B (2:52)

Do you think that either party can claim the mantle of the party of working people today?

A (2:58)

No, I think this is one of the big jump balls of American politics right now. Both parties clearly aspire to that. And I think it's one of the fault lines of American politics where both parties are jockeying to claim that mantle, but neither one has really successfully claimed it. And you see that, I think, backed up pretty clearly in the survey evidence, where workers themselves and voters in general are pretty split on which party is better for American workers and their interests.

B (3:25)

Why are we in, I guess, a moment right now where it seems like such a jump ball?

A (3:30)

Well, first, I think there's certainly a realignment happening in the Republican Party where they are not taking for granted that the party of workers belongs to Democrats. Right. And you have in recent years, and this is, this coincides with the rise of Trump, where not just the president but many others in the Republican Party are much more bullish on their ability to put together a diverse working class governing coalition of voters that can keep them electorally competitive for the foreseeable future. And so you have folks like Josh Hawley after some of the recent elections saying the Republican Party is the multiracial working class party in American politics today. I think just the fact that both parties want to compete and are so explicitly competitive on that battleground itself is why. The first reason why it's a jump ball, the second reason is because you have these dramatically competing narratives for what's going on with American workers. What are the challenges that they're facing and what kinds of solutions are necessary to solve those challenges. And so we're seeing one of those theses playing out right now with the Trump administration, which really foundationally rests on the idea that the free trade era, the neoliberal era, if you will, has been a disaster for American workers. Workers, that is their foundational claim. And everything else rests on that claim being true. And if you reason from there, then you quickly get to tariffs and protectionism and a more restrictionist immigration policy. So we're seeing their version of the case playing out in real time.

B (5:04)

What's happening on the left? Because from what I can tell, neoliberalism has lost purchase there as well.

A (5:13)

I think what's happening on the left is not quite coherent. Right. You have folks like Mamdani in New York who are coming to power or rising to prominence, at least on an explicitly socialist type of agenda. You have Bernie Sanders, who's put together one of the most successful movements in Democratic politics in many generations, again coming from a more socialist frame and certainly a very skeptical anti capitalist frame. But then you have this very popular center left movement driven by people like Ezra Klein in the abundance movement that is much more of a supply side type of liberalism that says, yes, we need state capacity and yes, we need regulation, but we also need to be a country that builds and we need to be much more friendly to building and doing things ambitiously in this country. So you have a lot of different strains of the Democratic Party right now competing for who's going to lead that party in the future and what kind of policy solutions are going to define the next era of Democratic governance. But I, I don't think there's a single unifying voice right now on the left.

B (6:14)

Yeah, I would totally agree. And part of the next three and a half years of Democratic politics is going to perhaps determine who wins that debate and maybe it will still be undecided and the party will continue to fight it out once they get into power. Next, on the Republican side, it's clear whose voice it is. It's Trump's voice. But the message, you said the left is incoherent. I'm curious if, if the right is coherent. In contrast, right. The mess is party of working people, trade protectionism, decreased immigration. But then we also get, for example, you know, standard fare tax cuts in what has been the sort of marquee legislation of Trump 2.0 so far, which in many ways mirrors Trump 1.0.

A (7:01)

I totally agree. I, I think both parties are somewhat incoherent. The difference is Democrats are now reacting to a Republican Party dominated by Trump that is explicitly making a play for the party of workers, right, even making a play for organized labor in a way that has never been true in the modern era. But Republicans are actually governing and they have total control of government. And as you said, there is this mix of different ideological strains that are still trying to work their way through to a coherent agenda. I would say unsuccessfully. It's not even that the party's not coherent, it's that it's often working across purposes with its own goals. And so you have, as you noted, a Republican agenda that has included a major tax cuts bill that could have in many ways passed under any Republican administration. But you also have a trade protectionism that is unlike anything we've seen in the modern Republican Party, really unlike anything we've seen in modern American politics. You see a restrictionism on immigration, you see a skepticism towards free markets as well. That's just kind of at a fundamental level, a departure from what we've seen in the modern party. And all those things are vying for each other, vying for supremacy right now with only Trump, I think, able to hold all those different strains together. But what's also interesting is you see in our survey that there's a pretty big delta between the Trump economic agenda and what workers, including Republican workers themselves, say they want, say they're concerned about, say they want to see policymakers prioritize. So that's also intention here is that you don't have a clean alignment between the party's own workers and the party's agenda.

B (8:41)

I want to get into a key argument that you make in your reports on American workers, which is that the most common narrative about what it's like to be a worker today is wrong. And so I think in this portion we'll try to define the problem and then we'll get back to what Americans think about it and how politicians are trying to serve them. So why is today's narrative of what it's like to be a worker wrong?

A (9:07)

Well, there's just a lot of recency bias in the way that that narrative has been constructed. So people assume, and you hear all the time, I think, plugged in the media, that people are working more jobs to get by than they did in the past, that there's more job hopping and more career changing than there was in the past, that workers are somehow more overworked and less satisfied than they were in the past, that they feel less job security than they did in the past. All of these vibes about the American worker and about the American labor market are wrong. And in each one of those cases, you can just point to these long running trends moving in exactly the opposite direction of the narrative. And so in general, what's true is that workers are highly satisfied that they work fewer second jobs or gig jobs than they did in the past. They have relatively less job hopping and career changing than they did in the past. They're also unfortunately, much less entrepreneurial than they were in the past. We start new businesses at a lower rate today than we have in previous eras. And so just across the board, workers are actually doing pretty well and in pure economic terms are doing better than they've ever done. And they say that they're pretty satisfied, like at very high rates, very consistently. This is one of the overwhelming takeaways that if you look at any long running Gallup or Pew long running survey data about workers, what really comes through is the resilience of American workers. They tend to be highly satisfied with their job prospects, with their current career and with their job security. And so a lot of the disaster kind of motif of, especially when you look at the right, that the free trade era and all it has brought the American economy has been a disaster for American workers and has hollowed out the American worker and made them more precarious. Not only does it not track with the economic reality, it actually conflicts with what workers themselves are saying, which I think is really interesting.

B (11:06)

There's a lot of data to get into here, both in terms of how workers report their satisfaction and in terms of the raw numbers on the ground. But I think people are going to be pretty surprised to hear you say what you just said about workers economic prospects, because a lot of people have probably seen the chart that looks something like, you know, over the past 50 years, American hourly average wages have stagnated somewhere around $22 in today's dollars. And on top of that, that as American productivity has continued to grow, wages have not tracked with productivity. I mean, one of the supposed promises of the capitalist project is that as workers are more productive and technology advances, workers will also reap the benefits of more output and more prosperity for the companies. And that relationship has been disrupted. And that related to that and related to other things, wages have stagnated for 50 years. You say that that's actually not true.

A (12:05)

Yeah, the wages stagnating for 50 years thing is really a foundational claim again of folks on the populist right and the populist left. It's something that unites the kind of Oren Cass American compass right with the Bernie Sanders left. And in both cases it's premised on a flawed way of measuring for cost of living. So when you properly measure that, meaning measure it by either of the two or three ways that economists find the most credible to measure wage growth over time, you find not a 50 year stagnation, but a very substantial period of economic growth over the last 30 years. What's true is that from roughly the early 1970s to the early 1990s, there was a period of prolonged wage stagnation and it was really bad. And for male workers, it wasn't just stagnation, it was real wage decline, meaning once you adjust for the cost of living, wages had gone down. That was terrible. It ended right as the free trade era began. So if you track back to 1994, when NAFTA is enacted, that wage stagnation era is over and the start of the return to growth era has begun. So that's a big. That's one of the things we try to draw out in the report, is that the last 30 years have been substantial progress, even though they've been uneven because you've had the Great Recession, you've had other kind of setbacks that have at times interrupted that wage growth. But zooming all the way out, wages are way higher today than they were in the early 1990s. So that's the first point. But the second point that you're making about the disconnect between productivity growth and wage growth, that part's true. So two things are true at the same time. Workers are doing better than ever, economically speaking. They're not doing as well as they could or should be doing. And so we try to make a big point in our report. We do not believe we should be satisfied with the status quo. We just don't think we should rest all of our premises for policymaking and other assumptions on a flawed reading of the wage data, which so many people do, unfortunately.

B (13:58)

Yeah, I mean, you can find this information published by very credible research centers like Pew Research or whatnot, and even like the American Enterprise Institute, which is certainly not anti free trade, will suggest that there's a live debate over how to read Consumer Price Index data and how to consider it in when you're judging how wages have done over the past 30 to 50 years. Why would you say that? Sort of the way that you calculate it, which suggests that wages have risen over the past 30 years, is the best. We kind of do a segment on this podcast called like good data, bad data or not data, with the premise that, you know, you can, you can put numbers to anything. You can find data that will suggest just about anything you want it to suggest, but that doesn't mean it's good data. Why is this the best read on wage data over the past 30 years? Because this is such an important point.

A (14:52)

Yeah, I appreciate the question. This is why we devoted a whole appendix on methodology to this very question. Because it is so important. And I'll just say the two response essays to our report were from Paul Krugman, obviously a Nobel laureate left leaning economist, and Michael Strain, who is a right leaning economist at the American Enterprise Institute. And they both agreed and strongly affirmed that central premise that wages have gone up, we could be doing better, and that both of those things are true at the same time. The simple answer Is that when you calculate change over time in something like wages, you have to pick which way you deflate the wages, meaning how do you factor in inflation? And the Census Bureau itself says not to use its own data the way it's been used to produce that 50 year stagnation chart. So the agency that produces the data, take it from them that this is the wrong way of looking at it and that the right way of looking at it, meaning the one that has the broadest consensus among top economists on the right and left and center, using the correct methodology, you get very significant wage growth. And that would be true again of epi, a left leaning think tank, and aei, a right leaning think tank.

B (16:01)

In your report, you focus on the median worker, which makes sense. You have to present this data in some ways. But perhaps one, one of the biggest issues that Americans have taken with economic performance of the past 30 or so years is that the economy has bifurcated into the haves and have nots. And so you could look at, you know, a report that just focuses on the median worker and say, well, this doesn't really reflect how much worse what it's like to be a worker has become over the past, say, 30 years because we're just looking at the median. And so if the argument is that we've become bifurcated, it wouldn't capture that sort of data. What do you say?

A (16:44)

Yeah, that's why you can break out wage trends. We look at the median because we're trying to approximate the typical worker. But no worker is the typical worker for any prolonged stretch of time. Workers will go up and down the wage scale. And so where a given worker falls in, the broader wage distribution is going to change based on where they are in their career and all kinds of other factors. But you can look at this based on deciles. You can say, how is the worker at the 10th decile, the 10th percentile, doing versus worker at the 90th percentile. So workers very close to the top and workers very close to the bottom. As it turns out, over the last 30 years, as you might expect, workers at the 90th percentile have done very well. But right behind them in terms of the rate of wage growth are workers at the 10th percentile. So it's actually really instructive to look at that percentile based, decile based wage graph because it shows that the median worker lags most other workers in the economy, that when you look at workers at the bottom and at the top, they're doing better than the median worker over time. So all that means is this is not just an isolated phenomenon. It's not just something that's happening at the top or in the middle. It's happening across the broader labor market again with stops and starts. During a recession, marginally attached low income workers, they're going to be hit way harder than high wage workers and they have less to fall back on. So this is not to say we have nothing to worry about, but it is to say that that wage growth that I'm talking about has been felt throughout the labor market, not just in one corner or another.

B (18:15)

Yeah, I was going to say in looking at those charts, it looks like most recently the workers who are worst off among us have done quite well. And so that 10th percentile worker who's made significant gains and comes in just behind the 90th percentile worker has experienced a lot of those gains in the post Covid era. But it doesn't seem like they have done particularly well compared to the rest of American workers or the rest of the economy in previous decades. And so we're maybe looking at this data at a moment where it's particularly bright for the worst paid workers.

A (18:50)

Absolutely true. But I think the point stands that it hasn't been stagnant at the bottom. We haven't seen wage declines at the bottom. We see different rates of growth over time. Absolutely. But when you consider again the last 30 years, you're seeing really strong broad based growth. But the challenge and the headwind, and I think this is becoming even more true now as we look at the most recent data, is that the runaway cost of living and inflation have really eaten into the gains that workers would have otherwise had. And so while in general that are above water, wages are keeping pace and outpacing inflation. Overall inflation is a real pain point in the economy. It's a real pain point for workers. And again, as you ask them what is the thing you're most upset about, that's the thing on the top of their mind. So again, the question for policymakers is what do we do with this wage data? What should it tell us about the economy? I think the answer is we shouldn't base our ideology here on 50 years of stagnation. That's just not credible. But we also shouldn't base it on everything's hunky dory and there's no problem to solve here. There's a lot more we could be doing to unlock that potential for American workers.

B (19:56)

Hey there listeners, Sometimes you get so carried away with a conversation that you forget to actually cite the data that you've been discussing for the past 10 minutes. This is one of those instances. So this is future me chiming in to let you know what the report from the Economic Innovation Group actually said. Here's the data. From 1980 to 2023, hourly wages for the median worker grew by 36% after accounting for inflation. Now, that sounds pretty good, but the rate of growth has declined compared with the 30 years before that. So average hourly wage growth from 1950 to 1979 was 57%. For an annualized rate of 1.6% each year, wages grew on average by 1.6%. That dwarfs the 1980 to 2023 period during which average hourly wages grew by an annualized rate of just 0.7%, again, for a total of 36% over those years. So wages are still growing, but not as quickly as they were before. Okay, let's get back to the conversation. And I will just say here so I don't have to interrupt us later on. If you're enjoying listening to this conversation, go become a paid subscriber to the GD Politics podcast at gdpolitics. Com. Paid subscribers get about twice the number of episodes. They can join in the paid subscriber chat, all that great stuff. But most importantly, paid subscribers make conversations like this possible. So go to gdpolitics. Com. Okay, let's get back to the conversation that we were having now that we have the data to back it up. Here we go. Yeah, I was about to say on one hand, this is, you know, a positive report. You might have thought that American workers were getting the real, like, under the stick, but it's not so bad. However, it seems like at the very least, people are not satisfied with the way things are. And you hear all the time, like when you ask Americans what's the most important issue facing the country, it'll oftentimes it's economic. It's currently prices of things. But you know, how did we get to this place where the narrative is so strong about American workers doing poorly? If you're saying that actually it's not so bad.

A (22:10)

I mean, this is a thing where I think no one's ever gone out of business in politics. Avoiding grievance, right? Grievance sells very well on the campaign trail. And it allows you to create a boogeyman and say, well, if it was just not for NAFTA or some free trade agreement or immigrants or whatever, you would have your job back or this factory wouldn't have shut down. And sometimes there's A kernel of truth in that. But most times it's at the very least a large exaggeration of reality and often a direct contradiction of reality. And so I think part of the reason that we think things are going badly for workers or that that's become a popular narrative is because anything that is going wrong. Look, we have a huge labor market. I said earlier, there's 160 million workers in this country. At any given time, a good chunk of human beings are doing badly. They are facing challenges, you know, that could be based on what industry they work in, what region of the country they work in. So it's not that everybody's doing well at the same time. And free trade, for example, had very localized costs to certain types of workers in certain types of industries. I think the mistake was that that got extrapolated out into a general claim about workers throughout the economy or even throughout manufacturing, when that just wasn't backed up by reality. So I think that's part of it. And then part of it is bad news always sells better. And so whether it's AI or whatever the new technological fad is, there's always a market for this is going to be a disaster, and this is going to make workers lives more precarious. And those stories tend to get to the front of the fold where the good news stories were. There's no bad news to be found here. Those stories don't sell quite as well. So I think those are both factors. The other interesting thing you see in the data is that workers, when you ask them about themselves, pretty consistently they say, I'm doing well. When you ask them about workers in general, they say much more pessimistic things. So people have been convinced, become convinced that whatever they're experiencing, their financial security, their job security, their job satisfaction, that it's better than what's happening out there. And that's an interesting phenomenon where you have this divide between how workers see themselves and how they see the broader labor market. And I don't really have a great explanation as to why.

B (24:20)

I mean, it's incredibly common phenomenon, I guess, in the sense that Americans feel the same way about crime. They say that their communities are largely safe, but a lot of American communities are not. You see it about the economy more broadly. Not just sort of my experience as a worker, but my personal finances are good, but the economy of the country is not doing well. And so it could be this doom and gloom cycle of politics or media that we discuss. It could just be a bias towards personal optimism. I mean, we see in reports all the time that some of the poorest people on the planet are some of the happiest people on the planet. I mean, that doesn't mean that they've sort of been given a fair lot in life or whatever, but they may still report happiness. So I guess I do. And in particular because those numbers from Gallup about worker satisfaction are so high and so stable, it makes me wonder how useful in some ways that data even is because it spans decades of extremely different economic circumstances in America. But kind of nonetheless, no matter what happens, Americans are pretty optimistic about their state as workers.

A (25:30)

I agree, and I have the same question. But what's important is that it's not just Gallup. The three longest running, most credible surveys of American worker satisfaction all find the same thing. And so listen, I think about this a lot these days. The resilience of the American economy is unbelievable. It's really a wonder that our economy can take on a lot of damage, a lot of policy thrash, a lot of economic shocks and has been so resilient. We saw this with COVID How did the US economy rebound from COVID compared to other advanced nations? We did better. And a lot of that I think traces back to the resilience of American workers themselves. So it's hard to quantify. But there is something at its root that is just true about American workers, which is they tend to be pretty resilient and pretty optimistic about themselves. I think what we're seeing today in politics generally is more of this thermostatic negativity to whatever the other side is doing. I think that definitely shows up in the polling data pretty consistently, including with workers. But I really the most credible thing we can ask them is how are you doing? Right. Anything beyond how are you doing? Is a speculation. When they start to speculate, they get more negative. But it's how are you doing? That really matters. And again, that's pretty positive on balance.

B (26:42)

There is some data that makes me think maybe there's more credibility to the dourness around the American worker and American's economic lot, which is the percentage of folks income that is spent on housing and childcare, for example. I mean, if you look at the 1980s, Americans are spending about 20% of their income on housing. Today it's more like 30%. If you look at childcare in the 1980s, it's like 6 to 8%. Whereas today it's more like, you know, 15% or more. I mean, it just varies wildly depending on where people live. And those are such personal Things, you know, your home and your family, and the sort of maybe confidence in being able to afford to provide those things are so personal as well, that maybe that hits particularly hard. And so I guess that's a different way to measure how American workers are doing.

A (27:38)

And it happens to coincide with the thing that they are telling us they're most upset about. Costs. You know, the affordability question is it trumps everything else by a mile when you ask them what's your top concern and, and what do you want policymakers to focus on? So again, these two things can be true at the same time by, by the measures we have, workplace safety, job satisfaction, et cetera, et cetera, the trend lines are moving in a very positive direction for workers over time. But if you look right now and really going back to, you know, in the middle of the COVID period, the thing that has been top of mind for workers in terms of frustration and anxiety has been the cost of everything is too high. Cost of everything is too high. Housing is a huge flashpoint, which is why I think you had all four presidential and vice presidential candidates in 2024 talking about housing for the first time in my adult lifetime, at least that was a top tier issue in American politics. Well, that's for good reason, because at least in our Survey we found 9 out of 10 workers agreed, only 3% disagreed, that the cost of housing had gone too high. And the vast majority of those wanted a much more robust federal government role in what has traditionally been a local policy issue, housing regulation. And so that's a real pain point and something that again, as I said, has eroded the kind of progress that workers would have otherwise experienced because the cost of things, from everyday goods to major purchases like homes and autos, has been skyrocketing in recent years. That's a clear area where policy can help.

B (29:08)

And when it comes to workers perceptions of the two parties on those issues, you asked, you know, how do you view Republicans and Democrats on things like cost of living, taxes, trade, immigration, the interests of American workers? Who do Americans trust to solve those problems?

A (29:27)

Yeah, it's a mixed bag. What stood out to me is that neither party has a commanding lead in any of those areas? Right. It's a really split workforce when it comes to who's best on any given hot button issue that you may look at. And it's flipped just a little bit from when we asked some of these same questions last year. But given that this is the signature priority. Right. For American workers, I think the most important way we can assess or should assess the President's job performance so far is is on the question of affordability and inflation. Right. And when we ask that question, Trump gets the worst marks of any area of the presidency we asked about on inflation and cost of living. So to me, if I'm in the White House, that's what's setting off every alarm bell for me. This is the issue that we're upset about in 2022, 2023, 2024. Here we are in 2025. The one lesson that should have been learned from the Biden presidency is that if everything else in the economy is going well, but inflation is too high, that's how workers are going to judge, how voters are going to judge the economy as a whole. Doesn't matter if the job market's strong, doesn't matter if GDP growth is strong, none of that matters. If inflation is too high, that's the measuring stick for where the economy is doing well or not. And I think that very much costs Democrats the election. Trump has come in with a promise and a mandate to lower prices to bring cost of living down. And workers are giving him the lowest marks of any issue we surveyed on that question. To me, that is a five alarm fire for the White House and really the only thing that matters, because he could be doing better and the Republican Party could be doing better on immigration, on crime, on all these other things. But if past his prologue, if he's failing on inflation, that's going to be what determines his governing success and the Republican Party's electoral success in the midterms and beyond.

B (31:18)

Yeah, this is a place where there seems to be conflicting perceptions amongst the public, because it seems, according to your polling data, that Americans are more inclined to trust the Republican Party on things like trade and immigration. And going into Trump's second term, Americans were actually pretty positive on tariffs. It got complicated quickly when you asked, you know, like, well, how much more would you be willing to spend on a pair of blue jeans in order to levy tariffs or whatnot? But it seems like at least the message is somewhat popular or has been somewhat popular. Crackdown on immigration, levy more trade barriers that protect American manufacturing or onshore, things like that. But then they don't seem very happy about how it's all played out in real time. Maybe the Trump administration will argue like, well, this is a multi year project and it's just going to take some time. But this is ultimately like a political question too, because how long Republicans have to try to implement these things is determined by the voters. How do you make sense of that conflict that we see in the polling data about what Americans say they want on policy, but then how, how happy they actually are when it gets implemented.

A (32:32)

It's a great question. And on immigration that, you know, the issues that we surveyed, that's the one where Republicans have the biggest lead. They have a more than 10 point spread over Democrats, but even still, it's only 41% to 30% in favor of Republicans. It's not like either party is running away with these things. And that's as wide as the spread got when we ask about trade, it's half that spread, 36 to 31 in favor of Republicans. I think part of how we address the disconnect is not just how voters feel about a specific issue when you ask about them, but what is the intensity of feeling about that issue relative to other issues. And the intensity of feeling about immigration was very high in 2024, but the intensity of feeling about inflation and cost of living was higher and is higher today. So we tried to get at that tension by asking, if you could just pick one issue for policymakers to prioritize to make life better for workers, what would it be? And if you combine cost of everyday goods and cost of housing, cost of living is far and away the top response. The least popular answer is tariffs. Right. So here's the President's signature policy agenda on behalf of, of workers, trade protectionism. And it ranks not just the lowest among all workers, but also the lowest among workers who supported Trump. And so I think that's the key thing here is what do they actually want you to do? They may say in the abstract, yes, I want more border crackdown. I think that's true, and that's why they give the Republicans the edge on this. But if you're trying to help me as a worker, what's the thing I feel most threatened by? There's just no question that that's a cost of living issue. And in fact, when we looked at the opposite, which is the issue you least want policymakers to prioritize, tariffs win that one as well. Where they're far and away the least popular. They're the issue that the most workers want policymakers to avoid. Interestingly, for Republicans, this gets back to our earlier thing about the realignment within the party. The second least popular issue was tariffs. The first least popular was helping workers join a trade union. Right. So, or labor union, rather. So unions and tariffs, kind of two hallmarks of the kind of old left's worker oriented ideology rank very poorly among Republican Workers. And so I think, again, there's that tension between, what is the party doing right now on behalf of workers? What do workers themselves actually say they want?

B (34:50)

Why are Republican workers so down on unions in particular?

A (34:54)

There's this interesting thing in the polling about unions in that if you ask people in the abstract, what do you think of unions, it's nominally positive, not overwhelmingly positive, but positive. If you then ask them, do you want to join a union? Tepid at best. People are not falling all over themselves. Unions only in the private sector. It's only about 6% of private sector workers are a union member. So the relevance of unions in the labor force has declined dramatically. And I think they still, from a branding perspective, have a nominally positive brand. But it's not something that workers feel like, I need to be a member of a union to get ahead. The polling just does not back that up. Not just one or two polls, but this is kind of the overwhelming, consistent result. And so I think it's one of those things where there's a difference between the abstract and the personal and practical.

B (35:41)

I want to try to synthesize all of this by asking this question. We'll see if we can get there. If you were to craft a platform and a message for a party trying to win over the American worker, what would it look like based on all of the research and data that you have?

A (35:58)

I would hammer affordability top to bottom right. I'm going to make your life more affordable. My economic policies are going to be designed top to bottom to reduce the pressure that working Americans and their families are feeling every time they go to the checkout counter, every time they purchase something big like a house or a vehicle. And importantly, if I were to do that, I know from the survey data now that I would not make trade or tariffs a centerpiece because workers simply do not believe that's going to make the situation better. Again, pretty damning for the White House. It's not just the tariffs are unpopular. It's that workers believe they will actively make their biggest concern a bigger concern. That is a really tough place to be when it's your signature policy item. So I would learn that lesson that the Biden administration failed to learn quickly enough, which is that unless cost of living is under control, unless you are perceived to be attuned to that concern, you are going to lose on every other economic issue. So that's how I would frame it.

B (36:56)

Okay, that's a message. What's the policy? I mean, how do you make in the span of three to Four years. Housing cheaper, childcare cheaper, goods cheaper. I mean, that's maybe an easy one. You say undo all the tariffs. If you know, yeah, you, you start.

A (37:10)

By not making it, you start by not making it worse. I think, I think that would be, that's a good start. And then on things like housing, there's a tremendous role for policy to play because housing is a supply driven issue. First and foremost, we have a massive housing shortage. The federal government has a lot of tools at its disposal, both carrots and sticks, to induce more housing supply, to make it easier to get permits, to make it easier to get the financing. And so a supply oriented housing agenda would meet workers exactly where they are on an issue that's very popular. Right. Like, again, the survey demonstrates, I think unambiguously, workers are pissed off about it and they want the federal government to play a role where it has not traditionally played a role. And so I think that is ground zero for Trump or any president to step in and say, I'm going to put real muscle behind this to drive that supply up and to meet workers where they are. About this principal concern, which home do.

B (38:07)

You think this policy proposal, this agenda is likelier to land in the Republican Party or the Democratic Party?

A (38:13)

It's a great question. So you have these two competing strands, right? You have the abundance or supply side, progressive left, right? That's become very in vogue. And then you have a Trump administration that's just recently said, we're going to declare a housing emergency and start tackling housing this fall. And so clearly they're aware that this is a pain point. Clearly they're aware that Americans want their government to do something about it, but so far, neither party has delivered. And so again, I think it's just like I said earlier, this pro worker mantle is a jump ball in American politics. I think the housing Party is a jump ball as well, because neither one has yet delivered on the promise to the American people. But we're all very curious to find out what the Trump administration actually does. What do they put behind that emergency? And will they actually use the full levers that they have at their disposal? Will they actually work with Congress? And so, really, interestingly, we're in such a divided time, but you have Elizabeth Warren and Tim Scott, a Republican from South Carolina, a Democrat from Massachusetts, working together on the Banking Committee just a few weeks ago to unanimously advance out of the committee the most ambitious federal housing bill in a generation. So if you can get Liz Warren and Tim Scott to work together on something like that, and get every member of the committee to vote it out positively. That's a huge signal both that there's a strong political incentive to be found doing something on housing and that there's real crossover potential for real legislating, not just executive orders or kind of speechifying from the administration. So again, if I'm advising the President, I, I would point him exactly in that direction and say this is something you can pick up and run with because to get that bill to the finish line is going to require presidential leadership.

B (39:57)

Yeah, I'm curious about the intra party politics of this because you mentioned how abundance is in vogue on the left, but it also has a lot of critics on the left. You know, the populist left will describe it as, you know, neoliberalism in sort of like new dressing. And that ascendant populist left that you see in somebody like Mamdani or Bernie Sanders or whatever is probably not going to champion neoliberal principles. And then on the right, it seems like populism is still the name of the game. And if anything, you see more think tanks arising trying to take on the mantle of national conservatism. Right. Trying to intellectualize a lot of these isolationist principles and, and presumably so that they'll become more enduring. So I guess the answer could be like this approach doesn't win on either side and we enter a new consensus of populism. Like we had a sort of consensus of neoliberalism in the 90s. If you had, I mean, if you had to guess, do you think, do you think that like the abundance movement or the old school Republicans are going to have more success within their respective parties?

A (41:12)

I think this is one of those cross partisan, cross ideological issues that has pulled a pretty broad range of stakeholders, organizations, politicians under the same umbrella. The Yimby movement, which precedes the abundance movement, but is deeply intertwined with it, is one of the most successful policy movements in modern history. Right. You've got this piece by piece, a significant amount of housing reform happening around the country thanks to this very grassroots type of movement for bring down the barriers locally for more housing supply. So I think we've already seen a lot of success in red states and blue states with all kinds of different political ideologies working together where they might disagree on 95% of the other playing field. Whether that's more broadly applicable beyond housing, I think is a really good question and not one that I have or anyone has any answer for right now. But I think on housing, because it is such a Pain point. And because it is so fundamentally a supply gap issue.

B (42:14)

Yeah. In fact, one of the pieces of data that really stuck out to me in your recent survey was you broke down workers by geography. And when you look at urban workers, the single most important issue, the top stressor, is the cost of housing. And that outranks the cost of products and services. Good paying, job saving for retirement, taxes, the cost of health care, you know, the cost of childcare, something else. So clearly, most especially in urban centers in America, the cost of housing has caught the attention of people. We're describing the problem as it is today. And if, you know, back to our theme of. Of doomsayers, if you cast forward a few years, I think a lot of people have anxiety about how AI will change all of this, who it will displace, if it will displace broad sectors of the American economy. This is also something that you've been looking at to get a sense of where we are today, where we might head next. And in doing so, you kind of ranked every category of American worker by their susceptibility to being displaced by artificial intelligence. I thought this was super interesting and did an assessment of how they're doing in the economy today. So, for example, the highest scoring folks on measurement of, you know, susceptibility to displacement were genetic counselors, financial examiners, actuaries, purchasing agents, and budget analysts, all people who basically deal with large quantities of data and are tasked with synthesizing it. The lowest scoring folks in terms of that displacement metric were dancers, fitness trainers, helpers, I. E. Painters, paper hangers, plasterers and stucco masons, reinforcing iron and rebar workers, and then pressers, textile, garment and related materials. So things that, you know. Yes, it's hard to, I guess, replace the prima ballerina of the, you know, New York City Ballet with AI at least for now.

A (44:21)

For now.

B (44:21)

What did you find about how those different groups of workers are doing in the American economy today?

A (44:29)

Yeah, it's a really interesting question because there is, again, like we were talking about earlier, so much hype about, and mostly negative coded hype about what AI is going to do or what it's already doing. So what my colleagues did is they looked at five different measures of AI exposure in the labor market. You just ran through some of the categories, but we looked at five different ways of measuring whether a job is exposed to AI or not. And the headline here is really simple. The most AI exposed jobs have the lowest unemployment rate in the labor market, meaning there is an invisible impact so far of AI Job disruption. That's not to say it won't materialize, but today we just don't see it. And so the takeaway there is that the hype is just that it's for right now hype. And there's a lot of unknowns. We're still very early in the life cycle of AI and how it's being integrated. Still a minority of workers say they use it for work. Barely half say they use it for their personal life. So we're still on the early end of this, but I think there's a bigger and really interesting debate to be had about whether that's a good thing or not, whether the lack of disruption is good. And so, like I would say, I think the biggest risk to workers is that AI is not going to be disruptive. Ooh. And that's the thing workers should be the most worried about is that this whole thing turns out to be a total bust and that it doesn't end up disrupting very much at all. And we don't get the upside of that disruption. Right. Every other major technological advancement we've had has ended up being a huge net positive for workers. Why? Because it led to productivity gains, that led to better economic growth, which led to improved standard of living and. Right. And so that's how we get to improve standard of living, which everybody wants, and better wages, which everybody wants. You have to go through the gate of productivity growth. Well, here's a technology that has the potential and in some ways the promise of being a huge boost to productivity to being a great compliment to or substitute for human labor, which should allow people to reallocate into better jobs and other use cases, including jobs that haven't even conceived of yet because they don't exist, and they won't exist unless AI is highly disruptive. And so that's a really important fault line in the debate. You have, again, going back to the Republican Party of today. You have people like Josh Hawley, a senator from Missouri, who's proposing a bill to outlaw driverless cars and driverless trucks, specifically to protect workers jobs. And so you have one strain of political thought right now that says this is a threat, that we should protect today's workers and today's jobs against. And then you have others who say, no, we have to welcome that because that's the way that we get to a much better and more abundant future. And we're going to see that debate play out, I think, in some really interesting ways in the years ahead. But today's evidence says there's Just not much disruption to speak of at all.

B (47:25)

A lot of that response was focused on the growth that artificial intelligence could bring and increasing productivity and the like. You heard somebody like Tucker Carlson recently say, you know, everyone's so obsessed with gdp. I went to, I'm paraphrasing what he said. You know, I went to Japan and it was a radicalizing experience. They haven't experienced real GDP growth in decades. But the quality of life there is, you know, fantastic. And everything works and everything is orderly and so on and so forth and. Right. People have probably heard stories of like, even today they still use fax machines to get work done in the financial sector in Tokyo or whatever. And so I think there is a group of people both on the right and on the left who say, okay, if all you're going to talk about is growth and productivity and all this stuff, like, you've lost me. Because the style of life, you know, the way that I want to live my life has, has sort of been lost or isn't attainable or whatever. And folks can point to Japan or they can point to the 1950s or they can point to, you know, an obscure Nordic country. I mean, they're not obscure. Everyone knows the Nordic countries, but they're small Nordic countries. How do you respond to that?

A (48:36)

I don't want to be snarky, but Tucker Carlson was also wowed by Russian supermarkets. So I'm not exactly sure we should be blown away by his observations about international economies. Look, I love Japan. There are things about Japan that I wish were more true of the United States. The safety of their large cities, their embrace of certain technology. But that's a techno driven economy if there ever was one. I mean, the Japanese are really open to technology and in many ways they have to be. They've got a much worse demographic situation in their country than we do, where it's a much more rapidly aging society. There are fewer workers for retirees. That's the future we're headed for, by the way, which is another reason to really bet on AI or hope that AI delivers on its promise. Because unless we do something and unless technology helps us escape that demographic decline, we are in a load of trouble in terms of our ability to sustain a prosperous and well functioning society. So I think there are certainly things to learn from countries like Japan. I would also say, just personally, I don't think the economy is everything. I don't think, you know, financial success is everything. But it sure does help when we have a booming economy and where people are incentivized to tackle big challenges, curing diseases, making things easier for parents, making things safer in terms of cars or homes. Those are things that are downstream from a booming, dynamic economy where people are able to pursue economic outcomes that are advantageous to them. And I think there's this, that populist strain that you're talking about, really undercounts or under indexes for the kind of downstream rewards that everybody takes for granted today, that if we didn't have them, people would be really upset, they'd be really unhappy with the state of their lives. So the economy's not everything, but everything about life is better, to a first approximation. When the economy is doing well and offers a lot of opportunity for people in every region and every part of the wage distribution, that's what we should be focused on. And I think people like Tucker just consistently misunderstand that reality.

B (50:48)

Yeah, I think in politics, it is hard to argue the counterfactual, though, of like, hey, you may not be happy with the economy today, but just imagine if we'd not experienced the growth that we have. I think that, you know, people say that when you're explaining you're losing. I think that that probably applies in this situation, starting with the pandemic and the separation or the sort of, like, uncoupling of sentiment about the economy with the actual data about the economy. You know, people feeling a lot more down about the economy than the underlying data would suggest. Some people started explaining it as well. Americans are just expressing their dissatisfaction with just about everything by saying that the economy is doing poorly because it seems like something that encompasses everything. And so you may be dissatisfied with any number of things in American life that aren't directly related to growth, or you may have a lot of anxiety about the future of the country that just get baked into how you respond to these kinds of survey questions. What do you think about that sort of explanation for where we are in terms of the story that we tell ourselves about our economy?

A (52:00)

I think that works for me on some level. I have a more basic story, which, again, is kind of an inversion of conventional wisdom, something we've written about before, which is that people are instinctually afraid of change and they think of too much change as being negative disruption when what they should actually be worried about is too little change and our economy has been too little changeful. The dynamism that has historically powered our economy has been at such a low ebb for the last 20 plus years that I think people are actually feeling the effects of that. Right. What I said earlier about certain trends for American workers. It's not to me necessarily a positive thing that people are less geographically mobile than they once were, that people stick around and are more stuck in place. But that's less disruption at some fundamental level. You're not moving. But that disruption has actually been really healthy for the American economy and for American society in previous generations. The irony that the economy and the society that people like Tucker Carlson are nostalgic for was a much more disrupted age is not lost on me. Right. I think people long for this period that they think was somehow stable. It was not stable. It was highly dynamic, highly disruptive, and produced great outcomes. Rocketing productivity growth, rocketing increases in standard of living, much more broadly diffused benefits for American society than what we've seen today and in the last two decades. So I think that's the thing that I would want policymakers to guard against the most is the kind of incorrect assumption that the way to make people happy is to not is to have a very stable, static guarantee type of economy rather than one that is highly dynamic and talk about things that are impossible to sell to the American people. That's one of them. Impossible to message that one. But it's true. And we see all kinds of ways in which it's true.

B (53:53)

Yeah, I mean, I think that point is really interesting. But you also brought up a word which we haven't exactly addressed head on yet, which is happiness and how happiness may not be the same thing as prosperity. There are pretty stable, static, whatever country like the Nordic countries are, what the happiest countries on Earth. I wonder about that as well. And what the political appetite is for designing American life to be more focused on those metrics versus economic.

A (54:24)

What I think is that we should have an economy where you can do both and where both go hand in hand. And one sign that things are not right and not what they should be is what we see with this is my personal view. Marriage rates, childbearing people starting families and investing themselves in families and all that comes with that. And I think an American life that's increasingly hostile in many ways to children is a sign that something more fundamentally wrong is at play there. These should not be trade offs that people have to make. Pursuing a family and being happy in your personal life and having career success and having an economy that works well and is booming and standard of livings are going up again. That was the norm for decade and decade and decade. So until quite recently, we would have been shocked by the kind of delayed marriage, delayed family formation, delayed or completely skipped childbearing. I mean, it's not that that's for everybody, but those are signs, in my view, of a healthy society, of happiness in the ways that really matter. And there were things you could take for granted about American society up until very recently. So that, to me is a real problem. It's one that doesn't fundamentally have a policy solution. But there are things you can do through policy to not weight society so much towards old people. For example, if you look at the way that the federal government spends money, it is so tilted towards old retirees versus young workers and young families. I think that's scandalous. I think that's the kind of thing again, if you put me in the White House and said, what's the agenda I'd be selling to the American people, it's affordability and it's I'm going to make it easier for you as a family by reweighting the focus of the federal government towards young people and young families in particular.

B (56:10)

All right, well, we started this conversation with you saying that it's a jump ball for whoever is going to pick up that mantle. I think we're going to probably end the conversation in the same way. It seems like there are real divisions within the parties on all of this stuff and it's just going to take time to sort itself out.

A (56:27)

I think that's right.

B (56:29)

All right, thank you so much for joining me today, John, and great to be with you. My name is Galen Droock. Remember to become a subscriber to this podcast@gdpolitics.com and wherever you get your podcasts. Paid subscribers get about twice the number of episodes access to the videos and you can also join in our paid subscriber chat and pass along questions for us to discuss on shows like this. You also ensure that we can keep making this podcast and keep trying to make sense of the world and politics with curiosity, rigor and a sense of humor. If you like this podcast, go rate us on wherever you listen to podcasts, maybe tell a friend even thanks for listening and we'll see you soon.