Economic News to Be Thankful For

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There are plenty of things in the world to be worried about, and day-to-day news headlines have a well-known bias towards bad news (e.g. “all planes lands safely today” is not a news story). But with Thanksgiving upon us, I thought I’d go through some of the positive trends currently happening, both globally and locally. From a certain broad perspective, there is much economic news to be thankful for.

Global Poverty

In the last 30 years, the number of people living in extreme poverty (defined as living on less than $1.90 per day, a level that threatens basic survival) has dropped from roughly 1.9 billion to 734 million. In percentage terms, that drop is from 37% to 10% of the global population. This is an incredible human accomplishment. Most of the credit goes to development in China and Indiana, though major reduction also occurred in Indonesia, Viet Nam and Pakistan. The majority of remaining extreme poverty is in Sub-Saharan Africa, where similarly rapid reduction are expected to remain elusive.

https://ourworldindata.org/uploads/2019/11/Extreme-Poverty-projection-by-the-World-Bank-to-2030-786x550.png

 

Child Mortality

Closely related to extreme poverty, but also owing to continued medical advances, the child mortality rate (defined as the share of children that die before five years old) has followed a steady downward trajectory since around 1900, and stands today at about 5%. It is remarkable to think that nearly half of children died before the age of 5 until the last several decades, which is a blink of an eye in the entire course of human history.

https://upload.wikimedia.org/wikipedia/commons/8/84/Global_child_mortality_over_time.png

Deaths from War

It may seem like the world is somewhat chaotic right now, but the global rate of people dying in wars is low by historical standards. The uptick since 2010 is from the Syrian Civil War, which is currently winding down. We don’t have exact estimates for these rates going farther back in history, but some data suggests they were much higher in older societies.

I could go on with statistics for global literacy rates, life expectancy, and various other health outcomes, but you get the idea.

US and Montana Economic Trends

Economic trends on the domestic front are more of a mixed bag, but there is good news here too! We are currently in the longest economic expansion in US history, as it has been over 10 years since the last recession. And the unemployment rate is near historic lows, as seen below (gray regions indicate recessions).

https://www.whitehouse.gov/wp-content/uploads/2019/05/April-Jobs-Report-1-820x493.png

Low unemployment still hasn’t translated to historically strong wage growth overall, but wage growth among low-wage workers has actually been quite strong, outpacing wage growth for higher earners for the first time in decades:

https://cdn.theatlantic.com/assets/media/img/posts/2019/10/Screen_Shot_2019_10_04_at_12.48.38_PM/46dc1193f.png

Finally, Montana has been one of the strongest-performing states since the recession, with the 6th highest wage growth in the country in the last decade, an average increase of roughly $10,000 in annual wages. Montana’s job and wage growth has been driven by service sector expansion and greater diversification overall.

Again, not all economic trends today are positive, and the gains in prosperity illustrated above have not been enjoyed by everyone. But this is the time of the year to focus on the good things. Happy Thanksgiving!

 

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About Author

Brock Smith is an Assistant Professor in the Department of Agricultural Economics and Economics at Montana State University. He received a PhD from UC-Davis in 2013 and spent three years as a Research Fellow at the Oxford Centre for Analysis of Resource Rich Economies. He mainly studies effects of oil and natural gas shocks in both an international and domestic US setting.

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