What social trends told us about the US economy in 2021
By Jeanna Smialek
If 2020 was the year that made Zoom a verb and imbued the phrase “online dating” with new meaning, 2021 was its annoying younger sibling. Things were not quite as novel and scary as the darkest early days of the pandemic and initial state and local lockdowns, but the year found new and creative ways to be bad.
Shutdowns were not nearly as widespread, but continued waves of coronavirus infection caused factories to shutter and people to retrench from economic life. This was a year in which the Duke of Hastings replaced the Tiger King as a national obsession, vaccine cards became a passport to seminormal life, and the internet lost its hive mind over America’s cream cheese shortage.
Social trends like those can tell us a lot about the economy we are living in. To wrap up 2021, we ran down what some of the big cultural moments and movements taught us about the labor market, economic growth and the outlook for 2022.
The everything shortage
Sadly, it was not just the schmear that ran out this year. Many, many things came up short in 2021. For a while, people tried to blame the fact that they could not get hold of a couch or a used car on a ship stuck in the Suez Canal, but society eventually came around to the reality that we have all been buying so much stuff that we have collectively broken the supply chain.
Government stimulus checks and savings amassed over long months at home have been fueling strong consumer spending, and the virus has shifted spending patterns away from services like restaurant meals and plane tickets and toward goods. Container ships, ports and factories could not keep up with the unusual boom, especially as new virus waves spurred occasional shutdowns.
Product shortages have spurred price increases, helping to push inflation up to the fastest pace in nearly 40 years. The big question is whether high inflation will continue in 2022. As the omicron variant threatens to throw more kinks into global supply lines, economic policymakers worry that it will persist.
An anti-work era?
About 1.5 million “idlers” and counting have joined a community on the site Reddit dedicated to “those who want to end work, are curious about ending work, want to get the most out of a work-free life.” If you were looking for a perfect expression of pandemic populist angst, that might be it: It is replete with stories of bad bosses, workday abuses and both planned and spontaneous quits.
Redditors were not alone in getting excited about leaving jobs this year. Americans quit their jobs at record rates, in what was labeled “The Great Resignation” or the “Big Quit.” Myriad essays and articles have tried to assess why people are throwing in the towel, but most agree that it has something to do with burnout after long months of exposure to public health risk or endless online hours during the pandemic.
Some have suggested that a collective life-or-death experience has caused people to reassess their options, while others have suggested that the same government-padded savings that are allowing people to spend so much are giving them the wherewithal to be pickier about where they work and how much they are paid.
This may also have been the year that “OK, Boomer” ceded the floor to “You OK, Boomer?”
A recent Federal Reserve survey of business contacts found that several “noted that baby boomers were leaving jobs and selling businesses to retire early — a trend that was due (1957 marked the peak year for births among baby boomers; those babies turn 65 next year) but has accelerated because of pandemic burnout.”
That shows up in the data. People over the age of 45 have been slower to return to the job market since the start of the pandemic. That group includes Generation X, who range in age from 41 to 56, and baby boomers, who are roughly 57 to 75. It is not clear if the apparent rush toward early retirement is going to stick; people may come back once the health scare of the pandemic is behind us or if stocks return to less buoyant valuations, reducing the value of retirement portfolios.
What happens next with the middle-age-and-up workforce will be pivotal to the future of the labor market. If older workers stay out, America’s labor force participation rate — and the pool of workers available to employers — may remain depressed compared with levels that prevailed before the pandemic. That will be bad news for employers, who are increasingly desperate to hire.
Generational warfare, skinny jean edition
Do not shed all of your tears for the baby boomers, because millennials also had a tough time in 2021. They divided the year between reminding the internet that they are graying, keeping Botox boutiques in business, and feeling aghast as Generation Z, their successors, accused them of being old. A generation that made the poorly informed decision to recycle the low-rise trend also had the gall to claim that side parts make people look aged and skinny jeans are out.
Whether their elders are ready for it or not, the reality is that Gen Z, the age group born from 1997 to 2012, began to enter adulthood and the labor market in full force during the pandemic. They are a comparatively small generation, but they could shake things up. They are fully digital natives and have different attitudes toward and expectations of work life than their older counterparts.
If office workers ever actually meet their new colleagues, things could get interesting.
Travel remained depressed
Borders closed, and opened, and closed again or included restrictions as waves of the coronavirus tore across the world map this year. The same uncertainties facing national governments kept many travelers at or near home; international travel remains sharply depressed. Global tourism remained 76% below pre-pandemic levels through the third quarter, based on data from the World Tourism Organization.
Aside from Emily, its seems as if relatively few of us are making it to Paris these days. That is bad news for travel-dependent industries, and it is also one of the reasons that spending patterns are struggling to shift back toward services and away from furniture, exercise equipment and toys. That has kept inflation high across much of the world.
QR codes are on the menu
Even when we did shift our consumption dollars back to experiences, those were often much changed by the pandemic.
A case in point: Many restaurants have moved to QR codes instead of physical menus. Some of this is for sanitation, but companies are also turning to small doses of automation as a way to cut down on labor, as employees are scarce. That has the potential to improve productivity (the data so far on whether it is working are mixed.) If companies do become more efficient, it could lay the groundwork for sustainably higher wages: The server who is now juggling twice as many tables as diners order from their phones can take home a fatter paycheck without chipping away at the restaurant’s profits.
But it remains to be seen whether workers will win out as companies streamline their operations to meet the moment. So far, corporate profits have been soaring to record highs, but wages gains are not quite keeping up with inflation. Things are changing fast, so how that story develops will be a trend to watch in 2022.