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Jeremy Owens: Hello, and welcome to On Watch by MarketWatch. I'm Jeremy Owens. Today, we wrap up our summer reading series with Kyla Scanlon, an author and economic educator who has rounded up her knowledge into a new book. While her work covers a wide variety of topics, she told us about one economic problem that touches her the most, housing. For more on that, stay tuned. Then we check in with MarketWatch's new Help My Career columnist about the uneven job market that exists today and how she can help. Plus, we'll take a quick look at the news stories we're watching right now and how they'll affect your wallet. First, let's talk with Kyla Scanlon. If the name Kyla Scanlon doesn't ring a bell, her ideas probably will. Maybe you've heard of the vibecession, a term she coined to describe this economic moment or seen her video is on social media. Kyla has made a career out of explaining the economy and how it relates to the current moment, and now she's put all of that into one book. It's called In This Economy? How Money and Markets Really Work. We talked about the book and what she found most important while writing it. I will start with in this economy? Is that the best way to say it, Kyla?

Kyla Scanlon: Yes. Yes.

Jeremy Owens: This is a great reference book, Kyla. It's a textbook that's written in direct language. It would be perfect for people to listen to this podcast regularly. We try to give listeners a basis to understand what's going on in the market and how it affects them. You do the same, and this book is a reference book for that. I imagine this is also a way for your audience to have this reference to go back to when you talk about certain topics, right?

Kyla Scanlon: So most of my content, so I make social media videos across Twitter, TikTok, Instagram, LinkedIn, and I primarily respond to the news. I try to make educational foundational content as much as I can, but because the news is so fast moving, I was like, "It'd be really great if there was a static place that people could go to learn about the economy," because when you're making videos on social media, you're fighting against the rest of the world, the most interesting things in the world, and you're like, "What about the economy?" I really think it's important that people understand an economic foundation. Everything that we do is an economic transaction. If you buy a cup of coffee, if you buy a new car, if you try to buy a house, if you work at a job, you're all a part of the economy. So the book is written for my audience as well as anyone who wants to understand how the economy works.

Jeremy Owens: Right, and how it affects you and what's happening around you, and it's fascinating to write it in this time. We're living in a weird economy, and I feel like that first chapter you wrote about the vibe economy is really you putting your stamp on what you feel is happening right now. I know when I brought up Kyla Scanlon in the MarketWatch news meeting, the response is, "Oh, the vibecession woman," because you're credited with coining that and talking a lot about the vibecession. Can you talk about what the vibe economy is and how you're setting that up?

Kyla Scanlon: Yeah, so the vibecession was a concept that I came up with about two years ago in 2022. It was during this time where inflation was improving, GDP was going up, the labor market was still relatively okay, but people felt really, really bad. So this was meant to describe that. Why is there this disconnect between consumer sentiment and economic data? The word can sometimes get lost in people just being like, "Oh, you're saying that people are just feeling bad for no reason, but really, it's people are feeling bad because of structural affordability. Elder care is $10,000 a month. Child care costs are up 32% since 2019, student loan debt, housing crisis." So the vibecession is meant to point out that there is more of a gap between economic performance and consumer sentiment than we would expect considering where the economy is at. But it is for good reasons, and it is important that we consider the quote, unquote, "vibes" of people when we talk about the economy, when we develop economic policy because vibes are inherently expectations. They're animal spirits, they're Keynesian, they're George Soros and reflexivity, how people feel really, really matters. The vibecession was just meant to highlight that and the vibe economy as well.

Jeremy Owens: You definitely point out that this is not a new economic thought, that back to Keynes and others, people have been trying to figure out why there is that disconnect between what we see from the larger economy and what people are feeling on the ground. This is building off of things that people have been talking about for many years.

Kyla Scanlon: Yes, exactly. Yeah, it's just new terminology. But I think the general idea that Keynes came up with, which Soros came up with that I've tried to highlight as well, is that people matter. Humans are the economy. People are the economy. When we think about how they interact with the economy, how they vote, how they think about economic policy, the consumption decisions that they make, those all really matter. But yes, that's why I wrote about that thought and why the beginning chapter of the book is about that because it's meant to be human-centric economic analysis.

Jeremy Owens: Right. So if you're in the bookstore thinking about buying the book, just flip through that first chapter. It'll really tell you where you're headed with the book. The meat of the book is explaining how things work, and the bread, that first chapter with your experience of the vibe economy. Then the end gets to what you think the problems in the economy are and how to solve them. I really have to say that last chapter about how to solve them got to me and made me think that you're thinking about moving past media and trying to affect these problems in a politics or policy way. Are you going to try to address those problems at some point or are you going to stay in media and keep pointing them out?

Kyla Scanlon: The reason I included those policy solutions at the end is because I've found it's very easy to talk about problems. It's much harder to talk about solutions, and so that's why I included those components at the end of the book. I'm extremely passionate about housing and very passionate about bike lanes. So doing work around those two things could potentially be part of the future, but for right now, it really is just helping people understand the economy as much as I can.

Jeremy Owens: Yeah, it's interesting that you bring up housing is the one you're most passionate about. We've talked a lot on this show about the housing trap where with rising interest rates, a lot of people in starter homes, which is me. I'm a family of four and a starter home here in the Bay Area. Normally, I would be looking to sell this house and move up, get a slightly larger house, but there's no way I'm leaving my sub-3% interest rate.

Kyla Scanlon: I'm 26, and the idea of ever honing a home is quite far away as it is for many people in my age group. The Biden Administration has proposed giving tax credits to people, so they sell their first starter home and free up that space. But the fundamental issue with housing is that we just haven't built enough. The supply and demand misbalance is quite gnarly. People are living longer too, which is good in some aspects, but that means that they're not going to move out of their house as fast.

Jeremy Owens: Right, and living independently longer. Right now, with the millennials against the boomers who won't move out of their houses, it does seem to be the base of that disagreement right now.

Kyla Scanlon: Yeah. It gets down to the demographics, and there's been a lot of articles written on this. The baby boomers are a very large generation, and so every age that they've been at, policy has been passed to placate them, because they've been in office. So when they were going to college, college education, got all sorts of subsidies. When they were in the workforce, that helped a lot. Now that they're retired, there's a lot of policies being passed to support that. There's a lot of tax incentives through people to stay in their homes. So you have this generation that, rightly so, has designed policy around themselves, but unfortunately comes at the cost of those younger than them. It's hard to build homes, and that's what we have to do. What's really funny about the housing situation, not funny, funny like ha-ha, but funny tough is that the Federal Reserve has been raising interest rates in order to battle inflation, but that's made it more expensive to finance building a home. So the Federal Reserve's monetary policy actions have actually been counterintuitive to fighting the housing crisis. So we're in this really odd spot where most of the inflation that we're still experiencing is being driven by housing mostly because of lagged metrics. But it's also because we just need to build more, but rates are so high that people aren't building perhaps at the pace that they would if rates were lower.

Jeremy Owens: That's really a problem where we're backed up. Obviously, living in the Bay Area, we're probably the most backed up of any region 'cause we just had so many people move here over the last 15 years, and it's so hard to build in this area. It's like that in a lot of major cities. I know you also talked about zoning as a big thing that we could look at, the multi-use zoning versus single use zoning and making sure, this is something we've talked about for a long time, transit-oriented development. There are ways to do this, but this is a problem on the local level a lot of places. There's very little of the federal government can do to really juice housing.

Kyla Scanlon: There is some stuff that the federal government can do. Janet Yellen actually announced some policies out of the Treasury, and they've expanded the Low-Income Tax Credit to help build more affordable housing, but really it does bowl down to what the local governments can do. The federal government has allocated $35 billion to convert commercial into residential properties, but that hasn't really worked because of the approval process being so strenuous and being so many layers of bureaucracy and approval that it's made it hard for people to actually get that through. There are aspects of federal government involved, but then on the local level it is zoning. Zoning is sidewalk space, how far things need to sit back from the sidewalk. Mixed-use zoning, as you said, is one solution that people are proposing where it's like you can have a commercial property on the bottom and then build residential on top of that, but we also have the missing middle in housing. We don't have enough duplexes or triplexes or town homes that would also serve maybe as an in-between starter home for people as they perhaps move into that single family home later in life. The reason that I am so passionate about housing is because it's the American dream. When you talk to people about their perception of the economy, most of the time, it's about their personal housing experience. Right now, it's also about inflation and the cost of groceries and perhaps if they lost their job, but it really is housing at the end of the day.

Jeremy Owens: You talk about how the fact that the American dream really is built on housing, and you have problems with that system, it seems that that's the way that we're supposed to live.

Kyla Scanlon: Yeah, I do have problems with that system. Derek Thompson, who I think is just a brilliant writer at The Atlantic, he's written about this too, this really tough push and pull between housing and what it's meant to be for us. Is it this speculative investment or is it a place where we raise our families? Can it be both of those things? There's this chart from the Federal Reserve that I won't shut up about because I think it's so important because it shows that the bottom 50%, all of their wealth is tied up into housing. The top 10%, their wealth is in stocks and business ownership. So when we talk about building wealth, the answer is right there. It's not housing. It is, how do we help people get into the stock market? How do we help educate them about the stock market? How do we expand business ownership opportunities, whether that be through employee stock option programs or encouraging more small business loans? Wealth can't be around housing because it's so speculative, and it creates these really pathways where we get into Nimbias. I'm not in my backyard where people are like, "I want to retire with my home worth $1 million, and I don't care if nobody else around me can afford a home." It would be great if the American dream wasn't predicated on housing. I really think getting people exposure to the stock market, having them have baby bonds, bringing back anything that helps people invest in the actual American reality, which is for better or for worse, the American stock market would be a great first step. I also think that whether that be opening a small business, having businesses dole out employee stock option programs a little bit more, I would love to see some diversification for people just so they can protect their financial futures a little bit better.

Jeremy Owens: Well, if you want more interesting thoughts about the economy that include more on building out that financial future for yourself, you can check out In This Economy? How Money and Markets Really Work by Kyla Scanlon. Kyla, thank you so much for joining us.

Kyla Scanlon: Thanks for having me.

Jeremy Owens: We're going to take a quick break. Coming up, Help My Career with Hannah Erin Lang, stay with us. Welcome back to On Watch by MarketWatch. Before the break, we spoke with Kyla Scanlon about housing and our economy. Now we welcome Hannah Erin Lang to tell you how you can change your career. Hannah is taking over our Help My Career column at MarketWatch, which answers your questions about jobs, the office and the workplace. The May Jobs Report showed continuing low unemployment, but fewer businesses actually hiring, and workers looking for jobs are feeling frustrated that the process is not as easy as the strong labor market would suggest. We asked Hannah to join us to outline what the current job market looks like and how to navigate it. Well, Hannah, you have just started the Help My Career column at MarketWatch, helping people with the job market, and we're in one of the strongest job markets we've really seen. We have very low unemployment right now. We're adding jobs left and right. We had a huge month in May, but that doesn't mean it's easy, especially for those graduating right now. The new graduates are about to be out in the job market looking for a job. What are they going to face?

Hannah Erin Lang: Like you mentioned, we've seen really strong headline jobs numbers, and overall, the job market looks pretty healthy. I think this is a market that economists are really pleased with, but it doesn't necessarily mean it's easy on the ground for those looking for a job. I would say that a lot of the weakness we've seen in the job market has been in that white collar sector, traditional office jobs. So a lot of those really attractive industries that recent college grads are often trying to break into, tech, finance, other roles in the corporate space, those firms have really slowed their hiring a lot over the last few years. Jobs are not necessarily impossible to come by, but it is certainly more difficult to get that cushy corporate job than it was, say, two or three years ago.

Jeremy Owens: Yeah, because still fighting against the mid-career people who have struggled to move up and are still in rather entry-level positions, the type of jobs that you usually get as a high school grad instead of as a college grad.

Hannah Erin Lang: Yeah, absolutely. A lot of the jobs growth over the past several months has been concentrated in just three sectors: healthcare, government, leisure and hospitality. Of course, that leisure and hospitality sector, you've got a lot of lower-paying positions in that field or positions that folks with a college degree are not necessarily hoping for or looking to fill because of their investment in their degrees. That's something that I'm hearing across the spectrum too, from entry-level to senior job seekers that it's just a lot more competitive these days. If you're fighting for a white collar position, things just feel tricky.

Jeremy Owens: Hannah, that's why this job market is so confusing to me. Usually, when we see this low level of unemployment for a long time, it is a buyer's market, so to speak, from an employee's perspective. But that doesn't seem to be how those in the market feel it is right now.

Hannah Erin Lang: Yeah, it's interesting, and it's something I've really tried to get to the bottom of in my reporting over the past couple of months. I think it's really similar to what we're seeing happening in the broader economy right now where the data is really good, but it doesn't necessarily feel that way to everybody. I've heard from folks who say that they really... you can sense in the application or interview process that employers know that they now have the upper hand, which can feel pretty jarring to job candidates, especially because just a couple of years ago, we were in this really historic place of applicants and candidates having so much more leverage in negotiating their pay and finding new positions. So yeah, the transition has been really stark, and it's even more whiplashes generated by the fact that it doesn't necessarily match the data that we see.

Jeremy Owens: Talk to me about that, switching jobs. Do you have advice for people who are looking to find a new job right now and are struggling to get past the interview, get into new jobs and what they should be looking for?

Hannah Erin Lang: Yeah, yeah, absolutely. So The Wall Street Journal had a really good article on this recently about how finding a new role has once again become about who and your professional network. One could argue that's always been important, but I think that's really been highlighted over the past several months as we've seen the competition ramp up in that space. Particularly with the rapid prevalence of generative AI and how folks are using that to help craft their applications, send out dozens or even hundreds of applications sometimes, I think that's really overwhelmed recruiters and hiring managers.

Jeremy Owens: Who are using AI on their side as well, this is the battle of the bots. The employees are using AI to generate a lot of applications. The employers are using AI to screen out a bunch of applications, and it's hard to break through that right now.

Hannah Erin Lang: Yeah, exactly. I think that it's really shaped the job interview process, and I think that the methodology of job applicants has shifted a little bit as well where it's almost become a quantity over quality case in some circumstances where you're just sending out so many applications without necessarily focusing on a particular role. I think that's where this professional network and personal connection can really come in handy. It feels like such a cliche, but we've just seen that time and time again, that can really be the determinant in whether or not you can get your foot in the door in a particular industry or company.

Jeremy Owens: You have written a little bit recently about entry-level job seekers and what they're facing. A couple of things you really pointed out, and not just for entry-level but all job hunters is that some companies are going to make you do the work for free to prove that you can do it. How should people look at that when people ask you to do extra work to prove that you're worthy of that position?

Hannah Erin Lang: So this is something that I reported on recently, and I guess the best way to summarize it would be homework assignments that job candidates are being handed during the interview process. So I spoke to several of them who said that, yeah, they're having to fulfill a lot of requests for, quote, unquote, "free work," as part of the process to be considered even for a role.

Jeremy Owens: It can feel exploitative. I know I have applied for jobs in the past where they've asked me to write up a whole plan for editorial, and it feels like I'm handing over something that even if you don't hire me, now you've gotten something out of me for free.

Hannah Erin Lang: Yeah, the intellectual property element is a huge concern for job seekers, especially those who have climbed the ranks of their chosen profession and who feel that this is work that they could be charging a fee for as a consultant, or this is work that they could be profiting from as a freelancer. So yeah, that's a huge concern of job seekers as well, but I think it's reflective of the environment that we're in, that several of those that I talked to brought up the fact that in this market, it's really hard to say no. You feel like you don't have a lot of leverage, so it becomes challenging to not oblige to those types of requests regardless of your concerns.

Jeremy Owens: There's more challenges beyond that, especially for those fresh out of school looking for their first job. You wrote recently about entry-level jobs that now require three years of experience. Well, how are entry-level workers supposed to get those three years of experience if they can't get the entry-level jobs?

Hannah Erin Lang: This has a lot to do with how companies are thinking about how they're training their employees. Several decades ago, internal development programs that helped workers grow from entry-level jobs up through the ranks of a particular singular firm were a lot more of the norm. That has really shifted over many years so that now the approach is a lot more of companies focusing on hiring employees from other companies or finding talent that has been developed elsewhere. This idea of employers wanting to hire folks with three years experience but not necessarily want to give them three years experience, that's a trend that's been forming for a while now. That's why you've heard your grandparents or older relatives talk about a career built at one singular company. That might not feel relevant to you and your career trajectory as a young person, and that totally makes sense when we look at the grand scheme of things. In terms of needing to get experience to get experience, it feels very much like a chicken and the egg situation. But I think that anything that resembles experience, this is something that is most useful to focus on when you're still in school as a college student. But volunteer experience, internships, any responsibilities that you can take on in a part-time job or anything like that looks like what you might want to do in a professional capacity one day, that's the way to get around this. But even as I'm saying that, that's really hard to accomplish, especially when you're a student who might have a lot of different things on their plate or might not even know how to get that first internship. So yeah, I think this is a real challenge, and I just have a lot of empathy for the young job seekers out there. This is a challenging environment.

Jeremy Owens: Look, we've spoken generally here, but everyone is dealing with their specific situations in the workplace, and that's why we have the Help My Career column to answer your specific questions. Hannah, how can listeners get in touch with you if they do have those questions?

Hannah Erin Lang: Yeah, absolutely. So Hannah Erin Lang on Twitter and on LinkedIn, you can message me on those platforms via DM. My DMs are open. We also have an email address readerstories@marketwatch.com. That's for the General Personal Finance desk, a great way to get in touch with our team of reporters there as well.

Jeremy Owens: Great. Thank you so much for joining us, Hannah, and we'll talk to you again soon.

Hannah Erin Lang: Thank you so much.

Jeremy Owens: Before we go, it's time for what we are watching, a look at the news you need to know for the rest of the week and beyond. Home prices hit a record high again in April according to the latest Case-Shiller Housing Price Index. There was some slightly better news in Tuesday's report, though. The rate of price growth slowed down. Prices did increase in all 20 cities studied, though, with the fastest rate of growth in San Diego where houses increased 10.3% from last year. Record home prices are expected to continue as higher mortgage rates discourage owners from selling, and that keeps volume low. The latest inflation reading that's expected on Friday, the Personal Consumption Expenditures Index, or PCE, is expected to show prices increasing 2.6% from last year. That would still be higher than the Federal Reserve's target of 2% for inflation. If the number comes in higher or lower than the target, watch for stocks to swing on the last day of the quarter as it could affect the Fed's decision-making at their July meeting. As we near the end of the first half of the year, the S&P 500 is on pace to add more than $5.5 trillion of market cap, which would be the biggest first half gain on record. The index is also headed for its best start to an election year since 1976. The S&P 500 has gained more than 14% in the first six months of 2024, and usually in election years, uncertainty can calm trading activity. The average first half gain in an election year is 0.6% according to Dow Jones market data. But what does all that mean for the second half of the year? We'll talk more about that next week. That's it for this episode. Thanks to Kyla Scanlon and Hannah Erin Lang. To keep following the latest on the economy and careers, head to marketwatch.com. You can subscribe to the show wherever you get your podcasts, and please do. If you like what you heard, please leave us a rating or review. It really helps others discover the show, and let us know what you want to hear from us. You can reach us at onwatch@marketwatch.com. The show is hosted by me, Jeremy Owens, and produced by Alexis Moore and Jackson Cantrell. Isaac Gaines mixed this episode. Melissa Haggerty is the executive producer. We'll be back next week with a new episode, and until then, we'll be watching.