Swipe down through the menagerie of dancing videos and cat compilations on TikTok, and you might find one of the latest trends gripping the app — economic depression.
Numerous TikTok creators have theorized that the United States is experiencing a "silent depression" — a period of economic contraction that is at least as severe as the Great Depression, leading many Americans to bemoan their diminished well-being and spending power.
Economists, however, are not convinced; a depression requires a prolonged period of recession, or multiple quarters of economic contraction. Despite some economists predicting that the country would slide into a recession over the course of 2023, U.S. growth indicators have remained strong, according to Brett House, Professor of Professional Practice at Columbia Business School.
House spoke with us earlier this month to shed light on why the conversation and content surrounding the silent depression trend don’t quite get it right, but that Americans have a legitimate reason to feel uneasy in their economic standing.
“The American economy is not in a silent depression. It’s not even in a depression at all,” House said. “When we came into 2023, many economists thought we might slide into a recession over the course of the year, but growth in goods and services and in trade have all remained far stronger than we anticipated.”
While a silent depression doesn’t exist in traditional economic nomenclature, TikTok creators regularly receive hundreds of thousands and even millions of views on videos referencing the term. Simply put, it’s the idea that the U.S. is currently suffering from an extended period of slow economic growth that no one is talking about.
TikToks referencing the trend often compare the cost of common goods and services — housing, vehicles, etc. — in 2024 to that of the 1930s. Creators also highlight the high cost of these goods relative to average U.S. income. While costs have increased across the board, so has the quality of goods, and real wages have increased over the last three quarters for the first time in several years, according to House.
But just because wages and the quality of goods and services are increasing does not mean the American economy is working for everyone.
“Some TikTokers are pointing out that as a share of average income, the cost of buying a car, rent, or buying a house are all much larger than they were in the 1930s,” House said.
He added that comparing current costs with those of the 1930s is useful, as it gives Americans a sense of how the cost of living has evolved in relation to their average income, but the quality of modern goods and services in relation to cost can't be overstated.
“It's ultimately an unsatisfying comparison because that car that you can buy now is far more sophisticated than the one you could buy in the 1930s. The house that you can buy now on average is going to be nearly twice the size that it was in the 1930s,” House said.
The comparison becomes more challenging to make when considering differences in generations. Millennials and Generation Z Americans are materially wealthier, more educated, and have more opportunities across socioeconomic classes when compared to their Generation X and baby boomer counterparts.
However, Gen Z and millennials are still taking on more debt and living at home for longer periods of time when compared to preceding generations, as finding affordable homes in U.S. cities becomes increasingly difficult, according to House.
“It's only in the last few quarters that wages have started growing faster than the cost of living. And the TikTok identification of the silent depression is picking up on that underlying trend and set of feelings amongst Americans,” House added.
“But if you're looking to TikTok for your economic news, bring a little skepticism and nuance to the viewing experience because understanding actual data and your own experience in it requires a little more context."
