A blog about business and economics.

April 16 2015 6:05 PM

Which Workers Are the Most Depressed?

Gallup recently decided to rank the occupations in which workers are most likely to suffer from depression. The takeaway: Your boss is probably in a pretty decent psychological place. Managers, executives, and officials were the least likely to have ever been diagnosed with depression. The clerical and office staff who toil beneath them, on the other hand, were diagnosed at somewhat higher rates. Meanwhile, workers in manufacturing or service industries were the most likely to have ever been depressed. The drudgery of clocking in on an assembly line or at a cash register apparently takes a toll, just in case you were wondering.


Anyway, remember kids: Money buys happiness.  

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April 16 2015 3:42 PM

How the Bush Administration Pointlessly Screwed Over Student Borrowers

There has never really been a good reason to bar Americans from discharging their student loans in bankruptcy. Back in the 1970s, a spate of newspaper stories claimed that unscrupulous college kids and law school grads were borrowing money from the government without planning to pay it back, knowing that they could just go to court and weasel out of their debts before they had any real assets to lose in the bargain. But, unsurprisingly, the reporting turned out to be mostly anecdotal trash that was later debunked in a study commissioned by Congress.

Didn't matter. In 1978, Capitol Hill passed a bankruptcy reform bill that, for whatever reason, limited borrowers' ability to relieve their federal student loan obligations. Over time, lawmakers tightened the rules to make it even tougher.

A similar story more or less repeated itself during the Bush administration. Major private lenders claimed they needed Congress to stop their customers from filing opportunistic bankruptcies. Despite the notable lack of evidence that this was actually happening, lawmakers listened, and inserted a clause into the 2005 bankruptcy reform bill making private student loans nondischargeable unless someone could demonstrate they posed an "undue burden" on their finances—a vague standard which the courts have subsequently interpreted as an incredibly high bar.

So, was it worth it? Is there any sign, in retrospect, that the Bush bankruptcy bill needed to single out student debtors? According to a new working paper from economists at the Federal Reserve Bank of Philadelphia, no, there is not. The researchers looked at how bankruptcy rates for private student loan borrowers changed after the reform bill went into effect, then compared them with the bankruptcy patterns for federal student loan borrowers and debtors without any education loans, who should not have been affected by the new law. If private borrowers had been filing for Chapter 7 in order to wiggle away from their debts pre-2005, you would expect their bankruptcy rates to fall significantly faster than they did for those without student loans or people who borrowed from the feds. That didn't happen, as shown on the graph below.

"Although the 2005 bankruptcy reform appears to have reduced rates of bankruptcy overall, the provisions making private student loan debt nondischargeable do not appear to have reduced the bankruptcy filing or default behavior of private student loan borrowers relative to other types of borrowers at meaningful levels," the authors write. "Therefore, our analysis does not reveal debtor responses to the 2005 bankruptcy reform that would indicate widespread opportunistic behavior by private student loan borrowers before the policy change."

So the 2005 bankruptcy bill effectively made life a bit more miserable for hundreds of thousands of Americans in order to deal with an imaginary scourge. Worse yet, it may have encouraged the sort of risky private student lending that mirrored the subprime mortgage boom, with financial institutions shoveling debt at marginal students who were poorly positioned to ever pay it back but had no recourse in the bankruptcy courts.1 

Now, there is some academic evidence that meeting the "undue burden" necessary to discharge student loans might be somewhat easier than the media has projected, especially if you're unemployed or have a medical condition. Princeton University Ph.D. student Jason Iuliano has found that of all bankruptcy filers who have student debt, just 0.1 percent try to have it wiped out during the proceeding. But of those who do, almost 39 percent are successful. Of the more than 239,000 Americans with student debt who filed for bankruptcy in 2007, he believes there were about 69,000 who stood a decent chance of winning at least a partial discharge. More debtors need to at least give it a shot.

Still, discharge shouldn't take a special effort. The "undue burden" standard was unnecessary to start with. We'd all be better off scrapping the thing.

1Just to rant and rave about this at a little more length: In 2005, banks claimed that the nondischargeability rule was necessary to encourage more private student lending. But it is not at all clear that extra private student lending, especially to marginal students, is at all socially desirable. College students as a group are really bad borrowers. They default at high rates, in part because they often drop out of school. And while the federal government offers a number of forgiving loan-repayment programs that help troubled debtors, those protections are basically absent from the private sector. By eliminating dischargeability in bankruptcy, you're basically spurring banks to lend to high-risk individuals who have already maxed out their federal Stafford Loan limits (or, I should say, hopefully maxed them out, because there's no good reason for most students to pick a private lender over the federal government). I'm not sure who that's really helping.

April 15 2015 9:53 PM

Why It’s Absolutely Crazy That We Don’t Ask Millionaires to Pay More Taxes

This is just a stray, late-on-April 15 thought, but isn’t it kind of insane that we don’t ask millionaires to pay more in taxes? I mean, much, much more? Today, the top marginal income tax rate is 39.6 percent. Why not go to 50? Or higher? Some economists think we could go as high as almost 90 percent.  

Obviously, this is not a politically viable idea. We live during a time in which a supposedly serious presidential candidate can propose eliminating all taxes on capital gains or inheritances with a straight face, as if supporting the Hilton and Walton families were an existential national concern. Even undoing the Bush tax cuts for roughly the top 1 percent of households took a herculean political effort on the part of President Obama and Senate Democrats. But just from the perspective of rational self-interest, it seems goofy that, somehow, soaking the rich is barely part of the national policy conversation (the largely unheralded efforts of the Congressional Progressive Caucus aside). At some point, the federal government is going to need more revenue in order to support the social welfare programs that the vast majority of Americans know and love. Obviously, not all of that money can come from inside the top 0.5 percent. But at least some of it can.

And it’s not at all clear that steeping the wealthy, so to speak, would significantly slow down the economy. I mean, it could. Maybe. Researchers generally do think that a major tax hike would be a sap on growth. But it’s a more complicated issue than many assume. Theoretically, there are at least two big, opposing forces at play. On one side, you have the so-called substitution effect, the idea that people work less when the IRS snatches more of their paycheck, because each hour of labor suddenly earns them less money, making it more attractive to spend time finally learning guitar or crafting bird houses or otherwise chasing their Zen. On the other side, you have the “income effect”—the idea that when taxes go up, some people might actually work harder and longer in order to maintain their standard of living.

Which is stronger? When the Congressional Budget Office reviewed the literature a few years back, it concluded that substitution effects were a little more powerful, and that big-earners like doctors and executives didn’t act vastly different than the rest of us. Thus, we should expect higher tax rates to make the rich (and thus, the country) a bit less ambitious and productive as a whole. In theory.

In reality, however, it’s just not clear how strongly taxes influence the overall direction of the economy, given how many other factors are at play. As any mildly snarky liberal will remind you, the country seemed to do just fine in the Eisenhower era, when marginal income tax rates  topped out at a confiscatory 92 percent. It also fared pretty well after Bill Clinton raised rates to close the deficit in the early 1990s. If you’re looking for a slightly more formal source, when the Congressional Research Service looked at the issue in 2012, it found that there was no statistically significant correlation at all between top marginal tax rates and real GDP growth.1

A conservative will counter here that the astronomical tax rates of midcentury America were basically a fiction, or as commentators put it at the time, “a colossal illusion” riddled with loopholes. This is somewhat true. For one, capital gains taxes have always been significantly lower than the top rate on labor income, which gave well-to-do stock and bond owners an enormous break. One roughly contemporary analysis suggested that, in 1953, when top marginal rates were still hovering around all-time highs, households that earned more than $1 million were only really paying about 49 percent of their adjusted gross income in taxes. (That’s $1 million unadjusted for inflation, by the way. We’re talking the super-rich of the time.)

Still, the evidence suggests that America’s wealthiest faced a significantly higher tax burden during the country’s years of midcentury prosperity. Thomas Piketty and Emmanuel Saez, for instance, find that once corporate and estate taxes are added into the mix, the top 0.1 percent of earners paid 71.4 percent of their income to the IRS in 1960, compared with 34.7 percent in 2004. Reaching further back and using slightly different methodology, the Congressional Research Service finds that 0.1 percenters paid an average effective personal income tax rate of 55 percent in 1945, compared with around 25 percent during the late 2000s. The tax code really was more progressive back in the day—and more aggressive.

So, what would the ideal top marginal rate on the rich be now? That depends on your goals, and some of your beliefs about human behavior. But unless you’re philosophically opposed to government spending or the welfare state, chances are the magic number is quite a bit higher than today’s.

Let’s say your only interest is in maximizing the amount of revenue the Feds collect. Conservative guru Art Laffer became famous for pointing out that, at some point, raising taxes becomes counterproductive, because people either stop working or find ways to hide their income. Thankfully, we’re probably nowhere near that point. In their most recent work on the subject, co-authored with Harvard University’s Stefanie Stantcheva, Piketty and Saez conclude that governments would net the most money from a top marginal rate somewhere between 57 percent and 83 percent (that includes state taxes, too).* Why the range? The three researchers acknowledge that, when taxes go up, the rich seem to earn less on the job. If you think that’s entirely because they choose to work less, then 57 percent is your number. However, Piketty, Saez, and Stantcheva argue that lower taxes don’t seem to spur executives and other highly paid professionals to work harder so much as they encourage them to bargain harder for extra pay, whether it’s from their board of directors or their partners at a law firm. Negotiating a bigger paycheck for yourself doesn’t actually add anything to the economy. So, if you believe taxes simply discourage that kind of tough bargaining without making star workers much less productive, then 83 percent is your figure.

What if your goal isn’t just to maximize revenue? What if you want to maximize people’s standard of living by balancing taxes, spending, and economic growth? In a 2014 working paper exploring that question, economists Dirk Krueger of the University of Pennsylvania and Fabian Kindermann of the University of Bonn came up with an even larger number than Piketty and Saez. According to their model’s calculations, the bottom 99 percent of Americans would be best off if the top 1 percent paid an 89 percent top marginal rate. In their model, the high taxes do discourage top earners from working and lead to lower economic growth. But as a trade-off, the government can afford far more social spending (or more tax cuts) for the 99 percent, improving their overall welfare. As Krueger put it to me, “The total pie shrinks, but it produces more food for the poor and fewer for the rich—so to speak.”

Like Piketty & co.’s, Krueger and Kindermann’s paper is just a modeling exercise—and models, as rough mathematical approximations of reality, are both frequently wrong and subject to revision. But it should give us a sense of how much room we likely have to raise rates, should Washington ever want to. It also shows that if we have to trade a bit of economic growth for a bigger safety net or lighter tax burden on the working class—to exchange efficiency for equity, as economists might put it—the deal might well be worth it.

So, why did I start off talking about taxing millionaires, and not just 1 percenters? That comes back to Krueger’s paper as well. One of the dangers it notes is that, over time, high tax rates might not only discourage people from putting in extra hours at the office, but also change people’s long-term career and education decisions. If you’re looking at a 60 percent or 80 percent marginal tax rate once your household starts earning $391,000, that might make seven years of medical school or a law degree somewhat less appealing. Over time, dissuading people from pursuing advanced degrees or from entering the workforce at all if, say, a spouse makes a great deal of money, would probably begin to undermine the economy in some nasty ways. But while plenty of people go to grad school with the expectation of making mid–six figures, not that many sign up because they expect to make a million. Those who get lucky and do, well, they can afford to pay a bit more to Uncle Sam.

1 One notable empirical study by University of California–Berkeley economists David and Christina Romer did find that certain kinds of tax increases, such as those meant to deal with an old budget deficit, “are highly contractionary.” But some of their results have been challenged. Meanwhile, when Thomas Piketty, Emmanuel Saez, and Stephanie Stantcheva looked across developed countries, they found that cutting the top marginal tax rate didn’t seem to boost growth—though it did lead to greater income inequality growth

*Correction, April 16, 2015: This post originally misspelled the last names of economists Stefanie Stantcheva and Fabian Kindermann.  

April 15 2015 2:45 PM

This Tumblr Mocks Brands for All Those Annoying Requests to “Share Your Story”

You never forget your first #FlonaseStory. You know, your favorite childhood memory involving nasal spray.

Wait—are you saying brands don’t play an integral role in your personal story? That you don’t think back fondly on all the bleachable moments you’ve had over the years, thanks to Clorox, or that you don't have a Purina Cat Chow story inside you just begging to be heard? How sad for brands, and for you.

As the Tell Us Your Story Tumblr demonstrates, brands these days want to be a part of your story. They want you to write in, tweet, and engage with them, and then they want to repurpose your content into marketing that will engender further good feelings toward their products. Copywriter Brian Eden started the Tumblr to collect examples of brands getting caught in the act, our favorites of which we’ve posted below.

April 15 2015 1:04 PM

Forget Steak and Seafood: Here’s How Welfare Recipients Actually Spend Their Money

Red-state lawmakers have been on a rather unnecessary crusade lately to stop welfare and food stamp recipients from spending their government aid on luxuries like cruises and supermarket king crab legs. This has, thankfully, led to some discussion about how low-income families actually use their money—which is to say, not all that differently than the rest of us. (More of their budgets generally go to food, because people have to eat.)

This all reminded me of one of my favorite graphs on this subject. In 2013, Ann Foster and William Hawk of the Bureau of Labor Statistics used data from the Consumer Expenditure Survey to analyze the spending habits of families who receive public assistance, including food stamps, cash welfare, housing aid, or Medicaid. Unsurprisingly, their budgets tend to be quite modest. Their big budget items are housing, transportation, and food, spending on which came out to about $6,460 per year, or about $124 per week. That's for an average family of 3.7 people—meaning roughly $33 per mouth to feed. Based on some brief online searching, king crab legs cost about $34 a pound these days (though bulk discounts might be available).


Jordan Weissmann

Here are those expenses broken down into weekly totals, which might be a bit more comprehensible.


The point of these charts isn't that food stamp and welfare recipients never overspend, or make what might seem to be poor financial decisions. (Personally, I would love to see a distribution curve showing the range of spending patterns among families). Nor am I suggesting that these programs are 100 percent free of fraud; believe it or not, investigators found cases in California where welfare beneficiaries withdrew their benefits on cruise ships (the state later banned them from doing so). The point is, these are fringe cases, and they're used to demonize a group of people who are often working extremely hard just to get by.

April 15 2015 12:17 PM

Southwest Is Making Its Plane Seats a Fraction of an Inch Less Squished

While the state of the airline industry is broadly declining, Southwest had a bit of good news for customers on Tuesday: Seats are getting wider. Yes, the incredible shrinking airline seat will finally begin to unshrink a bit beginning in mid-2016 when Southwest rolls out new seats on the Boeing 737-800. At 17.8 inches wide, the new seats will be seven-tenths of an inch roomier than their economy-section predecessors and the “widest economy seats available in the single-aisle 737 market,” according to Southwest executive vice president Bob Jordan.

Competition among airlines and the never-ending quest for profits has caused the seats sold to passengers to shrink steadily in recent decades. A once standard 18 or 18½ inches has diminished to 17 or even 16½ inches on some of the narrowest carriers. Legroom has also dwindled, from something between 32 and 36 inches in the mid-1980s to a dismal 30-ish inches (or a tight 28 inches on Spirit Airlines) today. Those increasingly cramped quarters might help explain the popularity of space-protecting devices like the Knee Defender, and the bout of “recline rage” that seemed to sweep flights last summer.


Data from SeatGuru. Chart by Alison Griswold.

Southwest says the new seats are lighter than what it currently uses, which will help improve fuel efficiency. A representative for Southwest said in an email that the updated economy seats will recline and come with 32 inches of pitch—the space between seats when they’re in an upright position. Southwest doesn’t plan to increase the number of seats on its 737-800 aircrafts from its current 175.

Of course another way to make seats lighter is to eliminate the recline mechanism altogether. Ultra-low-cost carriers like Allegiant Air and Spirit already opt for nonreclining seats in part to keep costs down and in part to keep customers from angrily reclining on one another. Slate’s Dan Kois has previously made the case that reclining airline seats are nothing less than “pure evil,” so perhaps eliminating them is something Southwest should consider for a future update. If nothing else, it would at least be a better idea than surprise concerts in the skies.

April 14 2015 3:16 PM

Amazon to Publishers: Set Your Own E-Book Prices! Amazon to Customers: Not Our Fault!

The New York Times reported on Monday night that Amazon and HarperCollins had signed a new multiyear contract to sell e-books. The agreement, which came just a few weeks after news leaked to Business Insider that HarperCollins’ contract with Amazon was set to expire, presumably averted another lengthy, public battle like the one Amazon and Hachette waged for months in 2014.

With the latest deal wrapped, Amazon appears to have reached a truce, of sorts, with the publishing industry. Since last fall, the e-commerce giant has successfully renegotiated contracts with four of the five big publishers—Hachette, HarperCollins, Simon & Schuster, and Macmillan. The terms of all the contracts, per the New York Times, let the publishers decide their own e-book prices, but also gave them financial incentives to keep those prices low. Arrangements that give the publisher complete control over e-book prices are known in the industry as “full agency” models.

That Amazon has agreed to let most of the big publishers set their own e-book prices might help explain a line that now appears on many pages in Amazon’s Kindle store: “This price was set by the publisher.” In the screenshots below, you can see the note appended to e-books from Hachette, Macmillan, and Simon & Schuster right below the publisher’s name. Two of those e-books, you might also notice, are selling for more than Amazon’s preferred e-book price ceiling of $9.99.* Which is probably why Amazon is issuing this tacit appeal, and apology, to customers—we aren’t the one making you pay so much for this e-book, the publisher is. 


Screenshot from Amazon


Screenshot from Amazon


Screenshot from Amazon

The “this price was set by the publisher” line isn’t entirely new for Amazon, but it’s appeared on more e-book pages since publishers renegotiated their contracts. With Malcolm Gladwell’s Outliers, for example, archived Web pages show the e-book selling for $4.66 on Amazon in January 2014 with no such note. In October 2014, when the Hachette dispute was dragging on, that e-book’s price jumps to $9.99 but the line still hasn’t appeared. Now, it's still at that price, but with Amazon's disclosure.

As we’ve explained on Slate before, Amazon takes issue with high e-book prices because it feels strongly that e-books are highly price elastic. That’s econ-speak for saying that e-books are the kind of thing customers will buy many more of as their prices decline. Amazon argues that cheaper e-books are actually better for everyone; it claims a 33 percent decrease in e-book prices translates to 1.74 times as many sales, prompting a 16 percent increase in overall revenue. Publishers, not surprisingly, tend to disagree. But for now, they’ve found some middle ground.

*Correction, April 14, 2015: This post originally misstated that all three of the e-books pictured were priced above $9.99. Just two were.

April 14 2015 11:51 AM

This Study on Happiness Convinced a CEO to Pay All of His Employees at Least $70,000 a Year

You can thank one Mr. Dan Price for the Internet's feel-good business story of the day. The founder and chief executive of Seattle-based credit card processing company Gravity Payments has decided give out a massive raise that will bring the minimum salary for his 120 employees to $70,000 per year. "If it’s a publicity stunt, it’s a costly one," writes the New York Times, noting that the average annual pay at Gravity is currently just $48,000. Thirty workers will see their earnings outright double. To finance this gesture of goodwill, Price says he will slash his own paycheck from $1 million to $70,000, and spend down much of his company's profits. Assuming the Times hasn't missed some dark ulterior motive, the man is a mensch.

And, apparently, the sort of guy who reads academic literature in his downtime. According to the Times, Price hatched his idea after reading an article by psychologist Daniel Kahneman and economist Angus Deaton exploring the eternal question of whether money can indeed buy happiness. Their answer amounted to: yes and no. Based on data from a massive survey by Gallup, the pair concluded that people with higher incomes did indeed enjoy a sunnier mood. Asked to recall their emotions the previous day, they were less likely to report that they had been stressed or worried, and more likely to remember feeling happy and smiling. But there was a point of diminishing returns. Once people earned $75,000 per year, extra pay didn't statistically improve their state of mind at all. Hence Price's decision. For people who make low five-figures, a bigger paycheck makes a meaningful difference in the emotional quality of their daily lives.

All this might also sound like validation for those of us who like to think the wealthy are all secretly miserable, or at least no happier than the rest of us. But that isn't quite right. While Kahneman and Deaton found that $75,000 may have been the magic cutoff for cash's ability to brighten our daily lives, the results changed when survey takers were asked to rate their degree of life satisfaction in the abstract. Given a chance to sit back and ponder, people with more money tended to evaluate their lives more positively. And there didn't seem to be any point where an extra dollar stopped making a difference.

You can see the distinction between money's power to influence our daily emotional experience and its influence on how we view our station in life more broadly in the graph below. The measures of mood all peak and flatten out once people reach about $75,000. Life satisfaction, on the other hand, simply climbs with income, albeit a bit more slowly once people start earning around six figures. “Beyond $75,000 in the contemporary United States," the authors write, "higher income is neither the road to experienced happiness nor the road to the relief of unhappiness or stress, although higher income continues to improve individuals’ life evaluations." So money can't make us infinitely more joyful. But it might be able to make us infinitely more content.

This finding has been echoed in work by economists Betsey Stevenson and Justin Wolfers, who looked at differences in life satisfaction both internationally and within individual countries, and found that there was no cutoff where additional income seemed to stop making people more pleased with themselves. "We find no evidence of a satiation point," they write. Still, I doubt knowing that would make the employees of Gravity Payments any less thrilled.  

April 13 2015 6:08 PM

How Many Pro Football Players Actually Go Broke? Fewer Than You Might Think.

Pro athletes are notoriously bad with money, and it's hard to blame them. Most have spent their entire teenage and adult lives focused monomaniacally on playing a sport, and many enter retirement with only the barest amount of financial education or guidance, often after years of attempting to support a circle of less fortunate friends and family on their pay. This is an easy recipe for financial trouble.

But exactly how many end up outright bankrupt? Look up that question, and you'll likely be led to a Sports Illustrated article from 2009 that offered something close to an estimate. "By the time they have been retired for two years, 78% of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce," Pablo Torre wrote for the magazine, citing "a host of sources," including "athletes, players' associations, agents and financial advisers." Today, however, a new working paper released by the National Bureau of Economic Research is challenging that number, at least somewhat.* Using data on all 2,016 players drafted between 1996 and 2003, it finds that after two years off the field, just 1.9 percent of former NFL pros have filed for bankruptcy. A dozen years into retirement, 15.7 percent have filed for bankruptcy.

So, is the Sports Illustrated number simply wrong? I wouldn't go that far. While the article is a tiny bit murky on the provenance of its big stat, a source who was familiar with its origins told me that it had in fact been circulated internally by the NFL and its players union. The likely reason it's so high is that it measures much more than bankruptcies. Any former athlete who wound up unemployed or experienced a divorce would be lumped into the 78 percent total, regardless of how well his finances survived the experience. The authors behind the new NBER paper, on the other hand, are looking exclusively at bankruptcies. Since their analysis only includes former draft picks, they may also be tracking a somewhat elite subset of ex-pros. About 30 percent of players in the league were never selected in the draft, and—while I haven't seen any specific stats on this—I wouldn't be shocked if they generally had shorter, less profitable careers.

People also shouldn't lose sight of the big picture on this issue. Ultimately, the new paper does find some evidence suggesting that NFL stars might really file bankruptcy more often than other similarly aged adults. (The authors say they're planning to explore that issue further in the future.) Beyond that, we also should be careful about concluding that NFL players are faring all right financially just because they aren't filing Chapter 7 cases left and right. High-profile bankruptcies like Warren Sapp's and Vince Young's might be memorable cautionary tales. But it's entirely possible to end up penniless but not bankrupt, assuming you don't have much in the way of debt. And, of course, one can fetter away plenty of money without ending up in serious financial peril. A University of Michigan study found that about half of retired players said at one point they'd experienced a major loss in a business or financial investment. For a real-life example, just consider Dan Marino, who according to some reports lost millions on the company that gave us the Tupac hologram, of all things.

*Correction, April 14, 2015: This post originally misidentified the National Bureau of Economic Research as the National Bureau of Economics Research.

April 13 2015 1:30 PM

It’s Not Just Your Imagination: Airlines Are Getting Worse

The year that brought us multiple in-air scuffles over legroom was pretty bad for U.S. airlines as a whole. Airline quality declined broadly in 2014 as on-time performance slipped and the frequency of baggage mishandling and people being involuntarily kicked off their flights increased, according to an annual report released on Monday. Perhaps not surprisingly, the rate of consumer complaints also ticked up to 1.38 per 100,000 passengers, from 1.13 per 100,000 passengers in 2013. The Airline Quality Rating is a statistical analysis compiled every year using data from the U.S. Department of Transportation.

Virgin America notched the best overall score among the 12 biggest U.S. airlines for the third year running, while Envoy Airlines posted the worst. Delta budged up a spot from the previous year to rank third in overall quality and JetBlue fell two spots to place fourth. In terms of the particulars, Hawaiian was by far the timeliest airline while the most complaints were lodged against Frontier. Across all U.S. airlines, declining quality “does not send a positive message to consumers that see an industry enjoying positive economic times,” the authors wrote.

The latest airline quality report adds some hard data to otherwise anecdotal evidence that U.S. airlines are getting worse and passengers’ tempers are running shorter. In the middle of last year, a bout of “recline rage” hit travelers as multiple flights were forced to divert because fights over legroom broke out on board. (The instigator in those squabbles was the Knee Defender, a pocket-size travel device that locks on the fold-out tray on the back of airline seats to prevent the person in front of you from reclining. Use of it is banned by most major U.S. airlines.) Once-standard amenities on flights—like seat selection and complimentary checked bags—are being replaced with “optional” service fees, and seats are shrinking as air carriers move to cram more passengers onto each plane.

Customers hate changes like these, and yet they also refuse to pay for something better. In recent years, ultra-low-cost airlines Spirit and Allegiant have consistently outperformed their peers in terms of operating profit. (Spirit wasn’t included in the 2014 quality report because it didn’t meet the threshold passenger revenue, but the authors say they expect it to appear in the following year’s report.) JetBlue, the longtime proponent of roomier seats and “first bag free,” is shrinking its seats this year and introducing a first-bag fee. Between all that and the latest air quality report, airlines probably aren’t winning over any new fans. But until customers start protesting with their wallets, the industry might not do anything about it.