October's Beigie Awards: higher wages, supply chain disruption, survivor bias : Planet Money : The Indicator from Planet Money The Beigies are here again! October's Beige Book entries captured the seismic shift in the way we live during the pandemic, and things got a little emotional.

Tangled up and beige: The Beigies are back!

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Welcome to the Beigie Awards. I'm your host, Stacey Vanek Smith.


And I'm the official sidekick, Robert Smith. And it is our favorite time of year. And I'm not talking about autumn in New York with all the leaves changing colors.

VANEK SMITH: No, Robert. Fall colors are great in everything, but here at THE INDICATOR, we only have eyes for beige.

SMITH: Yes, that magical bi-quarterly moment when the Beige Book drops.

VANEK SMITH: And we celebrate the 12 regional Federal Reserve banks coming together with anecdotes from business owners and heads of industry in their regions.

SMITH: And the October Beige Book was full of intrigue.

VANEK SMITH: It really was. And I'm going to be honest, Robert, this one gets a little emotional.

SMITH: Turned our Beige Book blue, you might say

VANEK SMITH: Yes, you might. We'll be right back with the highlights and finalists from the October Beige Book and, of course, the winner after a few words from our sponsor.


VANEK SMITH: So, Robert Smith, let's get right to it, this very colorful Beige Book. I mean, we saw it all - wages skyrocketing, companies desperate for workers.

SMITH: And in one moment of Beige Book beauty, the Federal Reserve Bank of St. Louis talked about how at least one company is dealing with a shortage of workers. Quote, "one large retailer planned to raffle off a car to seasonal employees with good attendance."

VANEK SMITH: You know, Robert, I would like to point out that I have excellent attendance.

SMITH: You do, but you work at home. You work at home.


VANEK SMITH: I know. And I show up here every day. Where's my car?

SMITH: We'll work on that.

VANEK SMITH: The San Francisco Fed in another one of our favorite Beige Book moments. And I have to say, Robert, they really bring it all the time. I feel like San Francisco, they have not won yet. They're like the Susan Lucci of the Beige Books right now.

SMITH: (Laughter) Well, they do go last in the Beige Book, and that may be an issue for them.

VANEK SMITH: That's true. We need to read it backwards next time, maybe. San Francisco, we love you. And this line really blew us away, and it is here, quote, "wage growth climbed further due to intensified competition for talent and workers' willingness to switch jobs, with one contact from the banking sector characterizing it as a wage war." A wage war - I mean, that is - that's Beige Book poetry, Robert. That is Beige Book poetry. And really, we saw salaries all over the country rising by as much as 15%, 20%.

SMITH: Yeah. And we also saw a lot of waiting around in this Beige Book, lots of plans to go back to the office or to reopen for business, then thwarted by the delta variant. And, of course, companies waiting on supplies or parts or workers. All of that continued to cause delays across the economy.

VANEK SMITH: But the winning Beige Book entry? It was really one for the books. It struck actually a very emotional chord. This Beige Book entry talked a lot about how businesses have been closing in this district. A lot of entrepreneurs taking early retirement, selling their companies or even just throwing in the towel. And here was the paragraph that clinched it - quote, "a dry cleaner closed on the expectation that demand would not return. A bar owner was worried because fewer people were staying between 10 p.m. and closing, a period that previously provided a healthy percentage of its profits."

SMITH: It was a little gut-wrenching, and so we've decided to give the Beigie to a work of exquisite drama written by the Federal Reserve Bank of Philadelphia.


VANEK SMITH: Philadelphia, congratulations.

PAUL FLORA: Yes, thank you, Stacey. We're honored to be here.

SMITH: Accepting the award this month is Paul Flora, who, by the way, accepted the very first ever Beigie Award back in 2018.

VANEK SMITH: And we spoke with Paul a couple weeks ago.

FLORA: I have written the Beige Book 78 times over about a 10-year period.

SMITH: Paul says he loves the Beige Book, but says it sometimes doesn't get the respect it's due.

DOUGLIS: It's been criticized and I think incorrectly - it's funny - right? - to call it the ask-your-uncle approach.

VANEK SMITH: (Laughter) Really, the ask-your-uncle approach to economics?

SMITH: Uncle Philly. That's who they researched.

VANEK SMITH: Uncle Philly. I mean, what if your uncle is, like, an award-winning economist?

SMITH: Exactly. Then it makes sense to ask your uncle.

VANEK SMITH: Ask your really smart uncle. But what we loved about Philadelphia's Beige Book entry was that it pointed to a shift - not necessarily an economic shift, but a shift in the way we live.

SMITH: Yeah. You know, the dry cleaner, obviously, a lot of their business was people dressing up for work, you know, button-down shirts, ties, suits, dresses. And honestly, even when we go back to the office, we're not going to be wearing those clothes anymore.


SMITH: We're going to be wearing T-shirts.

VANEK SMITH: Athleisure all the way. All the way athleisure, yeah.

SMITH: And because we're not dressed well, we're probably not going to go out late for drinks anymore. We'll be doing less of that.

VANEK SMITH: Yeah. And, I mean, maybe a lot less. So Paul points out that the fact that this one bar that he talked to is seeing fewer people after 10 p.m. - I mean, obviously, it's not great for that one bar, but it also points to a potentially much larger economic problem.

FLORA: Another thing to keep in mind is that all of these trends are underlain by a potential for survivor bias. So if we're seeing a bar, for example, describing their activity is that, you know, it's a little bit less than it was, they can't stay open as late, that suggests that the downturn in overall activity is even greater because some bars didn't reopen.

VANEK SMITH: They didn't make it.

FLORA: Right.

SMITH: Because a lot of bars have closed. The ones that are left, the survivors, should have more business than normal. The fact they have less means the trend of fewer people going to bars is more extreme than it looks.

FLORA: You know, without question, the pandemic has prompted people to alter their lifestyles. Sometimes it's as a coping mechanism. Sometimes it's just out of sheer fatigue and sometimes from soul-searching.

VANEK SMITH: I've never heard an economist say soul searching before. I'm kind of - I'm loving this. This is why I love the Beige Book, words like soul searching come up.

FLORA: It's nicer than saying we've all burned out and we're fatigued, but that's part of it. That, hopefully, we recover from eventually. But the soul-searching people may, you know, some people will, you know, depends on the form it takes. So it has been - it's been a very difficult time. And, you know, it's been hard as an economist to deal - to cope in a way. The...


FLORA: Oh, I either need to come back to that or not answer it. It's just that - I'll get too emotional.

SMITH: You know, we think of economists as people who just look at numbers and charts and graphs, but all through the pandemic, Paul was talking with real business owners every single week, chronicling the losses they felt, and not just economic losses, but emotional losses.

VANEK SMITH: Yeah. I mean, these were people all over his region. He'd been speaking with many of them for years and years. And a lot of them were losing their businesses, their jobs, their livelihoods - also, friends and family members.

FLORA: It was just totally - you know, I don't think I'd worked harder in my life. And...

VANEK SMITH: What kind of hours were you working?

FLORA: What I - whatever it takes. Didn't have time to burnout. That came - that comes later (laughter).

VANEK SMITH: Well, all of that tireless work has earned Paul and his team the October Beigie Award. And it's given us all a lot to think about, you know, this - little bit tangled up in beige.

SMITH: Congratulations, Paul. Congratulations everyone at the Philadelphia Fed for an amazing Beige Book entry. And really, we'd like to raise a glass to all of the Federal Reserve bankers around the country who are working so hard to gather this data.

VANEK SMITH: Stay beige, my friends.

SMITH: Thanks for joining us for the Beigie Awards. And have a good and very early night.

VANEK SMITH: Another trend we saw a lot of in the Beige Book - people quitting their jobs, a lot of them without having another job lined up. And if that is you, if you have recently quit your job, we would love to hear your story. Drop us a line - indicator@npr.org. Or you can tweet at us - @theindicator.

This episode of THE INDICATOR was produced by Brittany Cronin, with help from Isaac Rodrigues. It was fact-checked by Taylor Washington. Our senior producer is Viet Le. The show is edited by Kate Concannon. And THE INDICATOR is a production of NPR.

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