Recovering from The Great Recession

Photo Credit: Fred Wasmer
Photo Credit: Fred Wasmer

In the New York Times, they have a story with the headline, “A Rebounding Economy Remains Fragile for Many.” In that story, it’s about some counties in the U.S. where people are still barely scraping by. One part of the country is Wright, Wyoming. As of the 2010 census, the population was 1,852 — so not really a sprawling metropolis. Wright is also the location of Arch Coal that probably employed a lot of the residents. If you follow the energy markets (or if you just gauge how much energy costs from your utility bill and filling up your vehicle) you know that the price of oil has dropped considerably — which means you’re paying less at the pump than you were 3-5 years ago.  More oil producers (both domestic and foreign) selling their oil on the open market leads to a glut in supply. When you oversupply the market with goods, it drives the price down, so you get a graph like this from Gas Buddy showing the trend for the last three years:Gas Buddy 2013 to 2016

With coal, a similar market flood is happening:

coal-stats-by-country

If you live in Wright, and you got laid off from your coal production job, you’d be looking for someone to blame.  You don’t bite the hand that feeds you, you don’t look at world market trend in production, but do look at the government who has an administration that has a green energy plan with goals to decrease the amount of carbon going into the atmosphere. Since coal produces a lot of carbon when burnt, you don’t need many more clues to know where this is going.  Now, if you’re a resident of Wright and voted in the presidential election in 2012, the chances you voted for Mitt Romney were quite high. Numbers from the Wyoming Secretary of State show that Romney got 14,953 votes to Obama’s 2,163 (this is for Campbell county where Wright is located. You can see the breakdown HERE).  Guess which industry gives a lot of money to Republican candidates — and which employer in Wright also gave a good amount to Republicans?

coal-money

So okay, Wright is a coal town. They’ve got a big voice in the government — bought and paid for through campaign dollars. The residents of Wright elect mostly Republicans to represent them, and their representatives bring their concerns the centers of power and act in their interests. The coal industry has been a powerful player in Washington D.C. for…well, since the Industrial Revolution, so industry leaders are used to driving energy policy, securing deliveries of resources, and being in partnership with the government to supply energy to residents not only in the country, but the world. However, Coal is not the only energy supply in the U.S. Natural gas is also a resource that’s been fracked out of the ground and used by power plants. So, when the government responds to the realities of climate change and health issues that come in large part by the burning of coal, it’s understandable that residents of Wright wouldn’t be supporters of environmental policies that affect their livelihood in a negative way.  At that point, you start to look at the world in zero sum terms — and enemies to blame.

A key ‘graph in the New York Times piece is this:

Mark Perkins, 49, who shut down his electrical storefront in the coal town of Wright earlier this year as he lost once-plentiful jobs servicing mines and large generators.

Mr. Perkins said miners and their families had been streaming away from town as the unemployment rate in surrounding Campbell County soared to 7.5 percent in July, from 3.8 percent a year earlier. Families dropped keys on counters and bolted, Mr. Perkins said, leaving quiet streets and a deep resentment at the economic policies supported by President Obama and Mrs. Clinton.

“I’m just doing small electrical jobs to dog-paddle my way through till Mr. Trump gets elected,” he said. “You’re not going to see very many Hillary — or Killary as we call her here — fans. She was so vocal about putting us out of work and putting us down. We’re the scum of the earth.”

“We ain’t feeling too much of all that economic growth that I heard was going on, patting themselves on the back,” said Ralph Kingan, the mayor of Wright, Wyo. “It ain’t out in the West.”

Meanwhile, out on the west coast…

The East Bay Times has a story about how the tech boom has meant more and more tech buses are driving on Bay Area freeways.  The reason is simple:  it’s really expensive to live in the Bay Area (and Silicon Valley in particular), so workers live farther and farther away from the South Bay — but they still need to get to work.

Photo Credit: Karl Mondon/Bay Area News Group
Photo Credit: Karl Mondon/Bay Area News Group

Now, if you’ve ever traveled on Bay Area freeways during the morning or afternoon commute, you know that your drive times are extremely long. It’s a sign of a booming economy that the volume of vehicle traffic also increases — which maxes out the capacity of the roadways to handle the crush of cars and keep them moving at or near the speed limit. So, tech companies hire private buses and shuttles to ferry workers to and from Silicon Valley.  About 34,000 people a day take these buses to work.  430,000 take BART to work, CalTrain (which serves part of the South Bay) has 62,416 riders a day. 78.1 of all Californians drive alone to work. You add that all up, and that’s a lot of people in transit each day from home to work. Gasoline, diesel, and electricity are consumed at a high rate in the Bay Area to power the modes of transportation that get people from here to there…and back again. Oh, and because of our air pollution control laws, we here in the Golden State pay more per gallon for gas because of our reformulated gas.

Now, the Bay Area votes mostly for Democrats (liberal and moderate), and any Republicans who are in office have far more in common with their Democratic colleagues than, say, Republicans from Wyoming. The Bay Area, L.A., and San Diego are economically diverse areas and there are many ways to make a living in California — but not all pay a fat tech salary. There are a lot of people here who have to string together part-time jobs to pay the rent. These people have college educations, they have skill and experience, and they are desperate for full-time work. But because the nature of many companies is to keep their workforce lean, the number of good paying jobs available are few. So that’s why so many people work in the service industry in the Bay Area — and make very little money in relation to the cost of living (average yearly salary is about $35,000).

And because people are working so much, they worry that if they stop, they’ll be fired from their job. This was a conclusion reached by a study by a coalition called Project: Time Off.  Now, it’s no secret  that employers sometimes rule their employees with the iron fist of fear. And since the Great Recession, people are fearful they will lose a job if they make the smallest request that takes them away from work.  This climate of fear has created a phenomenon of the “Work Martyr.” Who are most likely to be work martyrs?  Millennials and women. These two group are those who forgo vacation and personal time off to work longer hours. While the work martyr thinks their unyielding dedication to the job will mean their boss will spare them from layoffs, the reality is that never taking time off from work results more stress and burnout.  Indeed, the work martyr tends to job hop ever two years because they can’t take the stress they’ve created for themselves.  But they don’t realize that they are just going from job to job and replicating the conditions that lead to continued stress and feeling burnt out…and more job hopping.

vacay_in_america-infographic

These are snapshots of what the economy is looking like post-Great Recession. People feel anxious and worried about the future. But even with the news that incomes are up for most workers, people still think the bottom is going to fall out at any moment. So we work harder, we sacrifice time in long commutes, we blame the government for job losses, and we want something to change. People seem to be done with the incrementalism of the left and the right.

They want “good jobs.”

They want the Trans Pacific Partnership to die.

They want Mexicans to go home.

They want tuition-free college.

They want anyone who is Muslim to disappear.

They want massive investments into green energy to reverse climate change.

They want everyone to stand for the national anthem.

They want Wall Street to pay for their crimes.

They want the economic security their parent’s generation had.

They want single-payer health insurance.

The list can go on, but it’s safe to say that what we are seeing is a real desire for our government and economic system to be radically different. Whether it’s a Northern European style of democratic socialism, or an America First type of fascism, those who have been hit hardest (and these are mostly middle class people who have experienced downward mobility in the post-recession climate) want more extreme change. That’s why Bernie Sanders did well among mostly younger whites with college degrees, and that’s why Donald Trump resonates with mostly older white people with high school degrees. In both cases, we have a segment of the white population who now blames “the system” for their plight.

This is a bit of a reversal for at least one group:  high school educated whites. In the past, when anti-poverty programs were derisively known as “Welfare,” it was easy to point at those who were poor (often with dark-colored skin) as lazy. Their problem, the critique went, was that they just didn’t work hard enough to get ahead. Blaming “the system” as being rigged to favor whites in jobs, education, and housing was a lame excuse. Individual moral failings, attitude problems, a breakdown of the family structure, and a government that doled out goodies to keep the undeserving poor fat and happy were the real problems (think of Mitt Romney’s 47% speech).

The “system” wasn’t rigged, many reasoned, because it was working for them — and they worked hard to achieve their level of status and wealth. None of this is to suggest that people don’t work hard for what they have (just see the articles linked to above). People do work hard. They do struggle. They do sacrifice. They do try to get ahead through grit, determination, and long hours. But when an invisible hand removes certain barriers to entering the workforce, schools, or even housing, for some and not others it’s easy to see success as something that only comes through hard work — especially when that invisible hand is working for you. The fact that Donald Trump is using language those on the left used to show how power structures could oppress some and advance others is a novel twist in presidential elections. The use of the phrase “the system is rigged” was used by Bernie Sanders, but now Trump is using it to say to his core supporters, “It’s not your fault that you’ve fallen on hard times.” He’s trying to soothe the stress they feel about sliding into poverty by focusing their anger at structures that have oppressed or offended them. So, that’s why you get such anger toward Latinos, Muslims, women, political correctness, immigrants, Colin Kaepernick, Obama, Hillary, and the federal government. They represent structures in “the system” that’s fundamentally rigged against Trump’s supporters.

There are no easy answers to all of this, because we live in a complex world. Anyone who says “It’s very simple to fix these problems” is just a shit salesman with samples. But one thing is clear: in an era when people crave radical change, what they really want is a new steady state where they feel secure in their place in the world. And in this political climate, we seem to be approaching a 10 on the Snap-o-Meter.