A week after diving to a new pandemic-era low, US jobless claims… well, they dove to another pandemic-era low.
547,000 Americans filed for unemployment benefits last week (figure below), down 39,000 from an upwardly-revised 586,000.
This marks another step in the right direction (second figure below). You might even suggest that claims are on the road to normalizing, even if there are still “miles to go before I sleep,” so to speak.
The four-week moving average fell to 651,000. It’s now nearly 50,000 below the pre-pandemic all-time weekly high set in the 80s.
The market was looking for 3.6 million on continuing claims. The actual print was 3.674 million in the week to April 10.
I can only reiterate the boilerplate narrative. The headline claims figure is further evidence to support the contention that the US labor market is on the mend.
This also helps to dispel the notion that the extension of pandemic-related benefits is turning the US into a nation of lazy freeloaders, a contention implicit in too much of the public discourse these days.
When you hear that kind of commentary emanating from the masses (e.g., on social media or from someone who could accurately be described as an “everyday” American or a middle-class citizen), just note that statistically speaking, those folks are likely to benefit from Democratic initiatives aimed at fostering a more inclusive economy and expanding the social safety net.
Attempting to drive that point home in these pages is a delicate balancing act. My audience is varied. However, I’d wager that only a tiny fraction (if any) of my readership is truly “wealthy.” With that in mind, allow me a tangent, which will help make this otherwise run-of-the mill jobless claims article worth the time you spent reading it.
Obviously, a sizable contingent of the readership here is a semblance of “rich.” But “rich” is something entirely different from “wealthy.” The latter is a category to which you almost surely don’t belong — if you did, you’d know it.
You can be “rich” and not realize it or, more aptly, you can be rich and not appreciate just how fortunate your circumstances are. By contrast, if you’re truly wealthy, there’s no mistaking your circumstances. When you go Porsche shopping, for example, you don’t even look at the cars parked on the lot. You stroll straight to the back of the dealership, sit down at someone’s desk and special order yours from Stuttgart. That’s “wealthy.” “Rich” is the poor guy outside kicking the tires on a Macan you wouldn’t be caught dead in.
That’s not just a fun hypothetical I conjured, by the way. It’s an account based on my conversations with a local who I mentioned in a classic piece published last year.
If that’s you (i.e., you’re ordering your Porsches straight from Stuttgart), then yes, it’s understandable why you’d fear Democratic social initiatives. In all likelihood, they’ll cost you money. (On the other hand, they might stave off a modern day peasant revolt, which is something you don’t want.)
But if you’re Macan shopping, you’re not wealthy. And odds are, a more prosperous overall US economy will end up being a net benefit to you over the long-run and quite possibly over the short-run too, depending.
I grow weary of listening to Americans complain about more progressivity and redistributive agendas when they’re statistically unlikely to be worse off under such a policy regime.
Yes, there is a narrow band of households who fall somewhere in a gray area between “rich” and “wealthy,” and for those folks, a Progressive agenda could conceivably be both detrimental and unfair. But, I steadfastly contend that that cohort is extremely small and very idiosyncratic in terms of composition. I live amongst some folks who I’d put into that category and I try to give them a break when I talk politics with them. Generally, they’ve accumulated something close to actual “wealth,” but their stories are unambiguously meritocratic (as much as a story can be), and it isn’t clear to me that hitting them with a punitive tax is at all justified. But do note the concentration of such families in my orbit is not indicative of their prevalence in society. It’s purely a function of where I live. This place is a magnet for well-meaning people who fall somewhere between “rich” and “wealthy” and don’t want to be bothered with any pretensions to city life or “high society.”
Bottom line: Celebrate good news for people less fortunate than you. And celebrate policies aimed at ensuring they continue to get good news. If you can plausibly suggest that such policies will have a materially detrimental effect on your finances and your life, then by all means, complain. But make sure you know who you are first. For the vast majority of Americans (even rich families), someone else’s suffering isn’t your gain.
Read more: You Are Not Capital. You Just Think You Are
Amen.
The only argument that ever truly lands with me, though only in a limited way, is the personal responsibility one. I don’t mean that I subscribe to the “if I did it, you can too, so no pity from me;” rather, I do believe that the only way for class mobility today is an extreme delay of self gratification. I say this based not on a representative sample, but only on my working life behavior. I get that does not make it empirical.
I don’t bother myself with “who’s getting a handout” below me. I make a decent living and live well below my means, and I’m not hurting for contentment. What I do get angry with, however, are the invisible barriers that I hit as my progress continues. It’s almost like it’s by design.
Probably because it is. Should you feel the need to shake your fists or wag your finger, always point up, on the rare occasion you aren’t pointing at yourself.
“Should you feel the need to shake your fists or wag your finger, always point up, on the rare occasion you aren’t pointing at yourself.” Well put, thank you.
I’d be highly surprised if most wealth has anything to do with merit or hard work. The small number of truly wealthy
folks I have known, inherited most of their wealth and, at best, managed it well . Of course, those are also the
people who complain constantly about the taxes they pay and how those taxes are spent…….especially if they think
their taxes are being spent on anyone they consider undeserving.
It is ironic that people who are “wealthy” think they deserve it. Mostly. Not in all cases, of course.
Three Italian scientists published a paper in 2018 about modeling wealth distribution and the role of luck in who ends up on the “wealthy” end of the power law distribution. The paper, and educated layperson’s type of articles that are to be found on such venues as the MIT Technology Review, have been subject to hand wringing criticism.
If one doesn’t have time to read the entire paper, which is, by the way, freely available to the public, on arxiv.org, at least read the abstract and the conclusion.
This is a very fine and balanced article. I would like to see it copied into mainstream media. I have seen almost no writings that speak to the middle ground. As the Bruce Springsteen song said finding the middle in this country is hard. I think you found it.
This piece hits home for me. I have no idea what your cutoffs are for upper middle class, rich, and wealthy. Just for perspective, my net worth is mid-single digits millions, earn about $500/year in a normal year, am in my early 50s, and live in a medium-sized city in the Midwest (a HUGE plus for cost of living). While I own a Porsche, it is a nice Cayenne and not a paint-to-sample GT3RS Weissach edition. I work 50 hours per week and have had a very good run so far. At age 29 my net worth was negative $100,000 due to student loans.
I fully appreciate that I have already won the lottery by being born in the USA, blessed with great parents who stayed married, have some God-given talent in being reasonably bright, and a good work ethic. I thank God every day for my good fortune and I completely understand that there are about 8 billion people who would happily take my place. I suspect that when you describe your average reader I am right down the middle of the fairway.
However, I also agree that my demographic is the one that gets hammered. We earn too much for ANY type of child tax credits (I have three), the deductions phase out, the SALT cap crushes me, absolutely no financial aid of any kind for schools, no credit for charitable deductions any longer, and I have a very simple tax return with no fancy ways to offset any income. When factoring in federal income, state income, property tax, sales tax, gas tax, and all of the other miscellaneous government fees and taxes, my effective tax rate is far larger than it should be for a competently run society. Yes, I live a very comfortable life, but there are plenty of things that I could do with the money that goes for taxation. I should note that my wife is an RN in a field that it is very high demand. However, at a marginal tax rate exceeding 40%, it makes no sense for her to work.
The part that absolutely drives me up the wall is when Warren, Sanders, Biden, AOC, et al., claim that I am not paying my “fair share” and that I need to be taxed more. My family uses almost no government services, yet my tax bill is huge. The top 10% of earners in the USA pay 71.4% of all federal income tax. Yes, I know that everyone pays FICA, Medicare, Medicaid, etc.
I am solidly right-wing, but completely support government programs for children, the elderly, the disabled, veterans, and the temporarily unemployed. I can even get behind UBI if we got rid of all other programs. Its MUCH for efficient and simpler to administer. I just hate being vilified by the Left as if my small financial success was due entirely to luck. It wasn’t. Like millions of others in the land of opportunity, it was a mix of work, circumstances, timing, and luck.
A suggestion to the Left. Perhaps you should change your tune and say “Thank you”. It would go a LONG way to line up support from people like me if you pitched something along these lines: “You are blessed. You live in the best country on earth with limitless opportunity. You worked hard and made something of yourself. The system allowed you to do that. A by-product of that system is that many people fall behind. If we want the system to continue to succeed, it is critical that we help people who are not as fortunate. We appreciate you and your disproportionate contributions in helping out your fellow countrymen.” Instead, all I get from current Democrats in Washington is “You are greedy for wanting to keep what you have earned, we want more.” It honestly is infuriating.
Thank you for posting this article and thank you for allowing me to vent a bit.
As someone from a different part of the political spectrum, I appreciate your comment. One of the many problems with US politics is that it is treated like a zero-sum game, and is seemingly incapable of meeting the challenge of the economic reality (silent depression, or choose a favored euphemism for the same), which is due to the deep structural forces of the global economy, such as the balance of payments and the “exorbitant burden” (on the mainstream domestic population) of maintaining the global reserve currency. The domestic economy is simply not designed to work for 90% of the population. The question is (for those operating in good faith) what to do about it. The question has been avoided for at least half a century now, merely covered up over and over again with debt. Now, I’d argue, the question has become so pressing that it has called the legitimacy of the political system itself into question.
Anaximander: I also appreciate your comments and agree with them. We could no doubt mutually lament the corruption, dishonesty, partisanship, and incompetence on both sides of the aisle. We deeply need some center-right and center-left politicians who care more about the country and its citizens as a whole than they do about their particular base. If these particular politicians happened to be bright as well as virtuistic, then all the better.
Interesting comments about the necessities of structural deficits created by the petro-dollar regime and the status of reserve currency. I also generally agree. Do you think that the USA has, in the aggregate, benefited more than its been harmed by this status?
Appreciate that. Personally I think that the demands of empire have been deeply negative in aggregate for the USA, qua republic that necessarily derives its political legitimacy from the will of the governed. At least after Bretton Woods and once deregulated globalization really kicked into gear. I am also originally from a key rust belt city, and have tracked this over the decades there with my own eyes.
Thumbs up for the above
I’ve owned my Porsche for 22 years and counting . . . plan to run it until either of us dies . . . therefore I consider myself agnostic.
At the end of the day, creating wealthy individuals should not be the purpose of an economic system, just the tolerated byproduct.
Ok, i may actually qualify as “wealthy” , even by your definition.. i do own a porsche that generally languishes in the garage as my rolls royce is so much more appealing to take out for a spin, and the beamer doesn’t raise any eyebrows at the local shop..
I am a big investor, public and private… at the margin the cgt change would FORCE me to seek yield over investing in growth.. take the morality out of it.. it just changes the incentives for a rational allocator of capital.. it wont change my lifestyle, but it will push my capital into rentier and less creative places than i think it should be.. its just maths.. gains on capital at risk should be treated more favourably by the tax system than near certain income gains.. because there is a risk of partial or total loss..
I have been very lucky, I can live with the tax change, but i think it disincentivizes growth investment, and makes very marginal impact on the deficit..