The Great Wage Stagnation

Inflation Risk is the Wrong Recession Lesson

This might be the most dangerous economic assertion circulating today: the high inflation from 2021-2023 was caused by government stimulus. The talking point on the right goes: the third COVID-era stimulus checks landed in March 2021, prices took off, case closed. Of course reality is more nuanced. And most serious estimates pin only a point or two of the inflation peak on the bill; the rest was supply chain chaos, a global chip shortage, and the Ukraine war. The pandemic caused the worst job loss on record — and the response produced the fastest labor-market recovery we've ever had, because policymakers went big. The danger is that they remember the inflation and forget the recovery. Chapters: 00:01:14 Announcements 00:03:24  Retcon: Q1 GDP Revised  00:04:50 Terms & Conditions: Output Gap, NAIRU, "The Long Depression" 00:11:49  Big Pilcrow: Is Recession Recovery Getting Blamed for Inflation? 00:42:14  Executive Orders: Parallel parking licenses, FIFA ticketing ban 00:45:52  Spiritual Sponsors: Small hardware stores, handwritten letter to OE * Support Optimist Economy: https://optimisteconomy.com/donate [https://optimisteconomy.com/donate] * Video-curious? Watch the Optimist Economy YouTube channel⁠⁠ [https://www.youtube.com/@optimist_economy]. We’re also on Instagram at ⁠⁠@optimist_economy [https://www.instagram.com/optimist_economy] or TikTok at ⁠⁠@optimist_economy [https://www.tiktok.com/@optimist_economy]. Or search for us on Facebook. * Chat with Optimists on Substack. [https://substack.com/chat/4604257?utm_source=pub-nav-bar] * Hats, tees and totes: https://merch.ambientinks.com/collections/optimisteconomy [https://merch.ambientinks.com/collections/optimisteconomy] * Reach us at: optimist.economy@gmail.com [optimist.economy@gmail.com]

Make the Economy Work for Freelancers, Too (#askingforafriend)

Thirty million Americans, more or less, work for themselves. They freelance, do gig work, have solo LLCs, or — as a certain economist says — participate in “ non-employee employment.” The economics of their situation is harder than it needs to be. Making self-employment more viable is good for everyone in the labor market, because when workers have options, they also have more power. Plus: Kathryn Anne Edwards testified before the House Ways and Means Committee, and a congressman implied she wasn't a real American. She has thoughts. Chapters: 0:00 — Start/Announcements 1:21 — Retcon: Bad banks, good overtime, and testifying before Congress (again) 18:17 — Big Pilcrow: Freelancers & non-employer businesses 44:42 — Executive orders: national anthem singing rules, Congressional attendance policy 47:20 — Spiritual sponsors: Supportive listeners and horchada + cold brew coffee 49:01 — Credits * Donate to Optimist Economy: https://optimisteconomy.com [https://optimisteconomy.com] * Video-curious? Watch the Optimist Economy YouTube channel⁠⁠ [https://www.youtube.com/@optimist_economy]. We’re also on Instagram at ⁠⁠@optimist_economy [https://www.instagram.com/optimist_economy] or TikTok at ⁠⁠@optimist_economy [https://www.tiktok.com/@optimist_economy].  * Chat with other Optimists on Substack. [https://substack.com/chat/4604257?utm_source=pub-nav-bar] * Find utility with our merch: https://merch.ambientinks.com/collections/optimisteconomy [https://merch.ambientinks.com/collections/optimisteconomy] * Got economic questions, concerns, or executive orders?  Send them to optimist.economy@gmail.com [optimist.economy@gmail.com]

About That College Grad Who Can’t Find a Job…

(Originally aired 7/1/2025) Newly minted college graduates are having a harder time landing that first job than in recent years. Is it AI? Is college useless? Is it a crisis? (No. No. And not yet…) College graduates under 27 still have significantly lower unemployment rates (5.8%) than high school graduates of the same age (6.9%). What economist Kathryn Edwards finds worrying is that these new workers, who are typically a lagging economic indicator, may in this case be a bellwether of a weakening economy.  Support the Optimist Economy podcast by becoming a paid subscriber on Substack [https://optimisteconomy.substack.com/], or donating at https://buymeacoffee.com/optimisteconomy [https://buymeacoffee.com/optimisteconomy] Complete show notes with links to articles and data at optimisteconomy.com [https://optimisteconomy.substack.com/p/podcast]. You can also find Optimist Economy on: * TikTok [https://www.tiktok.com/@optimist_economy] * YouTube [https://www.youtube.com/@optimist_economy] * Instagram [https://www.instagram.com/optimist_economy/] -------- Read More: * The Labor Market for Recent College Graduates [https://www.newyorkfed.org/research/college-labor-market#--:explore:unemployment] [New York Fed, 2025] * Hires, from the Job Openings and Labor Turnover Survey [https://fred.stlouisfed.org/series/JTSHIR] [St. Louis Fed, 2025] * Downskilling: changes in employer skill requirements over the business cycle [https://www.sciencedirect.com/science/article/abs/pii/S0927537116300240] [Labour Economics 2016] * Upskilling: Do Employers Demand Greater Skill When Workers Are Plentiful? [https://direct.mit.edu/rest/article-abstract/102/4/793/96774/Upskilling-Do-Employers-Demand-Greater-Skill-When?redirectedFrom=fulltext] [The Review of Economics and Statistics 2020]

Should We Cherish the Ultra-Wealthy? (a.k.a. ‘The Cornfield’)

A certain kind of wealthy American has been griping out loud lately — about taxes, about progressive cities, about how unappreciated they are for the jobs they create, the stuff they buy, and the tips they hand out. A narrative is coalescing around them too: that the top 10% of earners now do so much of the spending, the U.S. economy relies on them. But an economy that depends so much on the people at the top isn't the healthy one the country deserves — it’s just wearing a nice suit. Chapters: 00:00:56 Announcements: Q&A episode questions wanted 00:01:18 Retcon: The 86 debate; FDR's full "calamity howling executives" quote 00:05:32 Terms & Conditions: Wealth Effect and Zugzwang 00:09:26 Big Pilcrow: Should we cherish the ultra-wealthy? 00:36:41 Executive Orders: Retire "mummies"; union credits on red carpets 00:39:34 Spiritual Sponsors: Mellow Cello podcast; enormous floral arrangements Further Reading Moody's claim that the top 10% of earners now drive nearly half of consumer spending in the WSJ: https://www.wsj.com/economy/consumers/us-economy-strength-rich-spending-2c34a571 [https://www.wsj.com/economy/consumers/us-economy-strength-rich-spending-2c34a571] The Minneapolis Fed on what the underlying data actually shows. https://www.minneapolisfed.org/article/2026/have-us-consumers-gone-k-shaped-a-review-of-the-data [https://www.minneapolisfed.org/article/2026/have-us-consumers-gone-k-shaped-a-review-of-the-data] Wealthy part-time New Yorkers reacting to a proposed pied-à-terre tax in the Financial Times. https://www.ft.com/content/3283eaab-e9cf-41e6-a028-5a02fb6f4615 [https://www.ft.com/content/3283eaab-e9cf-41e6-a028-5a02fb6f4615] The Wall Street Journal on second-home taxes spreading from New York City to other states, including the San Diego homeowner who'd like to be cherished. https://www.wsj.com/real-estate/taxes-on-second-homes-are-springing-up-across-america-93a64448 [https://www.wsj.com/real-estate/taxes-on-second-homes-are-springing-up-across-america-93a64448] Full reading list at https://optimisteconomy.substack.com * Donate to Optimist Economy: https://optimisteconomy.com [https://optimisteconomy.com] * Video-curious? Watch the Optimist Economy YouTube channel⁠⁠ [https://www.youtube.com/@optimist_economy]. We’re also on Instagram at ⁠⁠@optimist_economy [https://www.instagram.com/optimist_economy] or TikTok at ⁠⁠@optimist_economy [https://www.tiktok.com/@optimist_economy].  * Chat with other Optimists on Substack. [https://substack.com/chat/4604257?utm_source=pub-nav-bar] * Find utility with our merch: https://merch.ambientinks.com/collections/optimisteconomy [https://merch.ambientinks.com/collections/optimisteconomy] Got economic questions, concerns, or executive orders?  Send them to optimist.economy@gmail.com [optimist.economy@gmail.com]

No Overtime for the Supervisor of Sandwiches

It wasn’t just hourly factory jobs that were supposed to come with a 40-hour workweek. Even salaried jobs were supposed to get overtime pay, though very few do do anymore. Overtime protections are the only legal mechanism enforcing work-hour limits, and for 50 years, the salary threshold that determines who qualifies to receive overtime has been left to erode. Employers found another workaround too: just call the sandwich maker a "sandwich manager." Now, the new no-tax-on-overtime deduction isn't protecting workers — it's rewarding the kind of overwork it was overtime was originally designed to punish. Fixing the law governing overtime would be a huge and instant boost not just to the U.S. economy, but to our work-life balance. Chapters: 00:01:43 Announcements 00:02:32 Retcon: Economic data reliability 00:05:54 Terms & Conditions: Tenterhooks; Perquisite  00:08:23 Big Pilcrow: Overtime  00:45:27 Executive Orders: Badge of shame for working past 40 hours; more colorful cars 00:46:52 Spiritual Sponsors: Awesome first bosses; Faraday e-bike * Donate to Optimist Economy: https://optimisteconomy.com [https://optimisteconomy.com] * Video-curious? Watch clips on the Optimist Economy YouTube channel⁠⁠ [https://www.youtube.com/@optimist_economy]. We’re also on Instagram at ⁠⁠@optimist_economy [https://www.instagram.com/optimist_economy] or TikTok at ⁠⁠@optimist_economy [https://www.tiktok.com/@optimist_economy].  * Chat with other Optimists on Substack. [https://substack.com/chat/4604257?utm_source=pub-nav-bar] * Find utility with our merch: https://merch.ambientinks.com/collections/optimisteconomy [https://merch.ambientinks.com/collections/optimisteconomy] Got economic questions, concerns, or executive orders?  Send them to optimist.economy@gmail.com [optimist.economy@gmail.com]