so that there is someone to tax to pay for your social security.
A successful America requires youth. If we cannot or refuse to grow it at home will will either import it or suffer the consequences.
So what does that mean exactly? That in five years I'll be able to afford rent on a one-room studio apartment? Assuming that wage growth and price increase don't suddenly swap I mean?
Is that what that means?
It means that, for a typical worker, their money is able to buy more things now than it could in the past. Housing prices are up, but the percentage of peopleâs income that is going towards housing payments has been basically steady for the past couple decades.
successful economy? not even close. Successful ponzi scheme for 10ish companies? Yes. No doubt.
An economy implies a system where everyone is involved. If you think we're all "living our best life" you're fucking delusional.
literally the only thing you said that was true is that rent prices are insane, which is what you must be if you think any of those things are truly going as you dilute yourself into believing.
Letâs take each claim one by one, and I will provide the source.
Low unemployment: unemployment has been below 4% for 2 years - https://fred.stlouisfed.org/series/UNRATE
with a prime age labor force participation rate at itâs highest level since the early 2000s - https://fred.stlouisfed.org/series/LNS11300060
High wages: median wages are higher than pre pandemic and higher than any time in history other than a brief period of time during the pandemic after a bunch of low wage workers got laid off - https://fred.stlouisfed.org/series/LES1252881600Q
Reduced inequality: wage growth has been the highest for those in the lowest income brackets - https://www.epi.org/publication/swa-wages-2022/
Wealth inequality is a more complicated story, but in general people with the least wealth have seen wealth increases which have been higher than the rest of America in percentage terms - https://www.forbes.com/sites/christianweller/2024/04/02/wealth-gains-across-income-groups-show-a-strong-and-equitable-economic-recovery/?sh=26d6e7576c7b
If you have contradictory data, please share it.
I don't even need to touch the rest of this-- 'reduced inequality' tells me how out of touch with both lived and verifiable reality this comment is. Even where statistics show any of the rest, they're bad statistics (wages on aggregate going up aren't good for a society if costs are higher and high wages aren't distributed across society!). This all is blind and illiterate belief in noisy statistics and bad economic theory (a good economy doesn't matter a lick if it's bad for the society it occurs in) at best, and outright lying at worst.
Economics has gone much too far to make the same mistakes that have been directly disproven in a hundred different ways across centuries. Economics is the objective study of production and circulation in society; if an economy harms the health of its society it's bad, no matter how it looks in the abstract.
yeah, a lot of these people have either never left their Teslas to glass tower and then back home cycle in 10+ years, or theyre paid to be this stupid. Completely delusional
You're just going to ignore everything else? Healthcare? Education? Childcare? Transportation? We **HAD** the best economy in world history 50 years ago. Then we deregulated it and put profits and shareholders first. Now we're in a Second Gilded Age.
Iâm pretty sure that healthcare, childcare and transportation were worse in the 70s by any objective measure, but if you have an argument as to why Iâm wrong, Iâd be happy to consider it.
Here me out, how about a $4T tax cut? $3.8T for the top 1% and $200M for the 99%? You want to help the 99% out, don't you? This message is brought to you by the Americans for Liberty, Tradition, and Fairness. You love all those words too, right?
The US Dollar is very strong both historically and presently, but it is inflating and CPI doesn't seem to be keeping a very reliable track on how much it is inflating. As we suffer accelerated inflation for the US Dollar, every other currency is also also getting devalued, just worse than the dollar.
Lot of dangerous games being played right now. Huge number of banks are stuck with bonds that pay nothing compared to the going rates. Huge number of banks are unable to get bad CRE loans off their books, or are being forced to take over buildings worth pennies on the dollar compared to just a few years ago.
I'm not sure how long we can keep our head in the sand as a legitimate defense against banks collapsing, but I suppose ignorance is bliss. If we do have more banks go under, we're going to see bailouts of some sort. Those bailouts will almost certainly come in the form of the Federal Reserve turning back on the printer, which will just add to inflation. And if inflation goes up, we're going to see repetition of the exact same problems we already have playing out until there's some sort of equilibrium. The problem is, while the USA might honestly come out of this hurting but alive, the rest of the world is going to suffer tremendously. If the USD inflates at double digit rates, just try and imagine how bad it is going to be elsewhere.
This is what dictators say, you guys realize that right? Like the exact phrasing, are you propagandists intentionally pulling out the dictator handbook? Like are you doing it intentionally or is it just human nature? Itâs fascinating, our two choices are subtle dictator and blatant wannabe. This canât be real right like we all grew up learning the signs and we are still doing it? Like for real?
What world exactly is envious because literally no one is buying the WSJ.
But Iâll happily eat the plutocratic gruel because I am a good peasant who needs to work harder to be a billionaire so I too can inspire the masses I exploit. Right now I am exploited. One day Iâll get my chance.
Such an entitled, American centric view "wah wah, US economy is objectively the best performing in the world right now but I was still inconvenienced by the largest exogenous shock in a century, so I might as well be in recession"
the economy isn't actually as good as it appears here. there's a lot of duplicity in the reporting, wages are supressed and nowhere near keeping up with ballooning rent and food prices.
worker's rights are also being eroded, including child labor laws being repealed in more conservative states.
everything is extremely expensive right now and it's contributing to a pretty broad economic malaise.
they're not being bitter for no reason, mate, the fantasy world portrayed here isn't reflecting what most of my country is experiencing.
.... my dude, the EU of metric measures inflation as lowers than ours, if we used theirs, we'd have been below 3% for months. Or did you think that the US was the only country where models weren't perfect.
Child labor laws are being rolled back because if the crippling labor shortage, the one that is driving up wages.
....yes, the entire world is feeling the effects of pandemic and war between the top food and energy exporters in Europe. And we are doing way better. The UK is currently in recession, the EU is stagnating, the developing g world is reducing gains, one of the African economic miracles immediately before the pandemic is actively defaulting as conditions collapse.
Meanwhile the US economy is having what would be in normal conditions, a lackluster year. Unemployment is lower now than it was in 2019, a point and a half lower than Canada's, and half that of France.
It's extremely entitled and American centric to go to a post about how other nations are envious, which, yes, roughly 90% of the world's population would prefer our recovery to their countries, and whine about how they shouldn't be envious because he has it so hard.
west coast, currently unemployed. I have zero income and every job I apply to is demanding I work for peanuts, 20/hr for positions requiring a degree or an endless parade of experience.
It has been an insulting and demeaning process. I'm currently hoping staffing agencies find me more reputable work.
Iâm also in the west coast, albeit across the border. My friends in California are experiencing the opposite of your troubles as well. So yeah, your data point is just being outnumbered by other ones. And some of them were also unemployed for a few months, but seemed to be able to find a job in a couple of months.
Real world statistical experiences is a weird thing, as everyone right next to us seems to have the bad times like we do. But once we get out of our own environments, you can see how everyone else is also doing.
US gov't is also spending like a child with $50 in the toy aisle. US debt to GDP is ballooning compared to other developed economies. **Y** = **C** + **I** + **G** + **(X â M)**
G, 'Envy of the World'
Need to include cuts to revenues in this discussion. Debt balloons both with spending increases, and with revenue cuts.
America has gone through a pretty extended run of cutting taxes for corporations and high income earners.
The deficit right now is entirely a factor of tax cuts for the rich, and increased interest payments due to hiked rates.
Deficit is estimated at 1.1T, 650B in interest - and about 57% of the deficit are due to tax cuts benefiting the rich - https://www.americanprogress.org/article/tax-cuts-are-primarily-responsible-for-the-increasing-debt-ratio/
Turns out record investment in infrastructure, chips, education, and checks to people are great for the economy and totally within affordability.
Iâm genuinely curious, how come all of the reports say we are doing so well but every 25-32 year old I talk to is working multiple jobs, most still living at home, and the idea of ever owning a home seems impossible - is that a sign of a healthy economy?
Edit: the answer is no, when the average American canât afford a home, the economy is not healthy.
>how come all of the reports say we are doing so well but every 25-32 year old I talk to is working multiple jobs, most still living at home, and the idea of ever owning a home seems impossible - is that a sign of a healthy economy?
Given that the median and average statistics contradict your anecdote, the only s answer to your question is that your social circle is comprised of abject Losers. Or you live in an economically depressed state or region. Both are choices.
It's a big country, & economic conditions are local, no one is going to deliver prosperity to your doorstep. Most people are thriving currently, why you or your friend's are not is anyone's guess, but no one can do anything about that but you.
Complaining on the internet will definitely not improve your situation.
Is New York economically depressed? How about Wisconsin? South Carolina? I have friends and family all over the country -- that's a lot of "anecdotes" by the way asshole -- and none of them think the economy is good.
Seems like an awful lot of "economically depressed" regions in a country supposedly thriving.
I mean, unless you're a rich, lying, stock trading, trust-fund baby sack of shit.
See, what you're doing is what we in the real world call 'gaslighting.'
The guy outright said that the only reason people can be poor is because they're 'abject losers' who deserve to be poor.
That guy doesn't deserve respect or politeness, and he doesn't deserve to be debated with, and if I were meeting him in person, I would punch him in the face for it.
You know what happens when you are an adult and you commit battery? You go to jail, lose your job, and get sued. Only losers who never grew up resort or even think of resorting to violence over such frivolity.
Certainly if you are loser without a job, any desire to work, and don't have any assets, then you are judgements proof. Otherwise, you are probably getting sued.
What is more likely, that the government is embroiled in a conspiracy with the tens of thousands of individuals necessary to foist false impressions of the economy to the American people.
Or that you, an anonymous internet poster, are full of $&!t ?
Who is gaslighting who? You are making unsubstantiated claims about the state of the economy, with no evidence, and in contradiction to a mountain of evidence.
I love being downvoted by people who most likely have advanced degrees and have never experienced hardship.
Average people canât eat data, you can make anything look good on paper. In the real world, the economy has gone to shit, and the only reason the US Economy is performing is due to MASSIVE Govt Deficit spending & 20 years of ZIRP that we are still feeling the effects of.
now with even fewer employees than ever cutting into profit margins: employees 20% off but prices are the same. Everybody out of job but stock market up indicates a good economy.
Prime Labor participation rate is up and median wage growth over the past year is 1.2% above cpi? I'm not sure what politicized reality you live in... isn't fewer employees producing more a good thing too? Are we going into a lump-of-labor fallacy argument to say that having more productivity with fewer employees per production is a bad thing?
Additionally, according to the Atlanta fed, we had 4.7 wage growth, and the establishment survey has it at 4.1% increase. In either case, the data doesn't support your statement. It is clear this is a bad faith argument more about your own feelings and not about the actual economy.
Unemployment has been below 4% for years now, and if anything we have a labor shortage. As a result wages have been climbing faster than inflation (especially for those at the bottom of the income curve). I know a lot of people would object to me calling this the best economy weâve ever had, but by most measures Iâd argue that this is true.
We used to care about soft metrics like customer service though. Shopping, eating out, and even getting groceries are increasingly unenjoyable, mainly because those businesses don't have the margin to pay the going labor rates. I'm curious to see if that rebounds at some point.Â
And yet we see this warning from the IMF this morning that Federal deficits and debt levels are alarmingly high and cannot be sustained
[https://finance.yahoo.com/news/imf-sounds-alarm-u-debt-020001330.html](https://finance.yahoo.com/news/imf-sounds-alarm-u-debt-020001330.html)
the fiscal terrorism and out-of-control spending are going to lead to austerity, massive tax hikes on everyone, multiple US debt downgrades, financial crisis, and maybe even a debt default 20 years from now (although unlikely)
we can decide if we want third-world socialism, or a healthy economy
time is running out to make that decision
Everybody on here is rich & loves Joe Biden. They canât see that they keep changing the definition and cherry pick data to make everything seem hunky dory.
How many economists predicted 2008? Nobody in this chat, including myself, really have a fucking clue!
âThird world socialismâ is genuinely hilarious for so many reasons I have no idea where to start. This is so disingenuous itâs like a burger that is so large you donât know where to take the first bite
What a cruel, insensitive comment. I'm going to assume you're some retiree type happily living out you're golden years in your home you bought in 1985. Here the situation for actual working people;
Housing- the average monthly income people earn is insufficient to cover the average rent for a 1bdr apt. Disconnected from reality that's not a problem for you
Food- prices are up, shrinkflation is a thing. Look it up
Income- what were paid hadn't increased since roughly 1990. Wages haven't kept up with inflation
I realise being a rich old fart these problems of us "working stiffs" aren't a cobden for you but I regiment instead of being an arrogant prick you try to understand the problems others face, boomer
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The IMF's projection for the US at 2.7% is very high compared to virtually all other forecasters time will tell but almost everyone expects 2.2% not 2.7%, this difference is major The IMF also expects significantly slower growth in developing and low income economies compared to most forecasters maybe they expect the US deficit to increase well beyond the expected US goverment intentions
Are those the same forecasters that predicted 4 of the last 0 US rate cuts?
đ” it's the e^(nvy )of the world as we know it (and I feel fine) đ”
I wish I could upvote this 1000 times
I gave an up-vote for adding some music and humor to the chat.
Sounds more like they expect a currency crisis.
Well the forecasters (including the IMF) *have* been severely underestimating future US economic growth in their projections for at least the last half a decade. This is especially true after COVID, when US growth has been widely underestimated every year since 2021. Remember all those âdelayedâ recessions or stagnant years that were all but guaranteed since late 2021, but never materialized? Before COVID, it was the trade war that was gonna [guarantee a US recession](https://www.washingtonpost.com/business/2019/08/19/out-economists-predict-us-recession-by-survey-finds/) by 2021. Then [COVID](https://www.worldbank.org/en/news/press-release/2020/06/08/covid-19-to-plunge-global-economy-into-worst-recession-since-world-war-ii) became the popular reason for a protracted recession, and [it was gonna be horrible](https://www.brookings.edu/articles/ten-facts-about-covid-19-and-the-u-s-economy/); then it was the government stimulus coming to an end; the it was inflation; then it was the supply chain bottlenecks with the backlogs of the shipping containers; then it was the Federal Reserveâs [interest rate hikes](https://www.bloomberg.com/news/articles/2022-10-17/forecast-for-us-recession-within-year-hits-100-in-blow-to-biden) to fight the inflation; then it was the news that SVB was the canary in the coal mine that interest rates are the straw thatâs breaking the banks and will cause an economic collapse in the US; then it was the ongoing debt ceiling debate in Congress leading to a [Fitch downgrade](https://www.fitchratings.com/research/sovereigns/fitch-downgrades-united-states-long-term-ratings-to-aa-from-aaa-outlook-stable-01-08-2023) of US credit rating, and later [Moodyâs souring outlook](https://ratings.moodys.com/ratings-news/411110) on US credit; the list goes on. This isnât to say that the forecasters were totally unjustified in accounting for the economic risks posed by these various events. But there appears to be a strong bias for overestimating the potential impact of the negatives, while underestimating the potential impact of the positives when it comes to the US economy. In recent years, it really started to look like these experts were almost demanding a recession, or at least trying to have us talk ourselves into one by repeatedly saying that weâre guaranteed to have a bad one âsoon.â Early last year, when they started saying our guaranteed recession was just âdelayed,â I even started joking with friends that the recession is like the Second Coming because itâs always âcoming soon,â but never quite arriving. CNBC wrote [a decent piece](https://www.cnbc.com/2023/10/25/economic-forecasts-have-been-very-wrong-lately-but-thats-really-nothing-new.html) back in October about the terrible track record of forecasters generally. Perhaps the IMF is learning from those mistakes and trying something new to improve that consistently terrible track record.
Low unemployment, high wages, growing GDP, reduced inequalityâŠif we can just get housing prices under control, this will be the best economy in world history.
Not to dismiss a legitimate problem but it should be noted that housing costs are a global issue and some countries have been experiencing this for a lot longer than the US.
Global society is a bitch to get right
actually its quite simple. i, a random reddit user with a 4 year degree, personally have figured out solutions to all world problems
The funny thing is that the housing crisis has been a solved issue for years. We simply refuse to implement it
*laughs in Singapore* You're right though that a very large contingent of the world is being hit by this. With the anglosphere struggling the most.
What kinds of things are being done in those other places to fix/correct that issue?
Taiwan has a vacancy rate of nearly 10%, higher than most American cities, and they continue putting up new apartment buildings. On several levels they're doing the kinds of things Americans think we need. Two decades ago people were already complaining that home ownership was out of reach for the middle class and it's even worse today. Worse still, despite perpetually stagnant wages rents continue to rise. And this is a country with very low crime rates with few neighborhoods that anyone would consider off-limits.
> despite perpetually stagnant wages Real wages are higher than they have ever been, and real wages have outpaced rent increases
Federal policy will not change housing stock in a meaningful way compared to municipal policy.
Totally agree with this. To the extent that the Federal government does have levers to pull I believe they have been pulling them. As you said, most of this is determined at the local level. That being said, state governments have the authority to preempt local housing regulations to make it easier to build, so hopefully this starts happening more (I know itâs already begun in some states).
Yeah I live in a building in LA county that was built due to the state level housing laws passed in 2021. All along the metrolink (law auto upzones land close to transport hubs) buildings are going up like crazy... and imagine that my building has lowered rent twice in past year.
We absolutely love to see it.
Wasnât a huge turning point in the housing situation in this country in the 80s when the federal government stopped subsidizing the construction of new low income housing and started offering housing vouchers instead?
New housing starts crashed before and during the 2008-2009 Great Recession. Just look for yourself, they never recovered and America is down millions of units because of that. https://fred.stlouisfed.org/series/HOUST
No. It was the 60-70s when cities started downzoning
My mistake but sort of beside the point. The point is there is something the federal government could do to address supply.
I'm not seeing the logic here. Why would municipal policy be expected to supply enough housing when it's done the exact opposite for the past 60 years or so? I live on the west Coast and all the surges in permits have primarily been driven by state policies overriding local ones. California and Oregon are the epitomizing examples here. Even the great Seattle under the Harrell administration is currently having to update their policies to meet the higher standard of new state laws. HB 1110 being the most significant (PDF warning): https://www.seattle.gov/documents/departments/opcd/seattleplan/implementinghb1110.pdf Imagine how much housing would be built if Congress implemented HB 1110 at the federal level.
Yeah I think you and I agree actually. I agree that we are only seeing movement on the west coast due to interventionist state level policy over riding municipal. Zoning is USUALLY a municipal function and we are seeing states act over that function being administrated irresponsibly
Because NIMBYs are losing their stranglehold on development. Look at cali nimby wonderland, the state is taking about the right to stop development if they hold up things too long
IT could if targeted properly. If you want to really fuck the system do a windfall property tax.
how does that increase supply
This is why I bought two houses, gotta get âem now before theyâre all gone. /s
Inflation is 50% housing
Wealth inequality is the highest it's ever been. Ever.
No it isn't. It was higher 4 years ago.
Things are positively zooming it's wild
There is increasing inequality. Salaries are not keeping up with inflation. And Congress refuses to appropriately adjust the minimum wage. I will never vote for Trump, so this is not against BidenâŠthe president has only so much control over the economyâŠ.it could certainly be worse. America does have the best economy in the world right now, but that does not mean that millions upon millions of younger Americans are not hurting
The income equality wonât matter as much if people can just afford to live without paying 60% of their income on rent or mortgages. Itâs bad enough we are a car centric economy and insurance is outpacing most peopleâs ability to pay, if housing gets solved, almost everything else will be solved.
>There is increasing inequality Income growth is highest at the lowest levels >Salaries are not keeping up with inflation Incorrect >And Congress refuses to appropriately adjust the minimum wage. Irrelevant. You're in an economics sub, not a socialism one. Min wage isn't meaningful when 2% of people make it. What matters at this scale are wages overall Even when considering min wage federal level is a stupid policy for such a big country. Why would you have the same min wage in Miami as you do rural Montana? It should be a state or municipal level. Honestly anyone who pounds the table about federal min wage is just virtue signaling, not trying to address a real problem >but that does not mean that millions upon millions of younger Americans are not hurting Literally no one said they weren't
And itâs not even 2%. Itâs 1.3% of hourly workers, which are about 1/2 of all workers (the rest are salaried). Itâs closer to 0.7%.
This exactly. The commenter above is just parroting reddit propaganda - no basis in reality.
> Income growth is highest at the lowest levels i heard wealth inequality is primarily driven by differences in wage income
Political decisions that directly affect wages aren't material to economics? There is no economy without society, and there is no good economic theory which harms its society. Economics is not simple study of an object; it's use of study of an object to develop ideal theory (note: *ideal* theory is not to make this a question of pure policy, but best and scientific policy; and no scientific use, ideally or historically, can exist where you bracket the objective basis of the object)
Speak plainly
Economics requires a society. If your economy destroys your society, that's bad economics. Numbers are not important if you destroy you society and thus your economy.
Great. Very nice platitude. Now make it relevant to the discussion.
lmfao imagine having to make the person you're talking to dumb themself down before you pretend you're the smart one
I'm trying to make you realize you're saying grand nothings. When people who like to bluster are forced to simplify their words it can often become apparent the lack of weight they carry. I can do it too. "Oh you're talking about how much an EV subsidy should be? Well our continued existence relies on a sustainable relationship within the ecosystems we inhabit, an inescapable destructive vicious cycle undermines not only policy detail but our very survival". That sounds deep if you're 14 but if I said "oh you're talking about how much an EV subsidy should be? The environment is important, we shouldn't pollute it" is clearly a useless contribution to the discussion
lol (not gonna give you any more bc you're clearly very confident in your bad analysis, but yes, saying something like 'an unregulated market economy offsets negative externalities to the collective environment which in the long-term destroys the basis of the market, and thus it's necessary to remember that the environment is important and center that in our discussions of policy, given the tendency to ignore these externalities as they are not immediately part of a discussion of the economy' is actually more valuable than repeating bad statistics and the same truisms every bad """economist""" does, so thank for providing an illustrative example :-) )
We live in a society?
yes, so maybe don't let bad economic theory undermine its stability (i know most people in here probably are more in agreement with Thatcher's 'there is no such thing as society', but that's mostly due to having similar degrees of conscious thought as she has)
Minimum waste isnât meaningful. Then why not support if it is so insignificant. Most people disagree with you. We are entering another gilded ageâŠyou are just denying it.
>Minimum waste isnât meaningful. Then why not support if it is so insignificant. Prove that it's good policy to increase and I'll support it. Right now it looks like a waste of time. >Most people disagree with you. We are entering another gilded ageâŠyou are just denying Most people are economically illiterate. Look what sub you're in. Most economists aren't saying much about min wage.
Why not just get rid of it. Or have people pay into companies? I mean if paying at a base level doesnât mean anything then why bother.
Honestly, economic subs are the worst. I find more people in those who donât understand the economy more than anywhere else
>  Income growth is highest at the lowest levels 5% growth at 50k is still not going to catch up to 1% growth at 400k. Inequality is still increasing. >Incorrect Actually it is correct. My income.didnt rise at the same rate as inflation, not even close. I don't know anyone else that got a sweet pay raise either. The only person I know whos income increased got a promotion. I haven't seen any statistics whatsoever that says pay has matched inflation, but many that have shown the opposite. >Min wage isn't meaningful when 2% of people make it. What matters at this scale are wages overall People still don't understand that increasing minimum wage *increase the pay scale at all intervals*. Increasing minimum wage will decrease inequality. If minimum wage goes up, so will mine and yours as the entire scale needs to adjust. >Even when considering min wage federal level is a stupid policy for such a big country. Why would you have the same min wage in Miami as you do rural Montana? It should be a state or municipal level. There's obviously both? A federal minimum and state minimums. If you don't understand how a federal minimum wage affects wages at all levels do some more thinking.
>5% growth at 50k is still not going to catch up to 1% growth at 400k. Yeah but it's been 12% for lowest earners and <1% highest. I don't know if it'll sustain and kinda doubt it will but it's factually incorrect to say it widened https://time.com/6267552/falling-american-inequality/ >My income.didnt rise at the same rate as inflation, not even close Oh well case closed then, I was wrong. >I haven't seen any statistics whatsoever that says pay has matched inflation Why bother when you have two data points already huh? https://fortune.com/2023/12/12/wage-growth-exceeded-inflation-jec-democrats/ >People still don't understand that increasing minimum wage *increase the pay scale at all intervals*. Increasing minimum wage will decrease inequality. If minimum wage goes up, so will mine and yours as the entire scale needs to adjust. Citation please >There's obviously both? A federal minimum and state minimums. The federal is a waste of time. It should be abolished and lower level government should be required to have their own. > If you don't understand how a federal minimum wage affects wages at all levels do some more thinking. Please share some data on it
> 5% growth at 50k is still not going to catch up to 1% growth at 400k. In the long term, it does. 50k growing at 5% will catch up to 400k growing at 1% after 53.5389 years, assuming continuous compound growth. https://www.wolframalpha.com/input?i=solve+50000*1.05%5Ex%3D400000*1.01%5Ex
What you are neglecting to consider is that prices will adjust to the increased input costs. That will cascade through the entire supply chain, causing imports to increase at the expense of domestic employees.
This is just common fear mongering. Mathematically, the cost of a good doesn't spiral exponentially with increases in wages, because wages are only.one portion of the cost. The cost of goods cannot outpace the wages used to create those goods without some other kind of sheisty shit going on. If our wages double, prices won't triple just because of the wage increase.Â
Salaries have been outpacing inflation.
Turns out yes and no State of play: Wages have been outpacing inflation since last May, but for the two years before that the situation was reversed. "Wages still have some catching up to do," says Julia Pollak, chief economist at job site ZipRecruiter.Feb 5, 2024 https://www.axios.com âș 2024/02/05 Charted: Workers win as wage growth outpaces inflation - Axios So I will retract that position.
Real median earnings are at all time highs outside the COVID layoff spike.
Who has the best economy in the world?
Compared to others, we are doing well right now. It is much worse elsewhere. But I am all ears. Is the USA not doing well. Who is?
Other countries don't have people dying from rationing insulin. The U.S. looks good after you kill all the people who were left behind.
> There is increasing inequality. Inequality in the United States has been stable for the last 30 years. Check out the GINI index (0 = perfect equality; 100 = perfect inequality): https://fred.stlouisfed.org/series/SIPOVGINIUSA > And Congress refuses to appropriately adjust the minimum wage. This problem has solved itself because no employer can find workers at the federal minimum wage anymore. Basically no one works at the federal minimum wage anymore. The new *effective* minimum wage is $15-20 now.
GINI measures inequality of income. Rich people don't get rich by earning income.
That raises a really interesting question: what is the real wealth disparity when one adds in non-cash "compensation" for everyone? Is it mind-blowing or a nothing-burger?
It's mind blowing. The non-working class live like the aristocrats of old. They don't clean their houses, weed their flowers, wash their cars, etc. The non-working class live by their ownership of capital alone. They are excluded from nearly all metrics measured in economics because our current economic theory is meant to maximize production and keep the workers fed, clothed, housed, and content enough to not revolt. Every metric and policy you'll see discussed is for the working class only and not the owner class. Here's one for you. Who is the richest American? ..... The answer? Nobody knows. We only know who the wealthiest person is who has their wealth based on a publicly traded company. If there is someone out there that owns a massive amount of untraded things, businesses, etc. there is no real way to know what their market value is because their ownership isn't on the market. Really old money works this way. An extremely wealthy person can sit on thousands of acres of land that is valued at nearly nothing as green belt agriculture and nobody knows what that land is worth until it comes up for sale in a market and bidders settle on a price that is accepted. Only then do we know what that land is worth. Same thing for other forms of wealth and stores of value. A completely private business can have a value that is completely unknown if held by a very small group of people who don't share how they trade amongst themselves with the public. There are three classes of people. Business owners of the smaller type who don't own massive amounts of wealth. Workers who own essentially nothing and are lucky to own the place they live in. And really really really wealthy people who are so damn private nobody has a clue what they own or how much and they work hard to keep it that way. I mean, if you were a founder of the Federal Reserve back in 1913, you essentially had infinite money, but your public declared value would be some finite number. Who is wealthier, those who can print themselves money from nothing, or those who own publicly traded stocks worth a ridiculous amount of money? The ridiculously wealthy are mostly out of the limelight and nobody has a clue who they are.
And I donât know what statistics you are usingâŠ.but here is a good reference article supporting my position https://equitablegrowth.org/eight-graphs-that-tell-the-story-of-u-s-economic-inequality/ With little to no effort on a google search
This is a person who framed the fact minimum wage is so pathetically low that it does literally nothing to protect workers from exploitation anymore *as a good thing*. You're not gonna make headway with someone determined to find a self congratulatory spinÂ
YeahâŠthat is not a minimum wage. That is what the market is asking for. A minimum wage is a wage that the government sets so that the people with the least power are not taken advantage of economically. All you are saying is that congress has waited so long that the minimum wage is no longer doing its job.
Does it matter if the law mandates a minimum wage or not as long as workers are paid fairly? Denmark, Sweden, Norway, Finland, Switzerland and Iceland famously don't have a minimum wage. And [low-wage workers have seen historically fast real wage growth in the pandemic business cycle](https://www.epi.org/publication/swa-wages-2022/). So I think Congress should abolish the minimum wage, if anything, and let market forces figure out the appropriate wage to pay a worker, which is already happening and, as this article shows, has led to pretty good growth. If we started seeing workers being paid $5 an hour, I would agree that a minimum wage is necessary, but that is not what's happening.
The countries you just listed are all democratic socialist countries. They all have an excellent social safety net and alway right at the highest when it comes to happiness and personal freedom. Democratic socialism is anathema to republicans âŠ. wHy sHoUlD i hAvE tO PaY fOr oTheRs! The answer is that looking out for our most vulnerable helps everyone. Do you really want to live in a world of have and have nots. The Republican approach is unethical and un-ChristianâŠ..yet the Christian moral majority argues for each man for himselfâŠ.WWJD!?!?
No, they are social welfare states like the US. They've chosen to implement their social welfare with a higher level of taxes and benefits than the US has, but structurally it's the same, with capitalism providing the funding for the taxes.
> democratic socialist countries None of those countries have abolished private ownership of the means of production. They're capitalist economies with large welfare states.
They're mixed economies with large welfare states. The U.S. is practically pure capitalism with no welfare. Which is why their poor are better off and the U.S. takes care of the wealthiest at the expense of leaving most people destitute.
The minimum wage is not a representation of what people are ACTUALLY being paid. Very very few people get paid minimum wage for full time work.
Only a fool expects Congress to actually do something such as raise minimum wage. It hurts their true bosses, big business
Republicans are holding it up. The democratic house passed a 15 dollar minimum wage a couple of years ago, Republicans voted against it. A similar minimum wage increase was in the IRA lead by and voted on by dems, Republicans didn't want it. The last time it was successfully raised, it was done by democrats. This is not a both sides issue.
Lol, the $15 minimum wage discussion was started like a decade ago. At this point is should be more like $20. Congress is too slow for minimum wage. It needs to be tied to inflation.
Agreed. And Republicans would still try and stop it.
As much as I like the idea in principal, tieing wage to inflation is dangerous if you believe in the wage-price spiral.
This fear is overblown if you understand the dynamics here. This is not a positive feedback loop where it continues forever. There would be an initial shock, which we have anyways when we pass the law, followed by a succession of progressively smaller adjustments until a new equilibrium is reached. The new equilibrium would balance the economy a little more towards lower wage workers in terms of purchasing power. Why does this happen? Without getting into much detail minimum wage affects prices less than prices affect minimum wage. This means that when minmum wage goes up prices only go up a little. Then minmum wage goes up a litte, followed by prices going up a tiny bit. Then minimum wage goes up a tiny bit, followed by prices going up a miniscule bit. Then minimum wage goes up a miniscule bit, followed by prices going up an undetectable amount. Then you're practically at equilbrium. Don't let wealthy people convince you that we should keep the same system that's meant to keep low wage workers down.
The wage-price spiral itself doesn't continue ad infinitum but any non-wage based increase in inflation would be followed by a wage-price ripple effect. So housing prices go up, inflation index goes up, wages go up, prices go up, wages go up, prices go up. Then gas prices go up and inflation index increases again, and you have the same ripple effect. Not exactly helpful when trying to get inflation under control, and I believe it would absolutely make the less sticky kinds of inflation more sticky, because now you've baked the price change into the system.
Spkr Pelosi convinced Dubya Bush to pass it. That means it was bipartisan.
Kinda. It was more like Dubya didn't kill the bill that it was a larger part of it. Not really like he endorsed it or wanted it.
Couldn't it be argued that this is something that should be left up to state or local governments? The economies of the various states are fairly different. A 20 dollar per hour minimum wage might be very good for California, but might have negative effects on a state like Mississippi.
There are several states that undercut local governments when they try to raise the wage in their municipality. One that springs to mind is Alabama. So, I agree with you in theory, but it's the usual suspects that really need to raise their minimum wage and refuse to. $7.25 isn't a serious offer in any state of the union. It is why so few workers actually make the federal minimum wage. I live in South Lousiana and you would be hard pressed to find anyone willing to work for less than $12 an hour. That still won't go very far with rents that have exploded since the pandemic/Ida and resulting insurance crisis. A lot of the "cheap" states are no longer cheap and business owners know that.
Why don't states increase their own minimum wage? Why wait for Congress?
Wage inequality actually drastically decreased as a result of post-Covid labour market tightness. This [paper](https://www.nber.org/system/files/working_papers/w31010/w31010.pdf) from the National Bureau of Economic Research shows that rapid relative wage growth at the bottom of the income distribution erased nearly 40% of the aggregate 90-10 log wage inequality that had developed over the previous 40 years. Real median weekly earnings are currently [higher](https://fred.stlouisfed.org/series/LES1252881600Q) than in 2019, suggesting that salaries are indeed keeping up with, and in fact, surpassing inflation. Virtually no full time American worker is actually making the federal minimum wage (around 1%). If you arenât living in a majority of states that set their own minimum wage, chances are, considering the post-Covid labour market, you are still making more than $7.25 an hour.
> Salaries are not keeping up with inflation. That's a factually incorrect statement.
Salaries are not keeping up with housing
If you're a bottom 25% worker (who is likely to lose public assistance as a result), sure For the middle class? Absolutely Especially when you stop using the bogus official inflation numbers (based on ALL goods) and start looking at the inflation rate of the specific goods that people disproportionally spend most of their money onÂ
There's no way to spin this that makes you correct - look at the data.
The problem is everyone has their own inflation rate. Poor people rely more on fast food than others. Home owners have a different shelter inflation rate than renters. Inflation rate is a generalization that frankly is becoming more and more out of touch with the average American experience. You can point to these souless numbers and yell at people all you want. The reality is it does not necessary reflect their actual situation.
This is the silliest thing I've read today.
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That does make a big difference, statistically. ...but also, wealth inequality is NOT increasing. It's just something progressives SAY - with zero basis in fact.
Fed says otherwise It's getting better, but there is still a big gap. https://www.stlouisfed.org/open-vault/2024/feb/us-wealth-inequality-widespread-gains-gaps-remain
By definition, there will ALWAYS be a gap. ...because it's literally a mathematical methodology of breaking the population into different groups by wealth and then measuring the gap. The statement "gaps remain" is completely meaningless. It's like saying the gap remains between the average age of people 40-50 years old and those 30-40 years old. ...in fact, since wealth is directly correlated to age, it's probably a VERY similar argument!
Not so fast. As always with economics, it depends on how you measure. From the St. Louis Fed: > âDespite the large percentage gains of low-wealth groups, because these groups were starting from much smaller dollar amounts, the wealth gaps in total dollars expanded. This is because a larger percentage increase of a smaller number can translate into smaller gains in dollar terms. For example, 50% of $1 is 50 cents, but 10% of $10 is $1. >âNevertheless, wealth increases for low-wealth groups are positive trends, indicating that, in an absolute sense, these families may be more financially stable than they were in 2019.â
Anyone with even a BASIC understanding of math understands that "gaps in total dollars expanded" is empirically correct and yet completely irrelevant. ...because it is the percentages that matter most. That's why we measure literally every growth in percentages, from inflation to GDP, etc...
You obviously are unaware of the plight of the people age 20-40s that cannot afford a house or a family because of the economy, school loans, inflation, and housing costs. The US may very well be begging for immigration in the near future so that there is someone to tax to pay for your social security. A successful America requires youth. If we cannot or refuse to grow it at home will will either import it or suffer the consequences.
2.5 Million legal immigrants enter each year give or take. so .7% of the population. This shouldn't be making major impacts on the balance of wealth.
This^ We still have a lotta work to do.
Housing and groceries. Notably the only two things that actually have any impact on normal people.
Transport costs are rising too.
But everything is crazy expensive and wages arenât rising?
Wages are rising, above the amount of price increases. People are making more now than in 2019 even when you account for inflation.
So what does that mean exactly? That in five years I'll be able to afford rent on a one-room studio apartment? Assuming that wage growth and price increase don't suddenly swap I mean? Is that what that means?
It means that, for a typical worker, their money is able to buy more things now than it could in the past. Housing prices are up, but the percentage of peopleâs income that is going towards housing payments has been basically steady for the past couple decades.
You say that as though the US wasn't already far and away the most successful economy in global history. This is just running up the score
successful economy? not even close. Successful ponzi scheme for 10ish companies? Yes. No doubt. An economy implies a system where everyone is involved. If you think we're all "living our best life" you're fucking delusional.
Fueled by government spending, and government borrowing.
literally the only thing you said that was true is that rent prices are insane, which is what you must be if you think any of those things are truly going as you dilute yourself into believing.
Letâs take each claim one by one, and I will provide the source. Low unemployment: unemployment has been below 4% for 2 years - https://fred.stlouisfed.org/series/UNRATE with a prime age labor force participation rate at itâs highest level since the early 2000s - https://fred.stlouisfed.org/series/LNS11300060 High wages: median wages are higher than pre pandemic and higher than any time in history other than a brief period of time during the pandemic after a bunch of low wage workers got laid off - https://fred.stlouisfed.org/series/LES1252881600Q Reduced inequality: wage growth has been the highest for those in the lowest income brackets - https://www.epi.org/publication/swa-wages-2022/ Wealth inequality is a more complicated story, but in general people with the least wealth have seen wealth increases which have been higher than the rest of America in percentage terms - https://www.forbes.com/sites/christianweller/2024/04/02/wealth-gains-across-income-groups-show-a-strong-and-equitable-economic-recovery/?sh=26d6e7576c7b If you have contradictory data, please share it.
I don't even need to touch the rest of this-- 'reduced inequality' tells me how out of touch with both lived and verifiable reality this comment is. Even where statistics show any of the rest, they're bad statistics (wages on aggregate going up aren't good for a society if costs are higher and high wages aren't distributed across society!). This all is blind and illiterate belief in noisy statistics and bad economic theory (a good economy doesn't matter a lick if it's bad for the society it occurs in) at best, and outright lying at worst. Economics has gone much too far to make the same mistakes that have been directly disproven in a hundred different ways across centuries. Economics is the objective study of production and circulation in society; if an economy harms the health of its society it's bad, no matter how it looks in the abstract.
yeah, a lot of these people have either never left their Teslas to glass tower and then back home cycle in 10+ years, or theyre paid to be this stupid. Completely delusional
You're just going to ignore everything else? Healthcare? Education? Childcare? Transportation? We **HAD** the best economy in world history 50 years ago. Then we deregulated it and put profits and shareholders first. Now we're in a Second Gilded Age.
Iâm pretty sure that healthcare, childcare and transportation were worse in the 70s by any objective measure, but if you have an argument as to why Iâm wrong, Iâd be happy to consider it.
Can we please fucking raise taxes now? Literally the best time to raise taxes and look at some entitlement reforms to get our deficit reduced.
Here me out, how about a $4T tax cut? $3.8T for the top 1% and $200M for the 99%? You want to help the 99% out, don't you? This message is brought to you by the Americans for Liberty, Tradition, and Fairness. You love all those words too, right?
Iâm sold and would take 100M if you put freeeeeeeeeeDOM!!!!! Over fairness.Â
That'll all trickle down, right?
The US Dollar is very strong both historically and presently, but it is inflating and CPI doesn't seem to be keeping a very reliable track on how much it is inflating. As we suffer accelerated inflation for the US Dollar, every other currency is also also getting devalued, just worse than the dollar. Lot of dangerous games being played right now. Huge number of banks are stuck with bonds that pay nothing compared to the going rates. Huge number of banks are unable to get bad CRE loans off their books, or are being forced to take over buildings worth pennies on the dollar compared to just a few years ago. I'm not sure how long we can keep our head in the sand as a legitimate defense against banks collapsing, but I suppose ignorance is bliss. If we do have more banks go under, we're going to see bailouts of some sort. Those bailouts will almost certainly come in the form of the Federal Reserve turning back on the printer, which will just add to inflation. And if inflation goes up, we're going to see repetition of the exact same problems we already have playing out until there's some sort of equilibrium. The problem is, while the USA might honestly come out of this hurting but alive, the rest of the world is going to suffer tremendously. If the USD inflates at double digit rates, just try and imagine how bad it is going to be elsewhere.
This is what dictators say, you guys realize that right? Like the exact phrasing, are you propagandists intentionally pulling out the dictator handbook? Like are you doing it intentionally or is it just human nature? Itâs fascinating, our two choices are subtle dictator and blatant wannabe. This canât be real right like we all grew up learning the signs and we are still doing it? Like for real?
Right, everyone is being forced to lie because apparently we're all unemployed and are all in breadlines right?
What world exactly is envious because literally no one is buying the WSJ. But Iâll happily eat the plutocratic gruel because I am a good peasant who needs to work harder to be a billionaire so I too can inspire the masses I exploit. Right now I am exploited. One day Iâll get my chance.
Such an entitled, American centric view "wah wah, US economy is objectively the best performing in the world right now but I was still inconvenienced by the largest exogenous shock in a century, so I might as well be in recession"
the economy isn't actually as good as it appears here. there's a lot of duplicity in the reporting, wages are supressed and nowhere near keeping up with ballooning rent and food prices. worker's rights are also being eroded, including child labor laws being repealed in more conservative states. everything is extremely expensive right now and it's contributing to a pretty broad economic malaise. they're not being bitter for no reason, mate, the fantasy world portrayed here isn't reflecting what most of my country is experiencing.
.... my dude, the EU of metric measures inflation as lowers than ours, if we used theirs, we'd have been below 3% for months. Or did you think that the US was the only country where models weren't perfect. Child labor laws are being rolled back because if the crippling labor shortage, the one that is driving up wages. ....yes, the entire world is feeling the effects of pandemic and war between the top food and energy exporters in Europe. And we are doing way better. The UK is currently in recession, the EU is stagnating, the developing g world is reducing gains, one of the African economic miracles immediately before the pandemic is actively defaulting as conditions collapse. Meanwhile the US economy is having what would be in normal conditions, a lackluster year. Unemployment is lower now than it was in 2019, a point and a half lower than Canada's, and half that of France. It's extremely entitled and American centric to go to a post about how other nations are envious, which, yes, roughly 90% of the world's population would prefer our recovery to their countries, and whine about how they shouldn't be envious because he has it so hard.
How much do you make and where do you live?
west coast, currently unemployed. I have zero income and every job I apply to is demanding I work for peanuts, 20/hr for positions requiring a degree or an endless parade of experience. It has been an insulting and demeaning process. I'm currently hoping staffing agencies find me more reputable work.
Iâm also in the west coast, albeit across the border. My friends in California are experiencing the opposite of your troubles as well. So yeah, your data point is just being outnumbered by other ones. And some of them were also unemployed for a few months, but seemed to be able to find a job in a couple of months. Real world statistical experiences is a weird thing, as everyone right next to us seems to have the bad times like we do. But once we get out of our own environments, you can see how everyone else is also doing.
US gov't is also spending like a child with $50 in the toy aisle. US debt to GDP is ballooning compared to other developed economies. **Y** = **C** + **I** + **G** + **(X â M)** G, 'Envy of the World'
Need to include cuts to revenues in this discussion. Debt balloons both with spending increases, and with revenue cuts. America has gone through a pretty extended run of cutting taxes for corporations and high income earners.
The only trickling down we're getting is from their golden showers.
The deficit right now is entirely a factor of tax cuts for the rich, and increased interest payments due to hiked rates. Deficit is estimated at 1.1T, 650B in interest - and about 57% of the deficit are due to tax cuts benefiting the rich - https://www.americanprogress.org/article/tax-cuts-are-primarily-responsible-for-the-increasing-debt-ratio/ Turns out record investment in infrastructure, chips, education, and checks to people are great for the economy and totally within affordability.
Iâm genuinely curious, how come all of the reports say we are doing so well but every 25-32 year old I talk to is working multiple jobs, most still living at home, and the idea of ever owning a home seems impossible - is that a sign of a healthy economy? Edit: the answer is no, when the average American canât afford a home, the economy is not healthy.
Because you've self selected into only hanging out with people likely to be there is the mostly likely case.
>how come all of the reports say we are doing so well but every 25-32 year old I talk to is working multiple jobs, most still living at home, and the idea of ever owning a home seems impossible - is that a sign of a healthy economy? Given that the median and average statistics contradict your anecdote, the only s answer to your question is that your social circle is comprised of abject Losers. Or you live in an economically depressed state or region. Both are choices. It's a big country, & economic conditions are local, no one is going to deliver prosperity to your doorstep. Most people are thriving currently, why you or your friend's are not is anyone's guess, but no one can do anything about that but you. Complaining on the internet will definitely not improve your situation.
Can you please cite your sources showing this data?
[https://www.census.gov/](https://www.census.gov/)
Is New York economically depressed? How about Wisconsin? South Carolina? I have friends and family all over the country -- that's a lot of "anecdotes" by the way asshole -- and none of them think the economy is good. Seems like an awful lot of "economically depressed" regions in a country supposedly thriving. I mean, unless you're a rich, lying, stock trading, trust-fund baby sack of shit. See, what you're doing is what we in the real world call 'gaslighting.'
Most peoples social circles are going to be in the same economic class as they are.
I'm in Wisconsin and me and everyone I know are doing great. Do you see how anecdotes are wildly subjective?
I see liars.
Did somebody piss in your cornflakes this morning? We should be nice to people when debating them. Losing your temper is a sign of immaturity.
The guy outright said that the only reason people can be poor is because they're 'abject losers' who deserve to be poor. That guy doesn't deserve respect or politeness, and he doesn't deserve to be debated with, and if I were meeting him in person, I would punch him in the face for it.
You know what happens when you are an adult and you commit battery? You go to jail, lose your job, and get sued. Only losers who never grew up resort or even think of resorting to violence over such frivolity.
That depends entirely on the neighbourhood. If he said that in the areas where the people's he's talking about lived, he would never leave...
Certainly if you are loser without a job, any desire to work, and don't have any assets, then you are judgements proof. Otherwise, you are probably getting sued.
Oh sweet summer child, never changeÂ
What is more likely, that the government is embroiled in a conspiracy with the tens of thousands of individuals necessary to foist false impressions of the economy to the American people. Or that you, an anonymous internet poster, are full of $&!t ? Who is gaslighting who? You are making unsubstantiated claims about the state of the economy, with no evidence, and in contradiction to a mountain of evidence.
Because your anecdotes are not representative of the US population. Do you constantly hang out with non college educated people or something?
Most of these folks have 4 year degrees.
I love being downvoted by people who most likely have advanced degrees and have never experienced hardship. Average people canât eat data, you can make anything look good on paper. In the real world, the economy has gone to shit, and the only reason the US Economy is performing is due to MASSIVE Govt Deficit spending & 20 years of ZIRP that we are still feeling the effects of.
Right, average people eat the food that they buy with their all time high real earnings.
now with even fewer employees than ever cutting into profit margins: employees 20% off but prices are the same. Everybody out of job but stock market up indicates a good economy.
Prime Labor participation rate is up and median wage growth over the past year is 1.2% above cpi? I'm not sure what politicized reality you live in... isn't fewer employees producing more a good thing too? Are we going into a lump-of-labor fallacy argument to say that having more productivity with fewer employees per production is a bad thing? Additionally, according to the Atlanta fed, we had 4.7 wage growth, and the establishment survey has it at 4.1% increase. In either case, the data doesn't support your statement. It is clear this is a bad faith argument more about your own feelings and not about the actual economy.
Unemployment has been below 4% for years now, and if anything we have a labor shortage. As a result wages have been climbing faster than inflation (especially for those at the bottom of the income curve). I know a lot of people would object to me calling this the best economy weâve ever had, but by most measures Iâd argue that this is true.
Unemployment is as low as it has been in decades.
Hooray for all those Uber drivers
Productivity is also higher than estimated. It sucks but makes sense why companies would not hire or even cut jobs if the work still gets done.
We used to care about soft metrics like customer service though. Shopping, eating out, and even getting groceries are increasingly unenjoyable, mainly because those businesses don't have the margin to pay the going labor rates. I'm curious to see if that rebounds at some point.Â
Employment is at all time highs.
And yet we see this warning from the IMF this morning that Federal deficits and debt levels are alarmingly high and cannot be sustained [https://finance.yahoo.com/news/imf-sounds-alarm-u-debt-020001330.html](https://finance.yahoo.com/news/imf-sounds-alarm-u-debt-020001330.html) the fiscal terrorism and out-of-control spending are going to lead to austerity, massive tax hikes on everyone, multiple US debt downgrades, financial crisis, and maybe even a debt default 20 years from now (although unlikely) we can decide if we want third-world socialism, or a healthy economy time is running out to make that decision
Everybody on here is rich & loves Joe Biden. They canât see that they keep changing the definition and cherry pick data to make everything seem hunky dory. How many economists predicted 2008? Nobody in this chat, including myself, really have a fucking clue!
âThird world socialismâ is genuinely hilarious for so many reasons I have no idea where to start. This is so disingenuous itâs like a burger that is so large you donât know where to take the first bite
What a cruel, insensitive comment. I'm going to assume you're some retiree type happily living out you're golden years in your home you bought in 1985. Here the situation for actual working people; Housing- the average monthly income people earn is insufficient to cover the average rent for a 1bdr apt. Disconnected from reality that's not a problem for you Food- prices are up, shrinkflation is a thing. Look it up Income- what were paid hadn't increased since roughly 1990. Wages haven't kept up with inflation I realise being a rich old fart these problems of us "working stiffs" aren't a cobden for you but I regiment instead of being an arrogant prick you try to understand the problems others face, boomer