SYLVIE DOUGLIS, BYLINE: NPR.
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ADRIAN MA, HOST:
This is THE INDICATOR FROM PLANET MONEY. I'm Adrian Ma.
WAILIN WONG, HOST:
I'm Wailin Wong. And this is indicators of the week.
MA: And today we're joined by our colleague from Planet Money, Amanda Aronczyk.
AMANDA ARONCZYK, BYLINE: Hey, always good to see you guys.
WONG: Nice to see you, Amanda.
MA: This week we're going to kick things off by looking at indicators from a couple new, really interesting surveys - one from America's CEOs on where they think the economy is headed this year.
ARONCZYK: And then a survey from rural America where it appears there is significant support for the government to pitch in because those communities are facing some pretty big economic challenges.
WONG: Plus, a new report that offers more evidence that the tax man...
ARONCZYK: Or tax person.
WONG: ...Or tax person, is targeting low-income workers when it comes to audits. All of that after the break.
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MA: My indicator is 98%. Anyone want to guess what 98% is?
ARONCZYK: You're bragging about how you did in high school?
MA: No, you're definitely going to have - that would - number would be a lot lower. So this number comes from a survey of CEOs from around the world conducted by a consulting firm called EY, also known as Ernst & Young. And what it did is asked 1,200 CEOs of various-sized companies from various industries whether they think there's going to be a economic downturn this year. And what 98% of these CEOs said was, yes, they think there's going to be a recession this year. And if you look just at the U.S.-based companies, that number was even a little bit higher. It was 99%.
WONG: Oh, that's basically everyone then. It's, like, 99 is 100.
ARONCZYK: I am shocked. Where are the soft-landing people? I can't believe that they're all predicting a recession. OK, fine.
MA: They're all in the bunkers right now.
ARONCZYK: So when they say recession, what do they mean?
MA: So there is some more detail in the survey, which kind of breaks down how bad these CEOs think a downturn would be. Like, a little less than half of them say that they think it'll be kind of mild, but a little more than half actually say they think it's going to be pretty bad. And, in fact, they think it could be worse than the financial crisis that took place in the late 2000s. And partly that is because right now they're worried about supply chain disruptions and the war in Ukraine and China's problems with COVID right now, and also things like trying to find enough workers. They think that's going to be an ongoing problem, too.
WONG: It's interesting because, you know, a little bit of a slowdown would help with the inflation problem that's going on around the world. But then, you know, to your point about the soft landing that the Fed wants, it's like, no one wants a full-on, big recession. You want just enough of a slowdown.
MA: Yeah, exactly. So basically what this survey does is add a couple of more pixels to the picture of corporate sentiment right now, which is looking kind of blue, right? There have been CEOs publicly saying they think a recession's coming. And another survey recently, actually, that was done by the Business Roundtable, which is this lobbying group, they say that CEOs are expecting slower sales in the next several months, and they're actually pulling back on hiring and investments, too. So it seems like they're also bracing for some sort of impact.
WONG: Well, that is bleak.
MA: So cheers, everyone. 2023 is getting off to a great start.
ARONCZYK: If the indicators are supposed to be very positive, then I didn't get the memo.
ARONCZYK: Mine is also a little bleak.
WONG: All right. Well, we're already in that mindset, so let's hear what you have, Amanda (laughter).
ARONCZYK: OK, so these concerns over recession seem to be something that people in rural America are thinking about. Specifically, people are worried about being able to afford some of their basic needs. My indicator of the week, 70%, this is from a bipartisan poll of rural and small-town voters in the U.S. who were asked about the challenges that they are facing. And the poll is conducted by this international group Save the Children, and they end up focusing on things that impact kids, you know, child care and also hunger.
WONG: So what did the 70% say?
ARONCZYK: So before I get to my 70%, there's a little caveat, which is that these findings were actually released at the end of 2022. But, you know, there was holidays, and there was New Year's. And so my definition of week in indicator of the week - little fast, little loose. But let me get to my 70%. Here we go. So 70% is the percentage of rural voters who say that affordable child care is essential or very important to the economy. Another 25% say that it is somewhat important.
WONG: Well, I'm not a rural voter, but I would be in that 70%.
ARONCZYK: Yes, I think that people with kids understand that affordable child care is important and also kind of, in this country, a little bit of an oxymoron, right? It is very hard to find good quality, affordable child care. And more than half of the respondents to the survey say that that has gotten even worse since the pandemic.
WONG: Well, I believe it. There was a bunch of daycares that closed during the pandemic, right? And this is an industry where people are very low paid. So there's just not a lot of incentive to be opening new daycares.
ARONCZYK: Right. There's a lot of incentive to leave. And so people are really feeling that in rural America. I have one more number. This one is kind of staggering. Seventy-seven percent of parents who were surveyed said they are worried they might not be able to afford enough food to feed their kids this year.
WONG: Well, on THE INDICATOR, we did stories about, you know, the child tax credit and about the expansion of universal free lunches in public schools and how that all got rolled back over the last couple of years. And so feel like these are the consequences now - right? - that people are feeling extremely worried about how they're going to support their families.
ARONCZYK: Yes. And here I do actually have a little, tiny silver lining around the story, which is that the survey found that regardless of political party, rural voters were pretty supportive of these policy ideas that the surveyors asked them about. So surveyor would say, like, what do you think about, you know, if it was easier for a stall at the farmer's market to take food benefits? And most people said yes. And what about if it was easier to qualify for food benefits if you qualified for Medicaid? People were like, that sounds great. So these ideas presumably require more government involvement and more government spending. And there was a bipartisan sense that didn't matter what party you were in, that might be a good idea.
MA: Though, you know, support for a food program and support for funding a food program are two different things and, you know, might be kind of a hard sell in the current Congress. But, you know, cross-party agreement on the principle, that is a tiny silver lining, right? Thank you, Amanda. And, Wailin, what do you got for us?
WONG: Well, I'm afraid I have some more bad news...
WONG: ...For folks who have limited incomes. So my indicator is about taxes - everyone's favorite topic. So generally, the higher your income, the greater the odds you'll get audited by the IRS. And there's one really big caveat to this. The lowest earners actually have very high audit rates. So it's like the people at the very top and the very bottom get audited the most. And this issue of low-earning people getting extra scrutiny is well documented, but it's not getting any better. And that brings me to my indicator. It is 5 1/2. According to a new report by Syracuse University, in 2022, the lowest income wage earners were audited at a rate 5 1/2 times higher than everyone else.
MA: Oof (ph).
WONG: These taxpayers made under $25,000 a year and had claimed something called the Earned Income Tax Credit, which is a federal tax credit for low-income workers.
ARONCZYK: Yeah, right. So they're getting federal supports, but they are also getting audited more.
WONG: Exactly. And these things are not unrelated. The IRS says a lot of people claim this tax credit in error, not because they're trying to, like, defraud the government but because there is confusion around the rules of who's supposed to get it and not. So the IRS wants to make sure, you know, everyone's on the up-and-up. But it's resulted in very high audit rates for a group of people who have the least amount of resources to deal with the IRS. You know, whether that's, like, you get some jargony letter in the mail, and you're trying to work through it, or you're calling a 1-800 number and trying to get someone on the phone.
MA: So you could just call up the IRS? Like, I thought the problem with the IRS was, like, they don't even have enough people working there to do all this stuff.
WONG: You are correct. And the Inflation Reduction Act from last year includes $80 billion to hire more people for the IRS because they're so understaffed. And they also need to update their technology. And, you know, there's this ongoing debate about how IRS resources should be spent. Like, should the government be trying to crack down on errors with this tax credit for low-income earners or should it go after bigger fish, like maybe higher-income earners who are actually, like, deliberately cheating on their taxes? And, you know, on a side note, just this week, House Republicans voted to cut that funding, that $80 billion, but it doesn't look like it'll pass the Senate.
MA: This episode of THE INDICATOR was produced by Corey Bridges with engineering by Maggie Luthar. It was fact-checked by Sierra Juarez. Viet Le is our senior producer. Kate Concannon edits the show. And THE INDICATOR is a production of NPR.
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