Last week, I sat down with Jeremy Hobson on The Middle, alongside CNBC’s Steve Liesman. The Middle is a call-in show, and Jeremy invited his listeners to answer one question: What’s the state of your economy?
This was different from what I normally do. Usually, I talk to folks in the media about economic data: jobs reports, inflation numbers, or survey results. This time we were talking to the people those numbers describe. The callers were a wide range of people: an IT worker who’d been laid off, a physician, a woman in Wyoming whose husband is a trucker, a dad applying to medical school, and a DoorDash driver with a master’s degree.
Over the hour, one thing kept coming up, again and again. The economy is growing, but the gains aren’t reaching the people who do most of the work.
Here’s how I think about it. The American economy is a big kitchen. In that kitchen, everyone works together to bake a pie, and that pie is GDP. Then we slice it up and distribute it. You’d think that the bigger the pie, the better that is for everyone. But you can still slice a huge pie unevenly. Right now, the piece of our pie that goes to owners—what economists call capital—is massive. That’s in comparison to the slice that goes to workers, also known as labor. The pie has grown, yes, but some people are still going hungry.
On The Middle, Jeremy asked me to grade the economy. I gave him three grades, because really, doesn’t every class need a rubric? Owners get an A. Worker’s lives (the economic reality they all live with) that gets a B. And how workers feel about it gets a C. As we’ve been talking about recently, consumer sentiment is at a record low, and I think I might know why:
Some of the pie-slicing is done via policy. Al, a physician, called in from Las Vegas to talk about the One Big Beautiful Bill. He saw it as a massive transfer of wealth from the bottom to the top—and he’s right. That bill gave tax cuts at the top and cut Medicaid and food stamps at the bottom. The popular pieces, like no tax on tips and overtime, expire around the next presidential election. But the tax cuts for the rich? Those are permanent.
Then we took a call from Kira, in Boulder. She’s got a master’s in international economics and she lost her job during COVID. When she tried to go back to work, employers told her that the gap in her resume was too long. When she tried to go back to school, programs told her that she had too much education. She now drives for DoorDash, where she gets endless deliveries, because her wealthy neighbors order a lot of food.
Boulder is a microcosm of the U.S. economy. Owners are doing great. They might own a home, or a second home; they go for nice hikes (and they order delivery). Kira is a worker, and so she eats from the workers’ slice.
Jeremy asked whether gig work is still viable as an option. It is, and it works as a shock absorber for the economy. You lose your job and you can get busy that same day. But the official statistics count gig workers as employed. That hides how little many of them earn.
If Boulder’s economy suffers a downturn, more people will start driving, and each driver will make fewer deliveries per hour. Kira’s wage could fall (possibly by a lot).
At some point, a shock absorber starts to look like exploitation. I don’t know where the line is, but I do know it’s a question worth thinking about.
Steve also argued that America never has an honest conversation about distribution. I think he’s right. The pain of being left behind shows up as deaths of despair, and as an anger that wants to burn everything to the ground. Politicians see that pain and have gotten good at repeating angry words back to people who are suffering. Who they’re actually helping is another story.
The pie will keep growing. The question for this election, and for the decade after, is who gets a slice.
You can tune in to our full conversation above.
Now I’d like to put Jeremy’s question to you. What’s the state of your economy? Is your slice getting bigger or smaller? Let me know in the comments.
I am a retired physician and my wife is an almost retired psychotherapist. Our pie is big enough for retirement with no change in our lifestyle and the pieces that we use are hardly making a dent in the principle. We also get more than we need from social security. I believe that those workers that we rely on are barely making it and have no way to save. I would propose means testing for social security and Medicare with even greater fees for those who can afford it and a way to pay more to those who have contributed less and less to those who have paid more with virtually no cap.
I’m a retiree, and I consider myself very fortunate. My pension is plenty enough, and with few expenses I am saving money which I don’t need to do. So my piece of the pie is tasty. I am tipping folks much more than ever, just trying to spread a little joy. But, charities have suffered as a result.