Diverging Data: Surveys May Overlook Improving Fortunes of Low-Income Workers

There is a divergence between "hard" economic data showing a strong recovery and "soft" survey data showing economic pessimism. This may be because surveys are underrepresenting the experience of lower-income workers.

Surveys are struggling with declining response rates, which can lead to bias if non-responders aren't random. Evidence suggests lower-income groups are less likely to respond.

The media has focused much more heavily on inflation affecting higher-income groups rather than strong wage growth for lower-income workers. This skews the policy discussion.

If policymakers listen mostly to the louder, wealthier voices emphasized in biased data, it could lead to less supportive policy for working people in the next recession.

We need to make efforts to improve economic measurement and give appropriate weight to the experience of all income groups to avoid exacerbating inequality.