{"id":165722,"date":"2024-01-31T10:55:52","date_gmt":"2024-01-31T17:55:52","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=165722"},"modified":"2024-02-19T06:56:41","modified_gmt":"2024-02-19T13:56:41","slug":"tiktok-silent-depression-trend","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/tiktok-silent-depression-trend","title":{"rendered":"New TikTok Trend Says We\u2019re in a \u201cSilent Depression\u201d\u2014Are They Right?"},"content":{"rendered":"\n\n      <iframe frameBorder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC8419639477\"\r\nwidth=\"100%\"><\/iframe>  \n\n\n\n\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC4722986187\" width=\"100%\"><\/iframe>\r\n  \n\n\n\n\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC1298145095\" width=\"100%\"><\/iframe>\r\n  \n\n\n\n\n<p><span data-preserver-spaces=\"true\">If you\u2019ve been on TikTok recently\u2014and perhaps even if you haven\u2019t\u2014you may have heard about the viral new concept of a \u2018\u2018silent depression\u2019\u2019 that\u2019s apparently overwhelming younger people in the U.S.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">No, we\u2019re not talking about the country\u2019s mental health crisis. We\u2019re talking about what a few TIkTokers are referring to as the dire economic reality facing ordinary people trying to make ends meet.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The term \u2018\u2018silent\u2019\u2019 refers to the fact that, on the surface, the U.S. economy is doing well. We are not in a recession; unemployment rates are low. And yet, people struggle to afford the basics more than they did in the past.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The idea caused controversy pretty much as soon as it premiered on social media. Economists have responded to the TikTokers by saying that the current economic reality is nothing like the Great Depression. Essentially, to experts on the economy, the whole concept sounds like misinformed complaining.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Who\u2019s right here? Is the \u2018\u2018silent depression\u2019\u2019 concept simply a way for people who could be hustling a little harder to complain about their lot in life? Or is there hard data to support the claims that life has become more expensive than it was for people living through the 1930s economic catastrophe?&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">We&#8217;ll try to be impartial here and look at the claims made in the TikTok videos in more detail.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What Is the Crux of the Debate?<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">The TikTokers in question have struck a nerve with social media users by offering stark comparisons between typical expenses back in the 1930s and today. The basic argument is that core expenses like housing and transportation take up a far greater share of people\u2019s wages than they did in what was presumably the worst economic slump in U.S. history.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">One TIkToker called&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.tiktok.com\/@fmsmith319\/video\/7274018600430619946\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Freddie Smith<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;presents figures from 1930 versus those from 2023. According to the TikTok video, an average house now costs eight times the average salary, while it cost only three times the average salary in 1930. Renting would have taken away 16% of your wage back in 1930, but it will eat up an extraordinary 42% of it now.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Another TikToker who calls himself&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.tiktok.com\/@averagejoegam3\/video\/7270713574094310698\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Average Joe<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;puts it even more strongly in his video: \u201cThe reason why it is called the silent depression is because we have smartphones, we have air conditioning, or people have a T.V. Because we have a credit card, and we can go into as much debt as we want. Essentially, for some reason, that makes us feel like things aren\u2019t as bad as they are.\u201d<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cnbc.com\/2023\/12\/20\/is-the-us-in-a-silent-depression-the-tiktok-theory-explained.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">counterargument from economic experts<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;has run as follows: We\u2019re not in any kind of depression; you can always get a&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/money-482\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">side hustle<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;or unemployment assistance if you\u2019re really struggling, and comparing wages and housing from back then with now is like comparing apples and oranges.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">One argument is that the data pulled up by TikTokers is imperfect: Average wage figures are especially tricky because they\u2019re skewed by the lowest and highest values in a data set. Houses may have been cheaper, but\u2014and this has actually been argued by one of the economists\u2014many didn\u2019t have modern perks like indoor sanitation. In other words, your house may be unaffordable, but hey, it has a toilet, so be grateful.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">We think that, frankly, the emotional responses on both sides are not worth discussing at length here. One side does sound somewhat dramatic with the comparison to the 1930s; the other side, though, isn\u2019t exactly helping by telling people to rejoice in the fact that they have indoor plumbing and that they could always get a second (or third) job.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">What&nbsp;<\/span><em><span data-preserver-spaces=\"true\">did&nbsp;<\/span><\/em><span data-preserver-spaces=\"true\">catch our attention was the true source of the controversy: the potentially incorrect use of historical data and not comparing like for like. We\u2019re going to crunch some data ourselves to see whether it bears out the claim that the typical worker\u2019s purchasing power in terms of housing is less now than it was during the Great Depression.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Ohio as a Case Study of the \u2018\u2018Silent Depression\u2019\u2019 Concept<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">First, we\u2019ll admit that figuring out how much people earned during the Great Depression is a minefield. There were huge regional disparities (they still exist today); wage records mainly took into account male labor; and there were different wage averages for white and nonwhite workers. In addition, IRS records are comparatively sparse because far fewer people regularly filed their tax returns back then.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">So what we&nbsp;<\/span><em><span data-preserver-spaces=\"true\">do&nbsp;<\/span><\/em><span data-preserver-spaces=\"true\">have is an approximation of how much people earned, at best. Still, zooming in a little on a single region can at least give us a bit more accuracy than the average wage number the TikTokers included in their videos.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">There are some fairly reliable&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.ssa.gov\/policy\/docs\/ssb\/v2n4\/v2n4p3.pdf\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">state-by-state wage figures<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;available from the Federal old-age insurance records from the 1930s. Let\u2019s take Ohio as an example. The median wage in Ohio in 1937 was $923 per year. The median wage is exactly that: a figure taken from exactly down the middle of the reported values submitted that year.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Now, let\u2019s take a look at home prices. Although we couldn\u2019t locate the precise median home price for Ohio in 1937, we did find a few examples of what family homes would have cost then. A \u2018\u2018Colonial Brick Home, six modern rooms and bath with open fireplace in living room\u2019\u2019 was&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.thepeoplehistory.com\/30s-homes.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">advertised in Mansfield, Ohio<\/span><\/a><span data-preserver-spaces=\"true\">, in 1937 for $6,000. A \u2018\u201871-acre farm with 6-room house, electricity and bath and large orchards\u2019\u2019 was going for $4,200 in 1938.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">These are big properties, very likely priced above what was average in Ohio at the time. Still, a person on a median income in the state could buy a farm with orchards and a six-bedroom house (note the presence of electricity and indoor plumbing!) for just over four times their salary.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">From 2018-2022, Ohio had a median household income of&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.census.gov\/quickfacts\/fact\/table\/OH\/INC110222\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">$66,990<\/span><\/a><span data-preserver-spaces=\"true\">. The median sales price of a house was&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.columbusrealtors.com\/news\/2023\/01\/20\/1homepage\/central-ohio-housing-report-december-2022\/#:~:text=On%20average%2C%20homes%20sold%20for,to%20%24275%2C000%20in%20December%202022.\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">$275,000 in December 2022<\/span><\/a><span data-preserver-spaces=\"true\">. And, guess what: We tracked down a&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.trulia.com\/home\/234-park-ave-w-mansfield-oh-44903-211202583\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">six-bedroom house in Mansfield, Ohio<\/span><\/a><span data-preserver-spaces=\"true\">. It was on sale for $349,900. It doesn\u2019t have acres of land or orchards, but still. That\u2019s just over five times the annual median salary. It\u2019s actually not that different a financial commitment from what it was in 1937.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Does that mean that the \u2018\u2018silent depression\u2019\u2019 thing is just a load of self-pity? Well, not quite. It\u2019s clear that the term was chosen because it\u2019s catchy and gets clicks. But the data would\u2019ve been more convincing had the TikTokers chosen a different decade for their comparisons.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Let\u2019s take the year 2000\u2014in many ways, a symmetrical time to our own; the U.S. economy was doing well, even though there was a mild recession ahead in 2001. The&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cleveland.com\/datacentral\/2012\/09\/historical_median_household_in.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">median Ohio household income in 2000<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;was $56,111. The&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www2.census.gov\/library\/publications\/decennial\/2000\/briefs\/c2kbr-20.pdf\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">median home sale price in Ohio<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;in 2000 was $103,700.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">We couldn\u2019t find exact home prices for six-bedroom Ohio properties at the time, but let\u2019s assume that, as was the case in 2022, a six-bedroom home would\u2019ve cost you 127% of the median home price. That would make it cost about $132,000. That means a typical 2000 Ohio household could purchase a large family home for<\/span><em><span data-preserver-spaces=\"true\">&nbsp;just over twice<\/span><\/em><span data-preserver-spaces=\"true\">&nbsp;the annual salary. Note that the median salary was lower both in real terms and in absolute terms in 2022. Now, that gives us some real food for thought.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Currently, purely in terms of real estate, an Ohio household on a median income has a purchasing power more comparable to a household during the Great Depression (with which the current times, we are told, have nothing in common) than with the economically prosperous year of 2000. That just isn\u2019t right. They definitely had indoor toilets in 2000; they had Medicaid and unemployment benefits. What else did they have? Higher wages in terms of what people could actually buy.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Oh, and before anyone suggests that they earned more in 2000 because they all worked multiple jobs, the data doesn\u2019t support that at all. The&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.bls.gov\/opub\/ted\/2001\/sept\/wk3\/art05.htm#:~:text=Last%20year%2C%205.6%20percent%20of,from%205.8%20percent%20in%201999.&amp;text=States%20continued%20to%20show%20considerable,pattern%20from%20North%20to%20South.\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">number of people holding more than one job<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;has remained pretty stable\u2014it\u2019s currently 5.6% of U.S. workers, down from 5.8% in 2000.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The Bottom Line<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">So, no, at least in Ohio, things aren\u2019t as bad as during the Great Depression. But in several crucial ways, they are almost as bad as they were back then for millions of people. The economy is not in a depression, but housing affordability should look very different than it does right now\u2014as in more like 2000 and less like 1937.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">At least in terms of&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/on-the-market-145\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">accessibility of<\/span><\/a><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/on-the-market-145\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> homeownership<\/span><\/a><span data-preserver-spaces=\"true\">, the TikTokers have a point.<\/span><\/p>\n\n\n\n<div id=\"hero-block_62df1a82bfc88\" class=\"first:mt-0 hero-block py-4    has-background has-slate-200-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-slate-800-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">\u201cSilent Depression\u201d or Complete Delusion: How Bad IS The American Economy? w\/Jessica Dickler<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:16px\">According to social media, a \u201csilent depression\u201d is widespread across the American economy, with\u00a0high\u00a0inflation, limited wage growth, and\u00a0low homeownership\u00a0for millennials and Gen Z. But is that really happening? Let&#8217;s hear what the economists have to say.<\/p>\n\n\n\n<div id=button-custom-event-block_654009d806887 class='button-custom-event'>\n      <a href=\"https:\/\/link.chtbl.com\/AAZs0dGN\" x-on:click=\"window.analytics.track(&#039;OTM Podcast Blog CTA Click | Episode 158&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/tiktok-silent-depression-trend&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-slate-dark-background-color has-text-color has-white-color\" target=\"_blank\" rel=\"noopener\">Listen Now<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\" first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  shadow-xl rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/05\/On-The-Market-scaled-e1660859845837.jpg\" alt=\"\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>Some TikTokers are arguing that American purchasing power is at even lower levels than it was during the Great Depression. An online battle between Gen Z influencers and highly educated economists broke out, and both sides have good points. We look at the facts.<\/p>\n","protected":false},"author":613618,"featured_media":165732,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7383,7119],"tags":[],"class_list":["post-165722","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/165722","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613618"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=165722"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/165722\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/165732"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=165722"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=165722"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=165722"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}