According the numerous economists and publications, the American economy is booming, yet most Americans polled disagree with that assessment and many say they were better off during the Trump years. What gives?
My progressive friends tend to dismiss these poll results, saying it’s mostly “low-information” Trump supporters who on down on the economy and their opinions don’t matter. That’s because Trump supporters are dumb, deluded and willfully ignorant - per my friends, not me!
Which got me wondering: how do Americans arrive at their opinions of the economy?
“Overall, our cross-country comparison for 10 [developed] countries concludes that the phenomenon of a discrepancy between [official economic indicators] and consumer sentiment is not unique to the United States but is prevalent across multiple countries.” - The Cost of Money is Part of the Cost of Living: New Evidence on the Consumer Sentiment (Bolhuis et al, 2024)
Compared to many European countries, America seems to go rather easy on its high-income taxpayers…Of course, appearances can be deceiving.
The gap in Black-white homeownership rates recently reached 30.1% in the U,S. Per Jung Hyun Choi of The Urban Institute, three factors explain around 80% of this gap: difference in Black-white income (31%), marital status (27%), and credit scores (22%).
Andre Perry and David Harshbarger of the Brookings Institute have already crunched those numbers. To quote:
…approximately 11 million Americans (10,852,727) live in once-redlined areas, according to the latest population data from the Census Bureau’s American Community Survey (2017). This population is majority-minority but not majority-Black, and, contrary to conventional perceptions, Black residents also do not form a plurality in these areas overall. The Black population share is approximately 28%, ranking third among the racial groups who live in formerly redlined areas, behind white and Latino or Hispanic residents…While still a tremendously large population, the approximately 3 million Black residents in redlined areas account for just 8% of all non-Latino or Hispanic Black Americans.
Proximate cause (direct cause): Occurs immediately prior to the [outcome of interest]; directly results in its occurrence and, if eliminated or modified, would have prevented the undesired outcome
Root Cause: One of multiple factors (events, conditions or organizational factors) that created the proximate cause and subsequent undesired outcome. Typically multiple root causes contribute to an undesired outcome [my italics].
Root Cause Analysis: A method primarily used to identify the underlying cause of an incident or issue, and more effectively mitigate or prevent future similar incidents.
— So the question for this post is: how would we know whether the historical practice of redlining created a causal pathway that led directly to the current Black-White homeownership gap in the US? In other words, was redlining one of multiple factors responsible for the proximate causes of the Black-White homeownership gap?
Per the Fed, in 1990, whites owned 90% of US household wealth, with Blacks owning 4%, Hispanics 2%, and Other (mostly Asian) 2%. In 2023, whites owned 82% of US household wealth, with Blacks owning 4%, Hispanics 3%, and Other 10%.
As a consequence of these trends, young adults make up more of the lower portions of the income and wealth distributions than they used to. And that’s probably ok, because all the knowledge, skills and experience they’re acquiring in their 20s will come in handy when they finally set their minds to serious wealth-building in their 30s.
Per the US Census Bureau, here are the highest levels of education achieved by Americans in 2022: 37% have a bachelor’s degree or higher, 25% some college or an associates degree, 28% high school diploma, and 9% less than a high school diploma or its equivalent. And per the Federal Reserve, Americans with college degrees or higher own 71% of the country’s wealth…
A question I have is how much wealth-stagnation in the lower income groups has to do with education and marriage trends. Specifically, age at first marriage has increased by six years since 1990 and the percentage of Americans with four-year college degrees or higher has almost doubled, from 21% in 1990 to 38% in 2022. As a consequence of these trends, young adults make up more of the lower portions of the income and wealth distributions than they used to.
The Federal Reserve provides information on the distribution of U.S. household wealth in the form of interactive charts and tables. These allow users to explore household wealth components, shares and levels across various groups and time. The information was last updated in September 2023. This post will cover wealth assets and trends by wealth percentile group. First, a very brief explanation of terms.
In other words, I’ll address how politicians and elected officials might be able to persuade the public and powerful interests to go along with disagreeable policies that promise plenty of short-term pain and almost no immediate payoff, all for an eventual yet somewhat uncertain greater good.
…self-management interventions significantly and positively impacted all challenging behaviors assessed (i.e., on-task behavior, prosocial behaviors, disruptive behaviors, and following directions) and academic outcomes (i.e., achievement and work completion).
But the US doesn’t just have a skills shortage - it also has a labor shortage, meaning there aren’t enough working-age adults living here to fill available jobs. We need more workers. In other words, we need more immigrants.
This is a problem of employability. Too many Americans lack the experience, knowledge and skills that employers want. On the individual level, lack of employability is associated with unemployment, poor job performance, and low wages. When widespread, a lack of employability negatively impacts a country’s labor productivity, standard of living and its potential for economic growth. Increasing the people’s employability boosts productivity, standard of living and economic growth, which translates to higher tax revenues for paying down the federal debt. So how can the US increase the employability of its people?
Main Findings: Permanent supportive housing interventions appear to improve short- and long-term housing stability for persons with lived experience of homelessness… Peer support alone does not impact housing stability. Inconsistent results on mental health, substance use and other social outcomes require additional research.
As noted, the ASBI would not be means-tested, so recipients could work part- or full-time. Although the ASBI would partly replace federal student aid programs, state and institutional aid programs would not be affected. Unlike Pell Grants, the ASBI would not drive up school fees because the amount of payment is not adjusted for the cost of attendance. Instead, the ASBI would turn students into cost-conscious consumers. It’s their money, so the less they pay for school, the more available for other expenses. The ASBI would also make students think twice before choosing an expensive private school when a cheaper but perfectly adequate public option is available.
Comparative studies have shown that in most countries an increase of around 40 points in the PIAAC numeracy score leads to a wage increase of between 12% and 15% of the reference wage. (Hanushek et al, 2013). But the wage increase is as high as 28% in the United States. So if the reference wage was $20 an hour, a wage increase of 28% would bring that up to $25.60 an hour, or an additional $224 a week for full-time workers.
And one study found that an increase of around 40 points in the PIAAC literacy score was associated with a 6% increase in hourly wages, on average, across several developed countries, including the United States (Kankaraš et al, 2016).
Mmmm. Why do Iowa and Kansas have such low poverty levels?
Why do some people seem more deserving of government assistance than others?
Social scientists have been exploring this question for decades. Much of the research has focused on the criteria people use to judge the “deservingness” of the vulnerable and poor.