It's one thing to feel financially tight. It's another thing to have endless news articles and publications and posts warning of how bad the global economy is and how inflation is running out of control.
Not only does this constant negative message directly cause stress on the viewers, but it can cause fear in business which can lead to "precautionary" retractions... which can exacerbate the actual market problems.
Decision-makers in companies will make harsh short term decisions either to look responsible to shareholders or to cover their asses from upper management, and these decisions can have negative long term consequences to the company, employees (especially those laid off), and the market in general.
How often do we see news of mass layoffs, and a month or two later we see a big hiring round from the same companies? This is grossly inefficient for the companies, and it's obviously very harmful to those let go.
If the media didn't jump on every potential disaster with such fervor, we would all be better off. But promoting fear gets attention, and attention is potential revenue... or votes.
I think it's great to check media sensationalism, but I think there's a massive disconnect between the impacts of inflation on highly paid software engineers, and most Americans.
It's also a bit strange to see you view media as a completely separate entity from "decision-makers in companies". My experience has been that most decision makers in companies get most of their ideas entirely from the board and major investors. I recently left a publicly traded company, and pretty much every time our "leaders" met with the border and major investors they would come back singing a very different tune then they went in.
But these same major investors and board members also have relationships with people running major media companies (which are also just companies), in many cases they may even be the same people.
There's this trend I've seen on HN to just dismiss anything that seems wrong with the world, no matter the evidence, with "media sensationalism", as though we are living in fantastic times if it were for that pesky media distorting our views.
As the child of blue-collar parents, I'd agree that there's a lot of price anxiety in their neck of the woods.
I'd also add that the statistics can be misleading: of the jobs added, many are in food services and front-line healthcare. For the former, the positions don't provide hours and pay poorly. Not a great area to be adding jobs in amidst high inflation and depressed lending.
> I think it's great to check media sensationalism, but I think there's a massive disconnect between the impacts of inflation on highly paid software engineers, and most Americans.
Thank you for saying this, it's exactly what was going through my head while reading that post.
The very idea that money problems are in people's heads, while it can be true, people are panicking not because the media told them to but because they can see for themselves that they don't make enough money.
If you've never been through it you may not understand. When we hit the recession in the early 90's my family quite literally did not make enough money to afford everything month to month (stepfather worked at a grocery store). We were slowly going into debt just to survive (bills, housing, food, gas).
As far as I can tell, the mainstream media is working overtime to _downplay_ the actual state of things.
I'm a computer programmer with an advanced degree and three decades of experience and until about a year ago, I got a dozen unsolicited job offers a month. Now I can't recall the last time I saw any. Reddit's /r/cscareerquestions used to be flooded with people complaining about persistent recruiters, now it's flooded with credentialed people who've been looking for a job for months with no success.
My wife and I both make good salaries in a relatively low cost of living area and we're suddenly finding ourselves cutting back drastically just to keep from falling behind. I track my finances pretty carefully and I can compare what I spent on groceries and gas and medical expenses later year vs. this year (against the 0% pay raise we've both gotten for the past few years) and it's quite a bit.
I'm in a good position since I bought a house a long time ago at a fixed mortgage rate and am still employed, but I can't even imagine how people even a little worse off than me are doing... all while the network news and the places on the internet that haven't been shadowbanned are insisting that we're just exaggerating the scope of this financial crisis.
I remember 2000 and 2008, and neither seem like anything compared to this.
Don't shoot the messenger. If anything, inflation and shrinkflation's effects on the average American are, in my opinion, understated; and Thomas Jefferson (if you've ever read his comments about inflation) would've been calling for hangings.
Also, worth remembering, the median American income is $40,480 /yr., while median household is $74,580 /yr. Half of Americans make less than that per year. 20th percentile income, by median, says that 1/5th of American households make less than $28,000/yr (no law of averages with high earners skewing the result here). One glance at the housing market, or inflation, and I think they have every right to feel angry.
This is hardly just the news talking too much about the thing. Cumulative inflation over the last 4 years has been insane and most people haven’t gotten double digit raises (just to tread water in the best case). People feel the pinch because it’s an actual fact in their day to day life
> Between 2019 and 2022, hourly wage growth was strongest at the bottom of the wage distribution. The 10th-percentile real hourly wage grew 9.0% over the three-year period. When we look across the wage distribution, we see wage growth declining for each successive wage group until we reach the high-wage group. Compared with the 9.0% wage growth at the bottom, growth was less than half as fast for lower-middle-wage workers (3.9%) and less than one-third as fast for middle-wage workers (2.4%) between 2019 and 2022. Upper-middle wages grew even more slowly at 1.8% over the three-year period, while the 90th-percentile wage grew 4.9%—faster than the middle wages, but not as fast as the 10th-percentile wage.
If someone makes 25k and gets a 2.5k (10%) raise over a few years, they still aren't as well off as someone who made $200k in 2018 and got laid off and now only makes 120k.
I know you were responding to a comment about raises but seeing "done the best" in any context for the lowest earning workers feels odd.
Painfully tonedeaf comment. If you're at poverty level, not making ends meet, and inflation is 30% and your wage growth is 9%, you are falling behind. If you are above "making ends meet" and your income growth is only 3% but you are still "making ends meet", things are fine for you.
Inflation is absolutely decimating the lower half of the country. Your numbers are sophistry.
100% don't believe it. And you missed the overall conclusion from your own link:
> While our analysis finds fast wage growth at the 10th percentile and wage compression within the bottom 90% of the wage distribution, highly unequal wage growth has led the very top to amass a greater share of the overall earnings distribution, contributing to worsening inequality.
Perhaps more importantly and that during inflation/shrinkflation the median income has _decreased_ so not only do you get less for your money you also have less money!
I will say though on inflation we should shoot the messenger. Inflation is a disease; it describes a symptom (increased prices). The word inflation does not describe at all why prices increased. Did oil get more expensive so the cost of revenue increased? Did a company realize they were charging below market rate? The news can be do a tiny bit of investigation before reporting on it for hours on end.
> not only do you get less for your money you also have less money
The figures you cited are real median income, meaning the effect of inflation has been backed out.
The C-CPI-U was around 8% in 2022. If the Census report says that real incomes (what your paycheck can buy) decreased 2.3%, that means that nominal incomes (the numbers on your paycheck) increased by a little over 5%. The unlabeled table on page 14 shows that they used 7.8% as the deflator for 2022.
Do not repeat the nonsense that "not only has your [real] income decreased, but inflation has made things more expensive". That may or may not be the case, but if you're going to cite both, you should be citing nominal income, not real income. (In particular in 2022, this was not the case and this error leads the reader to an incorrect conclusion.)
I think a portion of people who say things like this don't know what they're talking about. Another portion knows exactly what they're talking about but realizes that other people won't and is able to spin misleading messages out of that gap in understanding. (Make no mistake, there are actual problems facing the median income American, but there is also a lot of mis-speak about them, some of which is intentional.)
> Do not repeat the nonsense that "not only has your [real] income decreased, but inflation has made things more expensive".
Non-Sequiter. That isn't a quote of something I wrote.
The thing I actually wrote is "so not only do you get less for your money you also have less money!". Which is accurate. Shrinkflation means when you go out to buy detergent you only get 15.5 oz instead of 16oz so you're getting less for your money. Real income decreasing by 2.3% means you have less money. "so not only do you get less for your money you also have less money!"
People really aren't going to care that their income is up 5% if the rent is up 8% ... The real value is noticed.
> Real income decreasing by 2.3% means you have less money.
You still appear to not understand.
You have MORE money in your paycheck (if you were a median income earner in both 2021 and 2022). That money just has less purchasing power by a greater amount than the increase in money.
More money (nominal income is up), but less purchasing power (real income is down).
I also can't stand, when it comes to inflation, that the media talks about a low-inflation quarter as though it is "relief for consumers."
What about it is relieving? Prices haven't gone down, prices aren't going down, we're supposed to feel relieved that prices are still going up, just slower?
I honestly dare the bankers on the Federal Reserve, and frankly, all of Congress, to live on a 20th percentile income. They'd be all over inflation in seconds once reality set in.
Edit: I might mean 80th, I'm struggling to remember which end is lower (20th or 80th).
The number of voters benefiting from student loan debt pauses is relatively small and they are also mostly not swing voters. I agree we should resume student loan debt payments, for a variety of reasons.
In the fall of 1972, President Nixon announced that "the rate of increase of inflation was decreasing". Probably the first time a sitting president used the 3rd derivative to increase the chances of reelection.
20th percentile means 20% of people earn the same or lower. 80th percentile would mean 80% earn the same or lower. So you were correct in the first place.
The BBC is a British institution though, and the British media has treated the effects of inflation here very differently to how the American media did, with endless front-page coverage of every last detail and prediction and problem whereas the American media downplayed the issue and how badly people were doing in day-to-day terms and instead told readers that inflation was some partisan Republican narrative.
Not sure if you are American or not, but at least from my prospective experience as someone in the US there seems to be a never ending glee from the media in predicting an imminent economic downturn and there were/are constant articles and stories about how difficult the economic situation is, how bad inflation is, and so on.
Maybe a Democratic Party partisan outlet would say it is just a Republican talking point but the average news media outlet I have seen has had something negative to say about the economy every week for the past few years.
It's not as applicative in this case, at least for the UK.
As a software developer based in the UK, the inflation mentioned in the article is felt very deeply by myself. The article cited 7.2% as the price inflation rate, which is close to the rate of 7.6% calculated by the Office for National Statistics based on my household spending[1] and is consistent with my personal experience.
On top of that, the UK Treasury adjusted the personal tax threshold policy back in April this year, basically freezing the tax bands to no longer rise with the inflation, which caused a direct 3.3% hit on my income. This freeze is estimated to be the largest over 50 years according to BBC[2], but since we are discussing media sensationalism, so maybe that's not something that would convince you.
Anyway, maybe the situation is different elsewhere, but I do find this article more truthful than not from where I stand.
> The article cited 7.2% as the price inflation rate, which is close to the rate of 7.6% calculated by the Office for National Statistics based on my household spending[1] and is consistent with my personal experience.
Do you know if those figures factor in non-consumables like housing and insurance?
Asking because many US areas are seeing 20-100% jumps (or higher), year over year over year. When your largest expenses skyrocket, single digit increase stats don't reflect reality well.
Not sure about the post's article one, but yes on the ONS calculator. Basically one enters their expenditure by categories and it will calculate the overall inflation rate. Though personally I wasn't impacted by these two categories.
You can directly view by kind on ONS as well[1]. It states CPIH over 12 months rate in July 2023 is 5.4 for housing and 9.0 for health.
Florida. We moved in 2021 to same size house (but 25mi further out) and our rent is 1.95x our last rent. Rents generally doubled in our last neighborhood, one expired lease at a time. Typically, long existing tenants were not given opportunity to renew and new tenants got the new doubled rate.
Some of those old tenants joined the ranks of homeless people with savings, because there was nowhere to go. My sister may be one (diff state). We'll know more tomorrow.
The media sensationalism isn't the underlying problem, it just exposes it. The modern economy runs primarily on the confidence and emotions of the market participants. It is at the mercy of an irrational mix of evolved ape behavior.
You are right, except in this instance there is very objective proof that inflation and homelessness are problems that have gotten worse recently and are having widespread impacts. If the media choose not to cover this, because of whatever reasons they have (maybe they worry about frightening the public ?) then it will not be addressed politically. They are called the 4th estate for a reason. They determine what political discussions are allowed. Inflation is an important issue for lower income and middle class workers.
Laying off then hiring should be a positive. Presumably the laid-off were your worst talent and workers, while the new hires are at least randomly distributed and should be selected towards the upper end of the talent range.
Unless you managed to somehow change the intellectual characteristics of the labor pool in the span of less than a year, this is impossible on an industry-wide basis. At best, one company gains and another loses, but even if it evens out, the deadweight loss of unemployment payouts, time spent applying and interviewing, onboarding and offboarding, relationship upheavals, all make this a net negative activity socially.
Again, that’s not how it works. You don’t lay off bad employees, you lay off randomly or lay off teams you no longer need or want. Layoffs are an opex reduction exercise, not a house cleaning.
That's not always true. Some layoffs cut entire organizational units regardless of individual performance. Others cut a certain percentage across the board (sometimes with exceptions for strategic growth areas). The CEO might tell every manager to cut 10%, and obviously they're going to take that chance to eliminate their worst performers.
> can cause fear in business which can lead to "precautionary" retractions... which can exacerbate the actual market problems.
Thing I learned a long time ago from an experience[1]. Managers often place more trust in what they read in rags like the NYT and the WSJ than they do their in house experts. Which is crazy because the guys that scribble for those outfits are relative buffoons with a knack for writing and nothing else. And relying on third hand bullshit most of the time.
[1] VP said we were idiots because what were were saying didn't line up with an article he read in Inc Magazine.
It's one thing to feel financially tight. It's another thing to have endless news articles and publications and posts warning of how bad the global economy is and how inflation is running out of control.
Not only does this constant negative message directly cause stress on the viewers, but it can cause fear in business which can lead to "precautionary" retractions... which can exacerbate the actual market problems.
Decision-makers in companies will make harsh short term decisions either to look responsible to shareholders or to cover their asses from upper management, and these decisions can have negative long term consequences to the company, employees (especially those laid off), and the market in general.
How often do we see news of mass layoffs, and a month or two later we see a big hiring round from the same companies? This is grossly inefficient for the companies, and it's obviously very harmful to those let go.
If the media didn't jump on every potential disaster with such fervor, we would all be better off. But promoting fear gets attention, and attention is potential revenue... or votes.