Voters were right about the economy
102 comments
·February 11, 2025jhp123
vaidhy
It is even worse if you consider the actual reality. US poverty measures OPM and SPM both underestimates the actual poverty. OPM is set to 3x USDA "low cost" food plan and was created in 1960s. It has only been adjusted for inflation. SPM is better, but is not official.
If you tie poverty as the bottom quartile (adjusted per person + addl. impact of children), you are likely to have a poverty wage of around $32,000 (a bit higher than SPM and much higher than OPM). That makes the functionally unemployed much higher. Add to the fact that your benefits like SNAP have a steep drop-off.. you earn $5 more per hour and suddenly, you lose all the benefits and you can see this in the making.
gruez
>It has only been adjusted for inflation.
What else are you expecting? Raises every couple of years for a job well done?
edmundsauto
Inflation doesn't typically cover cost of living, does it? A poverty line basket of goods is different than someone wealthy. And is rent/real estate cost increases and insurance covered?
lapcat
Given the discrepancy in measures—24% vs. 7%—I'm guessing that the "poverty wage" factor is the crucial difference?
The official US poverty definition is about $13k for a 1 person household and $26k for a 4 person household. https://www.govinfo.gov/content/pkg/FR-2020-01-17/pdf/2020-0...
bryanlarsen
And poverty levels are essentially at record low levels:
https://www.statista.com/statistics/200463/us-poverty-rate-s...
bryanlarsen
Yeah, let's call their number U7. It seems like it's U6 + those on a poverty wage.
It's a fairly reasonable argument that U6 is a better measure of unemployment than U3. And I'd accept a similar argument for their U7, or the other U7's out there that add people like the discouraged.
But I suspect that their U7 is likely at a 20 year low, just like U3 and U6 are. Which would invalidate their argument, in my opinion.
lapcat
I think it's extremely unlikely that this team, led by a U.S. Comptroller of the Currency, just messed up something obvious:
bryanlarsen
It's likely the problems are all in the politico framing of it.
U7 seems useful. U7 being 24% feels right-ish. That's on Ludwig.
Implying that 24% is worse than normal when it's likely one of the best values we've had in decades? That's on Politico.
tensor
The "data" either supports their claim or it doesn't. They've defined a new metric, now they can back up their claim by showing how this metric has changed over the last 20 years.
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BoiledCabbage
The article is pretty clearly politically motivated. Thr argument is XYZ number doesn't capture everything and the absolute number is higher. Which may be true, but for U3 unemployment that has always been true!
The fact is every unemplpyment metric you look at is at a historical low. So regardless of what they are or aren't capturing they are all better than they've been in decades. In relative terms the economy has been doing well.
The difference is two thing. In 2020 half the world shut down and it caused inflation. Our inflation was also much better handled than most of the developed world. And number two, there is a very strong echo chamber that wanted to convince they country the economy was bad, and they were successful.
I'll have to find the link, but there was a reputable poll right around the election that asked people in all the swing states how the economy was doing. They all rated it poorly. They then asked how the economy was doing in their state, they all rated it well.
Voters in every swing state saw up front with their own eyes the economy was doing well in their states and said so in the poll, but were sure the economy was doing poorly because of what they heard about all the other states. Mission accomplished for the echo-chamber.
yummypaint
The economy is fine, but we are in a gilded age of income and wealth inequality. The 3 richest men in the world increased their wealth by roughly an order of magnitude in about a decade, meanwhile minimum wage hasn't moved in a quarter century.
01HNNWZ0MV43FF
And wealth inequality means power inequality. It's not really democracy if you can buy elections and buy your way into a government job
spdgg
Those economic gains are not felt by a majority of the population. That was clear by the election, and would be clear to you if you stepped out of your own echo chamber. Nobody wants to hear about U3 unemployment when they can't afford childcare, groceries, medicine, all of which have inflated significantly. For folks who were already living paycheck to paycheck, of which there are many, these explanations are both patronizing and out of touch with the lived experience of most of the population.
maximusdrex
I’d love to see some data supporting this argument because I’ve heard it over and over from people all over the political spectrum the past few years but it just doesn’t line up with any data. You act like they’re quoting abstract numbers which are meaningless compared to people’s “lived experience” but unemployment is a large part of people’s experience. Furthermore, inflation adjusted wages are up (with the highest gains in the lowest 50% of earners). If these statistics aren’t fully capturing people’s experiences, I’m sure every economist in the world would love to know what metrics are better. Instead it seems perceptions about the state of the economy have become more tightly coupled to the media atmosphere than anything measurable.
spdgg
If the anecdotes are not matching up with the data maybe the data is not measured right. Economics is not a science. Given that for profit media is already tightly coupled with the economy, and supported by advertising, the incentive would be for them to create a narrative that the economy is doing well. Consumer confidence is necessary to continue their model of making money through advertising. Righteous consumers of the media have incentive to promote its narratives to make themselves seem more worldly and educated, and that's how we end up with arguments denying the lived experience of "people all over the political spectrum the past few years". The people who have been saying that are not the ones with incentive to lie to you.
nothercastle
If you can’t see the issues with the data you aren’t looking. If you examine the CPI basket and see that health care weighing vs what it is as a % of the economy and that doesn’t draw suspicion idk what will.
CRConrad
> I’d love to see some data supporting this argument because I’ve heard it over and over from people all over the political spectrum the past few years but it just doesn’t line up with any data.
Wasn't one of the main points — perhaps the main point — of the article that the data is measured wrong?
> You act like they’re quoting abstract numbers which are meaningless compared to people’s “lived experience” but unemployment is a large part of people’s experience.
Yeah, and the article was in large part about how the unemployment measures in the data don't reflect what people’s lived experience of unemployment is. That's pretty much the definition of “abstract numbers which are meaningless”.
> Furthermore, inflation adjusted wages are up (with the highest gains in the lowest 50% of earners).
Again, that depends very much on how you measure inflation.
> If these statistics aren’t fully capturing people’s experiences, I’m sure every economist in the world would love to know what metrics are better.
That may be the reason the article suggested some new metrics. Honestly, did you even read it at all?
latentcall
You can just ask people instead of relying on some study or survey…
vannevar
Yes, saying "the voters were right" is not really justified by the evidence presented. According to the article, economic reality isn't reflected in the government numbers and has not been for many years. But since the gap was present in both the Biden Administration and the first Trump term, it doesn't explain the voters' preference for Trump. When you factor in the economic impact of the pandemic and the strength of the US recovery, then regardless of the systematic gap the record actually suggests a much better economic record for Biden than Trump.
A more plausible explanation is that the Republicans were able to persuade many Americans that the economic problems caused by the pandemic were the fault of the Democrats. Blaming the other side for historical accident is a tried-and-true campaign strategy, and the pandemic provided a perfect opportunity to put it to use for 2024.
consumer451
> The article is pretty clearly politically motivated.
Supporting links as to why Politico would do something like this:
https://foreignpolicy.com/2022/01/06/axel-springer-politico-...
https://www.rollingstone.com/politics/politics-news/politico...
CRConrad
N.B: This is the same Springer group that owns a (very) large share of the world’s scientific journals, including quite a few of the most prestigious ones.
consumer451
Thank you. I had no idea that the two were related.
GordonAShumway
I was just amused that a former comptroller of the currency discovered U-6!
TMWNN
"The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right. There's something wrong with the way you are measuring it"
—Jeff Bezos <https://sports.yahoo.com/amazon-ceo-jeff-bezos-explains-2123...>
thinkingtoilet
I think this applies here:
smitty1e
Rule of seven also would seem applicable: https://www.brainbok.com/guide/pm-study-notes/rule-of-seven-...
Look at which way the numbers went under the previous regime.
gigatexal
So be it. But electing Trump to fix the economy is like opting to have the Joker operate on you instead of a competent doctor because you’re sick of incumbent doctors and their shit…
gigatexal
I hope you’re all very rich (you’ll benefit from proposed tax cuts) and don’t have anyone you love dependent on Medicaid …
https://www.aha.org/news/headline/2025-02-12-house-and-senat...
golemiprague
[dead]
theandrewbailey
I'd like to point out that 2019 was a very good year for the economy. It worked well the first time, so why not again?
aweiland
2019 things started slowing down followed by a brief pre-lock down recession in 2020. I don't think things were as good as you remember.
atmavatar
Even if they were, I find it interesting that Trump gets a total pass on COVID, while Biden's held to a standard as if he didn't have to deal with COVID's aftermath.
In some cases, it's actually worse: I've had to listen to some people complain about price increases, citing artificially low prices deep in the heart of the COVID lockdowns as if they were the benchmark for a great days' past economy they wish we could return to.
diffeomorphism
https://www.statista.com/statistics/187867/public-debt-of-th...
https://www.salon.com/2018/02/12/thom-hartmann-how-the-gop-u...
In brief: It worked very badly the first time and the only reason you were conned into thinking differently was massive debt.
8note
it wasnt particularly different from 2015, but also, the things being done are very different now from in 2019
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more_corn
There are two economies. The one inhabited by wealthy owner class (they own homes, stock, have paid off cars and disposable income) their economy is great.
For everyone else it sucked. The metrics tend to focus on the former and ignore the “outlier data” caused by the latter.
toomuchtodo
The problem is the electorate is angry and impatient. The only way for wages to go up is organizing, unionizing, and to further take advantage of structural demographics compressing the working age population cohort. The only way for prices to go down is a deep recession.
Instead, they believed what someone told them (“I will make prices go down”). And when they get the obvious outcome (price levels remain where they are at, or more inflation with tariffs), they are still going to be mad. Facts and data are no anecdote for bitterness and anger, which has been decades in the making (since Ronald Reagan).
jsbisviewtiful
> they are still going to be mad.
Historically it seems like they will be happier despite no change or worse change as long as their "team" won.
toomuchtodo
Yeah, fair. Tribalism and all that.
tzs
We could raise the federal minimum wage from the current $7.25/hour to somewhere in the $13-16/hour range. That would help a lot of people in lower paying jobs.
I picked $13-16/hour because that is what the minimum wage from 1980 would be if it were adjusted to today's dollars and wages.
It was $3.10/hour then which becomes around $12.60/hour if it were adjusted to now based on the CPI. If it were adjusted using the same method the Social Security Administration uses to adjust past earnings when trying to figure your average monthly earnings over you career it would by about $16.50/hour today.
I note that there are several states where the minimum wage is in that range including California, Oregon, Washington, and Arizona on the west, Florida in the south, most of the Northeast except Pennsylvania and New Hampshire.
Looking at a map of minimum wage by states and a map of who won the states in the 2024 election, I think every state where the minimum wage is $7.25/hour went to Trump. In states where it is at least $13/hour it looks like most went Harris except for Florida, Arizona, and Missouri.
Speaking of minimum wage and Social Security, the fact that the federal minimum wage has not kept up with inflation has an interesting consequence. Normally when you retire your SS benefit is a significant cut from your working pay. For someone whose retirement age is 67 and retiring this year their benefit is the sum of:
90% of the first $1000 of the AIME
32% of the their AIME over 1000 but less than $6000
15% of the AIME over $6000
For example if your AIME is $6000 your benefit would be 90% of $1000 + 32% of $5000 = $2500, so half of your average, which is probably around 1/3 or 1/4 or less of what you were making in your later years. Big drop. If you didn't manage to save/invest a fair amount for retirement this can mean a big drop in your standard of living.
If you had been earning minimum wage all those years though your AIME now would be $1982 ($11.89/hour) which is more than you would be currently earning in your $7.25/hour job. Your SS benefit would be 90% of $1000 + 32% of 982 = $1214/month. That's $14570/year, which is $70/year more than you would be making at 2000 hours/year @ $7.25/hour. (And that $14570 is all take home. Your $14570/year working minimum wage would be $13391 after SS and Medicare taxes).
So for someone who has worked minimum wage all their life at least their SS will be enough to continue their current lifestyle when they retire. They aren't screwed if they were not able to save/invest much.
tonyedgecombe
That's been the case for a long time (at least in the Anglo-sphere). What may be different now is how in your face the disparity is.
trod1234
Didn't they just fail payroll because of the frozen payments from USAID which they said they weren't receiving?
shadowvoxing
I'm convinced most HN readers only read left-leaning mainstream publications, and they were all funded by USAID.
nuancebydefault
The statements in the article are as good as impossible to verify, no clear metrics, no formulas, no charts.
Also the pretext that 'voters' vote around 'the economy' is hard to qualify nor quantify.
What's clear to me is that a lot of voters believed someone who repeats things over and over and promises to 'fix' things with zero evidence to show for. It tells us more about effectiveness of repeating, fear mongering and blaming 'the others' than about economics.
lapcat
> The statements in the article are as good as impossible to verify, no clear metrics, no formulas, no charts.
The author's bio links to https://www.gene-ludwig.com/ which has a number of whitepapers.
ThrowawayR2
> "Also the pretext that 'voters' vote around 'the economy' is hard to qualify nor quantify."
It's not that difficult to Google for poll results:
Pre-election: "As concerns around the state of the economy and inflation continue, about eight-in-ten registered voters (81%) say the economy will be very important to their vote in the 2024 presidential election." (https://www.pewresearch.org/politics/2024/09/09/issues-and-t...)
Post-election: "Among 2024 voters, the state of the national economy and the level of inflation were seen as reasons to support Trump by double digits." (https://navigatorresearch.org/2024-post-election-survey-the-...)
There's plenty of other polling data from the November 2024 election. What is it that people are finding it difficult to quantify or qualify?
nuancebydefault
I did not search for such polls, thanks for that. If it is true, what I still find hard to believe is that there is a link between yelling 'I fix it' and the effect on the economy. Economic history teaches that starting a trade war on terms of 'they are treating us badly' or not, has consequences that are bad for the economy. One of the Bushes has tried the same thing and had to roll it back because the heavy backfiring. Yelling 'I will stop this and that war using my charms' doesn't appear to have successful precedent either.
ThrowawayR2
Oh, believe me, I agree with you that the voters have made a spectacularly poor choice if they were hoping to get the economy improved. But that's not the topic; the question is how the Democrats failed to understand the economic hardship of the voting public when it's literally their job to be in tune with voters and why there's still some level of denialism hanging around with Democratic leaning voters about the state of the economy.
bdangubic
[flagged]
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bell-cot
Sounds right. I'm in a major university town in SE Michigan. In recent years, apartment rents rose by ~4X the "official" gov't rate of inflation.
Supposedly, the townies and students are diehard Democratic liberals. But especially around campus, voting statistics show Trump getting many more votes last November (and Harris many fewer) than the stereotypes would suggest.
johnmaguire
So, having grown up in Ann Arbor, it's pretty clear that's the city you're talking about. Ann Arbor has had a big issue with NIMBY-ism preventing new developments for decades, and that's nothing new. Additionally, the entire city council and mayor are registered "Democrats" but that doesn't necessarily mean that they are progressive - or even if they are, that they care about housing as a primary issue.
70% of voters in Washtenaw County voted for Harris: https://electionresults.ewashtenaw.org/electionreporting/nov...
Compare that to 72% of voters who voted for Biden in 2020. I don't see much of a discrepancy: https://electionresults.ewashtenaw.org/electionreporting/nov...
bell-cot
Un-rounded, county-wide, it was a ~1.5% drop in votes for the Dem presidential candidate (from 2020 to 2024).
Along with that, the voter turn-out dropped by ~2.2%, in a heavily Democratic County.
Nationally, the Dem's went from Biden's 2020 51.3% of the popular vote, to Harris' 2024 48.3%. Darn close to what you'd get by extrapolating the county numbers.
(I agree with your comments on A2's local issues - but from coverage of the RealPage scandal, NIMBY-ism elsewhere, etc., I suspect we're not too unusual that way. And rather large quantities of high-rise rental housing have been going up around campus and downtown A2 in the past decade.)
johnmaguire
I just want to point out that 51.3% - 48.3% = 3%, which is twice the difference that appeared in Washtenaw County (1.5%.) I wouldn't consider that to be equivalent myself, though I'm not sure what it tells us exactly.
psytrancefan
The inflation rate is an index over a huge number of datasets.
If a single stock I own that is in the S&P 500 has a bad year while the S&P 500 index still goes up it doesn't mean the index is wrong or useless. It means you don't understand the calculation method and purpose of the index.
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k310
I'm not believing one iota of info from the current government, especially as much of existing data is disappearing. The Ministry of Truth (social) is here.
So science has to go underground, reminiscent of the dark ages.
from-nibly
The government has always been the ministry of truth.
> I don’t believe those who went into this past election taking pride in the unemployment numbers understood that the near-record low unemployment figures — the figure was a mere 4.2 percent in November — counted homeless people doing occasional work as “employed.” But the implications are powerful. If you filter the statistic to include as unemployed people who can’t find anything but part-time work or who make a poverty wage (roughly $25,000), the percentage is actually 23.7 percent. In other words, nearly one of every four workers is functionally unemployed in America today — hardly something to celebrate.
But U6 unemployment is also near a 20-year low[0], as is the poverty rate[1].
[0] https://fred.stlouisfed.org/series/U6RATE [1] https://fred.stlouisfed.org/series/PPAAUS00000A156NCEN