Deals.
I’ve been thinking a lot about this word lately; it’s obviously in the news all the time. But I’m thinking about deals in a much more local sense, because a simple phrase keeps coming up again and again in my research.
Bad deals.
I think we are surrounded by them. The problem is so pervasive we don’t even call them bad deals. But look around. It takes the average family with two good jobs five, six or even seven years to earn enough money to buy a home these days. Compare that to a generation ago, when one person could earn enough in three years to generate the revenue needed for a home.
Buying a home was once the gateway to generational wealth, to freedom from a landlord’s whims, to making sure communities were full of people invested in their future.
Now, buying a home is often just a bad deal. New construction is flimsy, overbuilt, and overpriced. Buy an old home and you’re buying someone else’s problem. And don’t you dare demand an inspection, because there are 100 greater fools behind you lining up to buy that home. And a condo? Forget ever reselling that thing.
The housing market is full of bad deals. Like, seemingly, almost everything else.
Have you read job descriptions lately? Employers have so strong an upper hand they are asking people to surrender nearly all their life for a salary that barely pays for weekly groceries — advanced degree required. And feel lucky we picked you, our AI sorted through 500 resumes before offering you this job. Just one example from a realm I know well — I saw a posting recently for an overnight front page editor at a major news network. This person must be fluent in world events, have the ability to make videos and manage social media, be a master grammarian, have flawless judgement, and work 10 p.m. to 6 a.m. And on weekends. For such an important job, we’d want someone with 10 or 15 years experience, and I’d think someone who’s lived a little. But the salary offered would require her or him to share an apartment with roommates.
Who wants that job? It’s a bad deal. But, it’s a job, right?
Somewhere along the line, you might have heard smarty-pants tech people yell at complaining mid-career professionals that they should “learn to code.” Ah, now that’s a bad deal too. Perhaps you’ve seen the recent spate of stories revealing that computer science graduates are suddenly having trouble finding work. That’s because all that coding was good enough to create bots that write software now, so even those dreadful desk jobs in tech are drying up.
Go to school for four years and leave without prospects? Even though you *didn’t* follow your dream to study art history? What a terrible deal.
Now that I have you thinking about bad deals, I bet you can rattle them off in your own life. Some are small: A decent grocery store steak costs more than one hour’s wages for most Americans right now — and waaaay more than minimum wage. Hotel rooms in Manhattan can cost $500 a night. A commuter train pass costs $250 a month, and once a week, the train strands you anyway. But many are more significant: You pay $1,000 a month for “health insurance,” yet still have to pay every time you go to the doctor.
No wonder we’re in such a bad mood. Americans are trapped in a sea of bad deals. But if this is true, why do business journalists keep telling us unemployment is low and our GDP is so high?
Bad data. Our bad data doesn’t pick up all these bad deals.
There’s been a lot of talk lately about the accuracy of government data, like the unemployment report. I’m all for improving government surveys, but this is a sideshow. The real problem is we don’t even try to measure the things that matter. And we constantly hone in on the wrong things. The Federal Reserve has its two-pronged mandate of low inflation and high employment. The constant kabuki dance about interest rates makes for great headlines, but it has precious little to do with helping families find a decent, affordable place to live. And about the “precarity” most people feel as they face the reality that one job loss or illness could put them at risk of losing their housing.
Economists have a really bad habit of measuring the wrong things. Or, to be kinder, ignoring anything that can’t be counted. Unemployment data simply measures whether a person has a job. That’s barely useful. What if that person is 50 and last year earned $150,000 as an executive, but now they are earning $17 an hour at a Starbucks (and working “full-time”)? I want you to think about your friend group now. How many of them would say they have a good job — a job with meaningful work, that aligns with their training, and that pays enough to fund a good home, a couple of vacations every year, and relative security for the future.
When I say it that way, it sounds like a fantasy. But in fact, it’s simply a good deal. You work hard five days a week, for several decades, and you get to live a pretty good life. That should be the floor, not the ceiling. We’ve been beaten down by bad deals so much that we no longer even question our fate. I believe one of the reasons Americans are so resentful towards government workers, and union workers, is that these jobs represent the few remaining good deals — with their pensions and labor protections and relative work-life balance. At least, until recently.
But more critically, when we are surrounded by bad deals, there is little searching for opportunity. You might be picky about the bananas you pick in the grocery store, but if they’re all green or rotting, you take what you can get.
Forget Gross Domestic Product. Why aren’t we talking about a Gross National Happiness Index? Or at least some decent measure of opportunity and upward mobility. You’ve heard that this generation is the first in U.S. history when kids won’t have a better standard of living than their parents. You can find data to support or reject this notion, but one data point is not in dispute — a very small number of Americans are now accumulating most of the wealth. If it feels like everyone else is fighting over crumbs. that’s because it’s the truth. We are fighting each other instead of fighting for new opportunities, and that’s the point.
I was in Ireland recently and met a man who moved to New York in his 20s. He worked as a bartender for five years — worked hard, of course — but had a nice place in Lower Manhattan. Then one night, he served a couple of travelers who were opening a hotel in California. They liked his accent and his skill, and offered to pay him three months’ salary up front if he’d go to California and run their hotel bar. He took off his apron and headed for the California sun.
That was a good deal. But it was more — it was opportunity. And I just don’t hear these kinds of stories about our times.
I know every economist right now is shaking their heads right now, tsk-tsking that I dare introduce an anecdote into a story about the alleged fading American Dream. And to that, I’d say, please go read The Economist’s Hour by Binyamin Applebaum — about the false prophets of numbers who have come to be revered in the practice of running our nation’s economy, and virtually everything in America. Data is one way to present reality, but it’s not the only way, and it’s often incomplete. We are fools to avoid listening to the stories that are all around us. And you know what’s all around us right now?
Bad deals.
Young people who simply can’t even imagine buying a home. Who can’t imagine finding meaningful work. Middle-aged people with barely enough retirement savings to pay for their first serious medical incident. Neighborhoods of people where every grocery store has been bought and purged by a private equity firm. Doctors and veterinarians who have to answer to those same spreadsheet-wielding vulture capitalists. Small business owners who’ll never own the shop they’ve lovingly curated for decades, and then are told their rent will double. Grandparents who live thousands of miles from the grandkids because that’s the only way their families can afford to eat. And most of us living in a place where we have to drive, sit in traffic, and curse out our neighbors to get a carton of milk.
Bad deals, all of them.
I’ll have more to say soon about the structures that have eroded the American Dream, the social contract of our society. I explored many of these themes in The Restless Project a couple of years ago. But for now, I want you to think about the bad dream of living a life full of bad deals. Share them with me if you will.
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