The 30-Year Collapse of American Economic Optimism

More

The three decade decline of economic optimism in American families has perhaps never been clearer than in this graph.

The University of Michigan's Survey of Consumers asks participants by what percent do they expect the family's income to increase during the next 12 months. Over the last 30 years, optimism has plummeted:

01infpri-2.gif

This is a depressing picture, and it carries an important lesson for lawmakers. If workers don't expect wages to rise, and employers aren't paying workers more money, then there is very little indication that we're entering what economists call a price-wage spiral. That's where workers demand higher wages, which raise the cost of production, which requires higher prices, which feeds back into higher wages. Instead, we're seeing a U.S. economy with very little froth getting pelted with higher gas prices, thanks to rising demand and endangered supply in the Middle East.

Read the full story at Cleveland Fed.

Jump to comments
Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

Get Today's Top Stories in Your Inbox (preview)

Sad Desk Lunch: Is This How You Want to Die?

How to avoid working through lunch, and diseases related to social isolation.


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

Where Time Comes From

The clocks that coordinate your cellphone, GPS, and more

Video

Computer Vision Syndrome and You

Save your eyes. Take breaks.

Video

What Happens in 60 Seconds

Quantifying human activity around the world

Writers

Up
Down

More in Business

Just In