What’s left out of the inflation calculation

Make Me Smart March 4, 2024 Transcript

Note: Marketplace podcasts are meant to be heard, with emphasis, tone and audio elements a transcript can’t capture. Transcripts are generated using a combination of automated software and human transcribers, and may contain errors. Please check the corresponding audio before quoting it.

Kai Ryssdal 

Shall we?

Kimberly Adams 

Yes. We shall.

Kai Ryssdal 

All right, let’s. Producers are along for the ride.

Kimberly Adams 

Hello, everyone, I’m Kimberly Adams. Welcome back to Make Me Smart, where we make today make sense.

Kai Ryssdal 

I’m Kai Ryssdal. Monday 4 March. Thanks for being along.

Kimberly Adams 

Yes, today we are going to do some news and some smiles as we do on Mondays just to get the week started on a newsy and smiley note. But let’s start with the news. Kai, what caught your attention today?

Kai Ryssdal 

There was a piece on the Marketplace Morning Report this morning that, you know, hopefully some listeners of this podcast listen to regularly but if not, it was super interesting. David Brancaccio, who’s the host of that program, did an interview with one of their regulars. His name is Christopher Low. He’s chief economist at FTN Financial in New York.

Kimberly Adams 

FHN Financial now. It used to be FTN. And now it’s FHN.

Kai Ryssdal 

God, wow. Okay, so FHN financial, which I still don’t know what it stands for, but that’s neither here nor there. Anyway, they were talking about inflation a little bit, and you know, blah, blah, blah. Inflation. We’ve heard a zillion different things about inflation. This though, was really interesting because there is a paper out. I think it’s from the National Bureau of Economic Research that Chris and his buddies have been talking about, and we’re going to put the interview itself on our show page, so that you can listen to it yourself. It runs about two and a half minutes. And just a little behind the scenes curtain of making radio magic. What you’ll hear is Chris say, “Hello, David,” as if David has just in live radio terms just thrown to the interview. And they’re going to be off and running. But anyway, so lots of things are going to the inflation calculation, right? There’s owner equivalent rent, and there’s food and energy and all kinds of other things. What’s not in there is the cost of money. The actual effect of interest rates, and what they do to the inflation calculations. It is super interesting. I will not steal that interview’s thunder. Chris lays it out really, really well. But suffice it to say that if the official measures of inflation, CPI, and the personal consumption expenditures index, if they included the actual price of money, inflation would be much higher. Anyway, go listen to it. It’s really good. Take you two and a half minutes. Really nice interview from David and Chris Low this morning.

Kimberly Adams 

You know, I was listening to that as well. And also, second the recommendation to go and listen to that. But when I hear these sort of new takes on data, which also relates to my news item, it reminds me of the conversation we had in Seattle before we did the live show. And we were at the local member station in Seattle, and we’ve talked about how much more data about the economy is available to policymakers now compared to the past. And I really do suspect, and I hope somebody with like degrees in this actually does research on it, to actually analyze whether or not the fact that we have access to more data about more sectors of the economy more quickly, is allowing policymakers to potentially engineer this soft landing. Like they know more about what women are doing. What people are of color doing. What people in the black market and gray market are doing. They know more quickly when people are getting hired and fired or when they’re quitting jobs. And the different types of inflation, you get that data instantly now, which they didn’t have back in the 70s. And I really don’t know that we’ve, I’ve heard a good explanation about how much that matters in the economy, in the recovery that we’ve seen, you know.

Kai Ryssdal 

Right. No, that’s a really good question. High frequency data. Totally.

Kimberly Adams 

Yeah, exactly. Well, speaking of data. My news item is, I’m kicking myself about this, because I saw this data set when it dropped. And I was like, huh, that’s interesting. But I did not do what the Washington Post did and do a giant big explanation of it because I didn’t realize how new it was. So, the Bureau of Labor Statistics in February dropped this new data set of occupational requirements survey. And it’s looking at how physically demanding jobs are. They’ve been working on this apparently for the last couple of years to try to assess what jobs are physically demanding, and the frequency of effort, the pace of work and things like that to help lots of different government agency make determinations about disability claims and whether or not people can work and can they keep doing their own jobs if they have an injury or something like that. So, they looked at something like I mean, not something. I’m going to tell you exactly what they look like. It’s a five-year effort to collect 148,600 observations of the physical requirements of about 480 jobs at 56,300 US workplaces. And the data coming out of this is super interesting. The Washington Post does a wonderful breakdown, as they always do with their department of data section. But what would you say, if you haven’t looked at it yet, is the toughest job in America? Most physically demanding.

Kai Ryssdal 

Warehouse worker. Amazon.

Kimberly Adams 

Firefighters. Firefighters.

Kai Ryssdal

Oh, of course. Of course, yes. Of course.

Kimberly Adams

And so, just to read a little bit about this. Firefighters spend like, so the way they were ranking this was the percentage of workers who are required to do each action or exposed to each stressor. “Firefighters, 97% of them have to do some climbing. 92% of them have to do some pushing or pulling. 98% of them have to do some reaching out or down. 99% reaching overhead.” It goes on. And I’m going to read this very funny section. They talk to a firefighter. Last name Kelly. “Kelly has spent his entire 27-year career with the same South End ladder truck. We asked him if our ranking rings true. ‘It doesn’t surprise me in the least,’ he told us. ‘This job kicks the absolute stuffing out of you.’ For the record, Kelly who spoke with the gruff journalist charming charisma you’d expect from a man who’s led the International Association of Firefighters since 2021, did not say stuffing.” He said, “I can’t think of another profession where you put 100 pounds of gear on and just go on a routine call.” Yeah, very interesting article. And even the report itself is interesting. If you look at the actual report, it talks about the pace of work. And the first line of it says “a consistent and generally fast pace of work was required for 38.9% of workers in 2023, and workload was controlled by machinery equipment or software for 2.2% of workers, meaning that technology rather than people or company performance targets determine the amount and timing of work performed in their workday,” as in like a machine controls how much you work. It’s full of interesting data. So that’s one news item. And then very quickly, I just wanted to nod to the fact that the IRS has opened its direct file program for the 12 states that are eligible, and I’ll be super interested to know how that goes given how, yeah.

Kai Ryssdal 

So, we’re going to. I talked to Dylan Matthews at Vox on Friday. We’re going to air it this week I think, about that direct file program and why it’s taken so long, what some of the challenges are, and who’s going to be able to use it. The short answer TLDR is not everybody in those 12 states is going to be able to use it, but it’s super interesting, and it’s a long overdue step forward for the IRS.

Kimberly Adams 

Yeah, it really is. Okay, all right. Well, that’s what I got.

Kai Ryssdal 

Alright, smiles. What do you got?

Kimberly Adams 

I have a story from The Guardian about architecture. And we get so much doom and gloom climate news that I always love the stories that talk about people working with limited resources to do something helpful. And this is a story about architects in Burkina Faso, who are using traditional local materials, traditional techniques, and with a mix of modern skills and technology to build orphanages and schools that are making things easier for the community. And the headline is, “‘We don’t need air con’: how Burkina Faso builds schools that stay cool in 40 degrees Celsius heat,” which is. What is that? Like 100 and something.

Kai Ryssdal 

Double it and add 32. It’s 112-ish.

Kimberly Adams 

yeah, it’s very, very hot. And you know, they’re building, like stamped, they’re using like stamped clay floors and bricks made out of particular types of stone the way that they’re like laying the building out allows for airflow, and so they’re building these really nice looking building for their orphanages and for their schools to, you know, not be miserable in the heat that’s only going to get worse. And I just thought that made me happy, so that’s my smile.

Kai Ryssdal 

That’s awesome. Super interesting.

Kimberly Adams

What’s yours?

Kai Ryssdal

So, here’s, you saw it first. You put it in the in the Make Me Smart Slack. Audie Norman, regular listener and also artiste, did a number of years ago, did a drawing of me and Molly. He has done after hearing our anime discussion this past Tuesday. He has done a drawing of Kimberly and myself in anime style. Kimberly, what do you think?

Kimberly Adams 

I think it’s very good, but I also think because I’ve watched so much anime, how different characters are drawn typically reveal stuff about your personality. And so, I’ve got sort of like the wide-eyed doe look of like the innocent excited person. But also like the eyebrow is the “I could also kill you in secret.” And you’ve got like the rugged warrior look going for you in anime style. So, like if you watch enough anime you can sort of quickly look at those and see like exactly what types of like characters were drawn to play there. And I think I would also be interested to hear other people’s take on it. Audie, he did my hair great. I love that.

Kai Ryssdal 

Your hair looks great. What’s interesting about me and the whole rugged warrior thing. I’ve got lines on my face, man. I’m an old man. That’s how it read to me, right? You’re all smooth and young.

Kimberly Adams 

No, I got a line under my eye.

Kai Ryssdal 

Yeah, anyway. Anyway, we’re going to go now. That’s it. We are taking off.

Kimberly Adams 

Yes, yes, we are going to take off. Join us tomorrow for our weekly deep dive. We’re going to be talking about populism: what it is, why populist movements are on the rise around the world, and what the economy has to do with it.

Kai Ryssdal 

Till then, send us your comments, your questions. We will also put that drawing of us on the show page by the way and you can just you know, leave your comments about that too. You know how to get a hold of us. Email us at makemesmart@marketplace.org. Or leave us a message 508-U-B-SMART.

Kimberly Adams 

Make Me Smart is produced by Courtney Bergsieker. Today’s program was engineered by Juan Carlos Torrado. Ellen Rolfes writes our newsletter. And our intern is Thalia Menchaca.

Kai Ryssdal 

Marissa Cabrera is the senior producer of this podcast. Bridget Bodnar is the director of all podcasts at Marketplace. Francesca Levy is the executive director of Digital and On Demand.