Everyone Agrees the Economy Is Lousy, Except the Economy
It's become an article of faith among this year's electorate that the U.S. economy is built on a house of doom and gloom. Bernie Sanders's rally against plutocratic millionaires catapulted him to unexpected success, as did Donald Trump's call to Americans that they and their country "just don't win anymore." Messages of struggle, trade deals gone wrong and an economy rigged against the average voter have all proved successful recipes and right wing voters lined up behind Trump's promise that "I, alone, can fix it," agreeing that something out there needs fixing.
The past year's politics have been well-suited to a country buried deep in recession. Which is why it's so weird to see these messages resonate in 2016, because most of the data we have on hand say that things are going pretty well .
This morning the Bureau of Labor Statistics reported the U.S. added 151,000 jobs (though missed expectations for 180,000 payrolls) and saw the unemployment rate unchanged at 4.9%.
In general, unemployment is down, wages are up, the quit rate (a good measure of worker confidence) is at levels last seen in summer 2008 and hiring cycles take longer than ever. It may not be 1996 again, but on a scale of lousy to crushing it, all the numbers say that the economy is aggressively O.K.
So why do so many people disagree?
That's the question that puzzles economists and politicians, and it's far more than a puzzle for out of touch eggheads. Labor statistics are supposed to represent the real-world experiences of workers across the country. When the quit rate ticks up, underneath that are supposed to be thousands of new people who would agree with the statement, "I felt confident enough to leave my job."
A common explanation for the success of pessimism economics is the resentment of a very specific class of older, white men without a college degree, the former factory workers and Midwestern homeowners who got left behind when the world went digital and the housing market fell out. In two decades they watched both their livelihoods and their greatest single assets dissolve into nothing.
There's some truth to this, but as an explanation it's insufficient to explain the demographic sweep of the Trump coalition or the youth-fueled populism of the left . Messages of economic uncertainty are receiving a sympathetic hearing from the coffee houses of Seattle to the churches of Savannah. They unite steelworkers and hipsters alike, perhaps the only cultural touchstone these days which can.
So allow an alternative explanation to what's going on: the economy isn't doing that well at all, and voters feel it powerfully.
In 2014 Harvard Business School professor Michael Norton published a study finding that people feel the pain of economic loss far more intensely than they do the happiness from economic gains.