The Indicator from Planet Money - Some Listener Questions!

Cardiff and Stacey answer some listener questions about the rebounding demand for gas, the rise of contactless payments, and how wages have changed for low-income workers over the past few years.

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NPR

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Everyone Cardiff and Stacy hear. This is the indicator from planet money. We have wonderful listeners here on the indicator and every day a lot of you send us questions questions that we love trying to answer her on the show. Sometimes we even answer this question to successfully other times maybe not so much. I don't know but we love trying is the point about the E for effort. So we enter three great questions and we had to start with this one to suggest street from San Rafael, California. I recently saw a graph showing an astounding rebound and gasoline demand return almost Capri color levels after a 40% drop in April question because I love it so much. I recently saw a graph is not a sentence like that is not the way that most people start sentences, but you're at the indicator we start so many sentences with I recently started photographing. We saw this when you're like we've got to take this question.

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Whatever comes next we're in that's how you act in Decatur today. Anyways, here's the rest of Jeff's question about why demand for gasoline is recovered so much after that huge drop in April with so many office workers still working from home mini school still online and Airline demand way down. How can this be? And I totally the roads do seem more crowded. Where is everyone going? Thanks. Thanks Jeff the most recent data we have she was a total vehicle miles traveled on roads and streets. So that's you know cars and trucks in July that was about 11% lower than the vehicle miles traveled in July of last year. So driving he's still way down. But Jeff is right that's nowhere close to the 40% down then it was an April people are driving more than they were in the month right after the pandemic. So okay, I mean s Jeff put it like where is everybody going? We can't know where everybody's going. But we do it this one big clue, which is simply that more people.

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Are commuting to work again in may still early in the pandemic only 48% of workers were commuting to work at least one day a week but is the economy in many places reopened and millions of people who lost their jobs were rehired by August. It was back up to 64% people were commuting. That's all according to a monthly survey by the Federal Reserve Bank of Dallas and also it is definitely true that there are more people working from home everyday now than before covid-19 half times more in fact, but that's same survey found that even now it's still only about 20% of workers. Now that's a lot but it is still way fewer than the share of workers who commute to work place each week so we can say for sure where everybody's driving these days but we suspected a big part of the answer is to work before driving to work. That's where he was going to work. Thanks, Jeff and after a quick break two more listener questions one is about what really drives wages up and down and the other about the end of a cat.

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Okay time for a second question. This one comes from Mitch in Stuart Florida pay with debit or credit instead of cash. And I've also noticed many more places send me accepting contactless chips and or Apple pay. So my question to you is do you see some of this persisting post-pandemic and what effects might this have on business and the economy in general?

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In New York a lot more places are suddenly like going cashless. This has been happening for a while. And if that's starting in 2018 cash was no longer the most common form of payment for things in the US. Yeah. It was overtaken by debit cards in 2018. But yeah, according to the bank for international settlements the pandemic has definitely accelerated the trend towards more contactless payment and these include credit and debit cards with contactless options, which could just be buying things online or the ones that have chips on them. So you don't actually have to touch the payment terminal and it also includes smartphone apps like venmo or PayPal and other options bank for international settlements gives a few reasons for the acceleration towards contactless payments during covid-19.

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Disclosed answer how this change might affect the economy as Mitch asked will it obviously gives people more options for how to pay for things and that's been really helpful in a time when so many physical stores in Bank branches have been closed, but there is a big segment of the population that could struggle with this and it is the unbanked and underbanked population. These are people who either don't have a bank account at all, or do you have bank accounts? But don't always use them for different reasons, and that is about 22% of adults the unbanked and underbanked. The reason is that contactless payment options in the US still mostly require that you have a bank account connected to those options as though people who don't have bank accounts or who don't use them are left behind their options for paying for things suddenly become more limited, especially because some products increasingly. It might no longer be available to people to buy with cash. Finally. We received a really important question from Suzanne of Portland, Oregon.

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We were guests on it's been a minute the podcast hosted by our friend amazing, Sam Sanders and specifically we were talking about how right before the pandemic wages for people who worked in low-wage Industries forgettable restaurant servers or workers a child day care centers their ways. We're actually going up faster than the wages of people who work in highways Industries, like lawyers and bankers. I've also take credit for this but haven't we also had multiple State mandated minimum wage increases during that time? Is it possible to parse out the possible reasons for the rise in wages? I'd love to hear your thoughts and preciate the work you do. Thanks a lot. What is the reason for the rise in wages for lower-income workers Economist generally point to a couple of specific reasons that we just have been growing so much for these low-income workers before the pandemic the labor market had become really tight with that means is that so many workers already had jobs the companies who needed workers had to make really good offers to hire people away from competitors and companies old would offer a pirate.

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It is to their own workers or risk losing them to competition in the second reason is Suzanne says within roughly the last decade did it become increasingly popular for state and local governments to raise their minimum wages, which of these regions was more important in this mix return to analysis from earlier this year by Economist Ernie Tedeschi and it looked at what was happening for the one third of the population that had the lowest wages and right before the pandemic their wages were going by roughly 4% here, which was faster than everybody else's wages. And Ernie found was that about 80% of that impressive rise in wages was because of the strong labor market the rest was because of the rises in the minimum wage still both reasons. Definitely matter Suzanne a strong labor market just mattered more. The reason we really wanted to answer this question is because it is a reminder of how powerful the economy can be and what it was capable of before the covid-19 shin. It is too early to know what the long-term effects of the pandemic will be on the way to

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Not yet clear what we do know so far is that low wage workers have been overwhelmingly much more likely to lose their jobs than Highway twerkers, which means that they now have a longer way to go before the labor market is tight for them again this right and in terms of assigning credit to politicians and presidents are not going to tread on to that territory too much Suzanne. Sorry. I'm getting a call card. If I think I'm getting a call. When will note that the higher minimum wages of the past decade or so came from state and local officials. Not anyone in the federal government. We just overall had been climbing faster throughout the second term of the Obama presidency and into the first couple of years of the Trump presidency before wage growth started kind of level off last year did the labor market improved under their watch and since we can already hear the Furious keystrokes for listeners sending us nasty emails, cuz it's an election year. We're just going to get the hell out of here we intend to show

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It's over it's done. I'm closing the door PR. ORD. It's Kai Ryssdal and marketplace.org was produced by the indicators and it by Patty Hearst and it is a production of NPR.
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