Good News: Economy Sucks, You’re Screwed, and It’s All Your Fault, Economists Say

Good news everyone: wage increases are slowing, raises are getting smaller, layoffs are beginning to happen, and inflation is all your fault. And you should be grateful about all of this, according to a series of recent headlines from the economic and political press.

"Millennials are to blame for sky-high inflation," a CNBC tweet recently read. Politico ran an article titled "Pay raises are getting smaller. That could be a good thing for workers." The premise was quite simple: inflation was being driven by wage growth, inflation is hurting workers, slowing down wage growth will help workers eventually. Politico later changed the headline to “There's one hopeful sign for the Fed on inflation. Really” after backlash but the core thesis remained the same. 

As debates over who or what is to blame for inflation and the looming threat of a recession, commentators have begun to focus on millennials again and the way they should (and shouldn’t act) in the current moment.

In the CNBC article, Smead Capital Management's chief investment officer, Bill Smead suggested millennials were to blame for inflation for spending years saving money instead of buying homes and cars.

“So we have in the United States a whole lot of people, (aged) 27 to 42, who postponed homebuying, car buying, for about seven years later than most generations," Smead told CNBC. “But in the past two years they’ve all entered the party together, and this is just the beginning of a 10-to-12-year time period where there’s about 50 percent more people that are wanting these things than there were in the prior group.”

This picture doesn’t exactly square with reality, however. In June, a CNBC survey of wealthy millennials (millionaires) found that nearly half were deterred from buying a car, a car, or taking a vacation because of inflation and interest rate hikes. An earlier survey in February painted a darker picture where nearly half of millennials said their savings had decreased during the pandemic and a third said their savings were less than their credit card debt.

Gains from the pandemic were largely limited to wealthy boomers and corporations, in fact. It is, after all, the wealthiest 10 percent of Americans who own 90 percent of stock and saw the pandemic rally transfer more wealth upwards into their pockets. Corporations in highly concentrated industries have been able to hijack prices and curtail wages while shifting blame to consumers and workers squeezed for fatter profit margins.

As Brian Sozzi, editor-at-large and anchor at Yahoo Finance said on Sunday, “ultimately, debating who deserves the most blame for inflation—Boomers or millennials—is a complete waste of time.” Millennials are burdened by historic debt and weren’t in any position to benefit from the stock and housing runup during the worst parts of the COVID-19 pandemic, boomers have created an economic order loudly groaning as it threatens to topple, but both are getting shafted by an ongoing supply crisis and corporate concentration driving inflationary prices.

As economics writer Matt Stoller showed in December about 60 percent of inflation then was driven by corporate profits and price-hikes. In late June, Stoller pointed out that every part of the theory that workers making marginally more money is driving inflation is wrong: there was little evidence wage growth was driving inflation considering wages were growing slower than inflation; a mountain of evidence that corporate concentration was driving inflation if we simply looked at who had the market power to hike prices and why; in other words, the Fed’s only tool to curtail inflation in the orthodox framework for understanding inflation—raising interest rates to increase the cost of borrowing, spur some layoffs, reduce consumer demand, and slow down inflation—wouldn’t work because the drivers of inflation were not workers but corporations.

Even beyond inflation discourse, the idea that workers should make themselves amenable to corporations and the chance they offer to ward off starvation is a relatively common one. Another area it appears is in discourse over remote work and who should be forced to come into the office. 

Ed Zitron, writer of the Where’s Your Ed At newsletter and chief executive of tech PR firm EZPR, has spent the pandemic elucidating at length how remote work is here to stay, how it reveals fundamental weaknesses in work system, why it strikes fear in the hearts of managers, its limitations, and how it still offers a chance to sustain communities and mentorship networks outside of a physical workplace. In June, Bloomberg ran an analysis of survey data that dismissed the early pandemic narrative about remote work as "a grind for younger workers stuck in cramped apartments and bliss for their seniors living it up in airy homes." In reality, the vast majority of office workers enjoyed working from home and were more likely to leave a job that didn’t offer a hybrid work option the younger they were.

That hasn’t really stopped arguments from emerging that amount to millennials agreeing with managers and hating remote work or acknowledging how it's set them back. The reasons more or less rhyme with those managers articulate. Young workers need to come into the office to advance their careers through networking or in-person learning, or to feel connected to their company and colleagues, or to properly work and produce for the company. 

"Remote work lays bare many brutal inefficiencies and problems that executives don’t want to deal with because they reflect poorly on leaders and those they’ve hired,” Zitron laid out in one of his earlier mentioned pieces. “Remote work empowers those who produce and disempowers those who have succeeded by being excellent diplomats and poor workers, along with those who have succeeded by always finding someone to blame for their failures."

The push against remote work may happen independently of inflation discourse but is still related to it. This is a country deeply hostile to labor, specifically to workers and anything that may bring them more autonomy or comfort in their lives. Unions, wage increases, regulatory protections, remote work, it’s all viewed as an unbearable cost that can hardly ever be justified—and the first to go when something somewhere else goes wrong.