Profiling The Angry American In This New Political And Economic Era | Blog#42

Economist Jared Bernstein has a very thoughtful piece in WaPo in which he analyzes why there is anger among the U.S. electorate. In a piece that takes an honest look at the economic indicators that affect the middle and working classes the most, Bernstein gets at the heart of the issues facing both the electorate and the establishments of both major parties: while the economic data that is being passed on to the public is positive, the nuance of it isn’t being conveyed:

“In other words, for every statistic you can find, I can find one that tells if not a different story, a more nuanced one. Yes, the jobless rate is 5 percent, but the underemployment rate, juiced by 6 million part-timers who want full-time jobs, is a considerably less comfortable 9.7 percent. No question, wages are rising, but the major source of real income growth over the past year has been low inflation. Paychecks aren’t growing so fast as much as prices have been growing a lot more slowly.

Then there’s the geographical dimension to all of this. According to recent research by the Economic Innovation Group (I co-chair their advisory board), business and job growth have been a lot more concentrated in big cities than in non-urban areas. L.A., Miami and Brooklyn have been crushing it, both in terms of business formation and job growth; counties with less than 100,000 people were actually losing businesses, at least through 2014.”

Pew Research has published some detailed studies on wage and cost of living disparities that give readers further insight into Bernstein’s commentary and analysis:

Pew Research – Where Paychecks Are Worth The Most, Least

“Even though California’s San Jose-Sunnyvale-Santa Clara metro area, which covers Silicon Valley, has the third-highest cost of living in the country (after Honolulu and New York-Newark-Jersey City), its adjusted wage ($1,706) is still more than $400 higher than the runner-up, the California-Lexington Park, Maryland, metro area. “

Source: Pew Research - Cost of living disparities
Source: Pew Research – Cost of living disparities

“One factor complicating the minimum-wage discussion is that the cost of living varies widely – not just from state to state but within individual states, something that’s especially true in large, diverse states such as California and New York. The real value of $15(that is, its purchasing power) very much depends on where you live: A wage that might be barely adequate in a big city could be well above the norm in a rural small town.”

The two examples of data given by Pew Research highlight the kind of missing nuance Bernstein writes about. Yes, we have created more jobs these past few years, but how well those jobs pay and how well the wages sustain that worker is highly dependent on geography.  In the new economy, jobs in big cities pay more and buy more, while jobs in suburban areas buy less and in many cases, as noted by Bernstein, are still disappearing.

Indeed, in “A very bad sign for all but America’s biggest cities,” the Washington Post’s Jim Tankersley writes:

“Americans in small towns and rural communities are dramatically less likely to start new businesses than they have been in the past, an unprecedented trend that jeopardizes the economic future of vast swaths of the country.

The recovery from the Great Recession has seen a nationwide slowdown in the creation of new businesses, or start-ups. What growth has occurred has been largely confined to a handful of large and innovative areas, including Silicon Valley in California, New York City and parts of Texas, according to a new analysis of Census Bureau data by the Economic Innovation Group, a bipartisan research and advocacy organization that was founded by the Silicon Valley entrepreneur Sean Parker and small group of investors.

That concentration of start-up activity is unusual, economists say. In the early 1990s recovery, 125 counties combined to generate half the total new business establishments in the country. In this recovery, just 20 counties have generated half the growth.”

Another set of nuanced data can be found in a recent Pew study that looks at the number of people aged 18-35 who are still living at home. The following graphic from “For First Time in Modern Era, Living With Parents Edges Out Other Living Arrangements for 18- to 34-Year-Olds” gives us insight into yet another layer of nuance that has been missing entirely from economic analyses in the last four or so years, especially:


Another important area to look at is housing and its subtleties. On the one hand, to take California as an example, home sales have been brisk and prices have risen sharply. In California, still, rental prices have risen sharply, supply is inadequate and at crisis level, with the supply of affordable housing, commensurate with wages, being so woefully inadequate that a common arrangement now is for multiple families to share apartments and single family homes due to low wages. The Los Angeles Times has a calculator for the best housing options for one’s yearly income. I input an income of $45,000. Here is what the calculator returned:


When it comes to jobs, the picture is no less full of subtlety. Yes, we are down to 5% unemployment, but that neither means that we have reached full employment, that the millions of jobs that have been created since the start of the Great Recession are full-time jobs, or that those jobs pay a sustaining wage. This graphic from Bernstein’s article really brings out the paradoxical nature of the new economy:


As Bernstein noted, those who are doing better are the very same people we would logically expect to be at their angriest: those without a college degree. But they aren’t. When one looks at a fuller picture of what is happening among this cohort, then one appreciates more what is going on.

In Los Angeles, there are approximately 142 shops that sell and deliver fresh gourmet or high-end, packaged pet food. Nine of those stores have multiple locations. Bioethics Pet Foods makes custom dog food for its clientele, while JustFoodForDogs both prepares and delivers its specialty dog food. An offshoot of the latter business caters only to cats. Obviously, these are specialty shops that cater to a well-to-do clientele, in a market for which the demand is high enough to support that many stores. Los Angeles County has a population of over ten million people.

Another example is the growth and popularity of businesses such as Uber, Lyft, and Instacart and the effect they’ve had on pay structure and the erosion of labor rights. These businesses cater to a more affluent clientele and its labor force, contract workers, need not be highly-educated.

Given these and many other examples of new service industries that have sprouted up in the years since the Great Recession, it is not unreasonable to extrapolate that the new normal tends to favor the service-oriented, semi-entrepreneurial minded, and not necessarily toward debt-laden college graduates. Someone without a degree and a creative mind can do better than a newly-minted college graduate, and without the huge student loans to repay. Such an individual is less likely to be angry than a millennial who just spent the last four to six years working toward a degree that will return far less than mom or dad earned, starting out. Similarly, a white collar worker who was laid off in 2008-10, will feel much resentment at having to ditch a professional career for a contract job in a service industry such as Instacart or Uber.

Which brings me to Jared Bernstein’s conclusion. Once we understand the nature and reasons for overall dissatisfaction – anger, really – one must turn to the politics as they’re unfolding today. I posted two companion pieces to this essay. The first is my commentary on a series of pieces that have appeared in the last week by pundits who have expressed a fair amount of criticism of the way the media has handled the election coverage and the reliance on polling. I find that commentary serves the establishment more than it does voters who want to get a handle on what is happening:

The next piece I published is my reply to Professor Lawrence Ware of Oklahoma State University, whom I’ve followed for some time and whose work I greatly respect and admire. Professor Ware wrote an opinion piece on the Bernie or Bust phenomenon.

When one augments Jared Bernstein’s excellent observations with the disparate bits and pieces I’ve added here, one begins to get a full sense of why our politics are the way they are at the moment. As I’ve written often in the last few months, the picture we’ve been getting from the media has been partially obscured by lack of nuance and, I must stress again, by corporate mainstream media’s interest in propping an establishment that is now under fire from its voter bases.

To stress this last point, one must look at a pair of polls that were released today. The first and more alarming of the two comes via The Hill, quoting a new Gallup poll:

Poll: Voters prefer Trump to Clinton on economy

“A Gallup poll released Thursday shows 53 percent of voters think Trump would be the best presidential candidate for the economy, compared to the 43 percent who prefer Clinton.

But voters put more trust in Clinton, the Democratic front-runner, on education and healthcare.

Sixty-one percent prefer Clinton on education issues, while only 35 percent prefer Trump.

Likewise, 56 percent of those surveyed said Clinton would be the better candidate to manage healthcare and the Affordable Care Act, while 40 percent preferred Trump, the presumptive GOP nominee.

Trump, however, has more support among voters concerned with jobs and terrorism, which respondents said are the most important issues in this election.

The majority of voters surveyed — 52 percent — find Trump the best candidate on employment and jobs, compared to 45 percent who prefer Clinton. “

The other poll was released by Quinnipiac University, “Voters Don’t Believe Clinton, Trump Promises, Quinnipiac University National Poll Finds

“Only 24 percent of voters believe Trump, if elected, would be able to build a wall and have Mexico pay for it, while 39 percent say he will try and fail and 29 percent say he won’t even try, the independent Quinnipiac (KWIN-uh-pe-ack) University Poll finds.

Trump would be able to deport about 11 million illegal immigrants, 19 percent of voters say, while 45 percent say he will try and fail and 29 percent say he won’t try.

Trump gets his best score on his promise to ban non-citizen Muslims from entering the U.S., but only 29 percent say he will succeed. Another 42 percent say he will try and fail and 21 percent say he won’t try.

Hillary Clinton would not even try to remove secret money from politics, 63 percent of voters say, while 9 percent say she would succeed and 18 percent say she would try and fail.

She also would not try to curb the power of Wall Street, 56 percent of voters say, as 15 percent say she would succeed and 21 percent say she would try and fail.”

Which brings me back to the California primary and Senator Bernie Sanders. In a new poll, Senator Sanders has overtaken Hillary Clinton’s lead by one point, one week before the June 7th vote. Sanders continues to poll ten points higher than Hillary Clinton in national match-ups against Donald J. Trump and beats him in every scenario, while Clinton does not.

While the DNC has made some concessions to the Sanders campaign, the looming fight at the convention in July has by no means been averted. As I explain in the last few pieces I’ve written, the fight on the Democratic side of the election is for the soul of the party. Contrary to those who say that momentum no longer has relevance and, therefore, not to pay attention to public sentiment in today’s polls, I say pay attention, put your ears to the ground and listen to the rumble. It is getting louder, and with good reason! More to come!

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13 thoughts on “Profiling The Angry American In This New Political And Economic Era | Blog#42”

  1. Rima: I suggest you read (or re-read?) Paul Krugman’s “The Accidental Theorist,” published in 1996. In particular, the last chapter “Looking Backward” written from the retrospective viewpoint of 2096. He seems right on with his comments on “The rebirth of the big city” and “The devaluation of higher education.” BTW, the original article (NYT, Sept 29, 1996) was titled “White Collars Turn Blue.”

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