President Joe Biden goes into next year’s election with a vexing challenge: Just as the U.S. economy is getting stronger, people are still feeling horrible about it.
Pollsters and economists say there has never been as wide a gap between the underlying health of the economy and public perception. The divergence could be a decisive factor in whether the Democrat secures a second term next year. Republicans are seizing on the dissatisfaction to skewer Biden, while the White House is finding less success as it tries to highlight economic progress.
“Things are getting better and people think things are going to get worse — and that’s the most dangerous piece of this," said Democratic pollster Celinda Lake, who has worked with Biden. Lake said voters no longer want to just see inflation rates fall — rather, they want an outright decline in prices, something that last happened on a large scale during the Great Depression.
“Honestly, I’m kind of mystified by it,” she said.
An element to this is that there are a lot of different statistics that can tell a lot of different stories depending on what bits of data you pick.
For instance, most people would probably say that the average person had less purchasing power in October of this year compared to October of 2022. They would actually be wrong, as inflation-adjusted hourly wages have actually increased slightly in that time period (by ten cents, admittedly, but the fact remains that wage growth has been outpacing inflation).
This does not mean that every person has seen a growth in purchasing power, and my loose understanding is that most of the growth has been occurring at the bottom of the labor market (which is arguably a good thing from an equity standpoint).
I completely agree that it’s not going to win votes. I think the takeaway is that the average consumer is not a particularly rational actor (much to the chagrin of economists), and your messaging needs to address the actual source of their frustrations, which may very well be the mere fact that the numbers got higher even though their purchasing power hasn’t actually decreased.
I’d emphasize how you said that the average Americas is clearly not feeling the benefit, because I think that holds a really key part of this. Consumer sentiment does not necessarily track actual data, whether they’re high level metrics like GDP or more individual ones like inflation-adjusted wages.
Whenever anyone says “the economy”, you can and should mentally substitute it with “rich people’s yacht money”.
Rich people’s yacht money doing well doesn’t do shit for 90% of the population. It doesn’t pay the rent, put food on the table or clothes on their back. They can’t afford to see a doctor or ride the damn bus.
And you want them to be happy because some stockbroker is getting a second holiday in the Maldives this year?
Stupid arrogant fucks.
That’s why they say “unemployment being too low is bad for the economy”. Low unemployment means higher negotiating power for workers, which means higher wages and better working conditions. The only way that statement makes any sense is if they’re exclusively talking about yacht money.
Don’t even start on the wage-inflation-spiral idea. It’s the workers’ fault for wanting higher wages as it allows service-oriented business to charge higher prices, driving inflation.
While the theory probably has roots in real-world pricing algorithms (eg how much can we charge people in X region for Netflix) that rise in cost contributes to inflation figures. The fact that wages have been stagnant for decades undermines the whole argument.
“Well the poors can afford it and the shareholders will love it!” FFS
Low unemployment means higher negotiating power for workers
Too bad all those “right to work” people have been actively fighting against negotiation powers for workers. But lets blame the ‘yacht owners’ and piss and moan about how they take advantage of the lopsided negotiation powers we voted in for them.
I know! We should put exclusively yacht owners in power! They’ll totally fix it. /s
When people say they’re not happy about the economy, this is the shit they’re talking about, not statistics.
Ordinary people get fucked in this economy, and there isn’t any party that can do anything about it.
They’d like to do something about it. But they can’t get elected.
Unless there’s something else they’re planning.
Politics literally sets the rules. If you can get an elected majority you can certainly do something about it.
To fix things we would need one party to take over 153 separate branches of government.
Not at all. You’re missing the forest for the trees lmao
The problem is that no matter how much inflation goes down, if the price gouging capitalists that own the grocery stores, the gas stations, and so on don’t stop.
It’s not about rich people’s yacht it’s about the American people being taken advantage of simply because they can. The economy is doing a lot better, record low unemployment for example is a huge metric here but what difference does that make when the grocery stores are selling less for more money?
You’re crying about rich people’s yachts when you should be crying about record price gouging without any cause. Those yachts don’t have impact on the average American’s QoL but price gouging absolutely does.
When investors do better, nobody else does better. The whole system is based on harvesting wealth from society as a whole, and concentrating it in the top 1%. Ever hear of the Gini coefficient?
Yes, price-gouging companies jacking up their prices and paying fuckall in wages are the direct instrument of suffering. But they do so in order to provide yacht money for the investor class, and in so doing they impoverish literally everyone else.
Median income is up since before the pandemic, even when adjusting for inflation. The average person is better off.
“My rent is going up and food and gas are more expensive. My tooth hurts but I can’t afford to get it fixed, and now my check engine light is on.”
“ACTUALLY median income is up!”
Do you see how that’s not helping?
Gas is actually the one thing I’ve noticed that has been a lot better lately. But everything else is still expensive from the crazy greedflation every company was trying to pull when we were tolerating post-pandemic cost rises.
Health care is actually hugely underestimated, here. Health costs have been going up decade over decade and people’s health problems have been stacking up. While in the '70s and '80s people could get treatment, someone born in those years started out with the ability to get medical care but has increasingly lost access as they’ve gone through their lives.
Those people are getting older, now, and it’s getting to the point where they can’t just ignore the stuff they can’t afford. Conditions that would have been easy to treat (but often rare/expensive) are becoming chronic, fatal, or debilitating.
Life expectancy is starting to drop and while that drop is largely due to COVID (which, by itself, is an insane thing) it’s also a warning sign about what’s to come.
Prices go up every year, it’s by how much matters. For example, rent has been going up slower than inflation for a year now. For every person whose rent went up, there must be a lot of people who don’t go online to verify their rent did not go up
Definitely not true for me personally or anyone I know well enough to know their financial info. Most people I know are barely able to stay in place, with their ‘raises’ almost immediately consumed by inflation and higher rent everywhere.
They are not the median, then, but maybe in the lower half of the income which is not doing as well
the grocery stores and the rest of the capitalist pigs have yet to stop price gouging
Groceries really are the problem. I lived comfortably up until about a year ago. Now the checking account gets pretty low every couple weeks. And that’s with decent raises for me and my wife. I don’t even care about gas prices except in how they add to the cost of everything that gets shipped. Food prices are killing us.
Yeah I went from not having to really check prices when I shopped to having to be careful so I don’t accidentally spend $200/week.
A bag of ruffles, which I swear is only a tiny bit bigger than the size that used to exist between the snack size bags and the regular bags, was something like $6.75. It’s legitimately cheaper to get the gourmet kettle cooked chips.
Just stupid expensive for some things.
Pollsters and economists say there has never been as wide a gap between the underlying health of the economy and public perception.
There’s never been as wide a gap between the rich and the working class, either. Gee, I wonder if that could have something to do with it?!
I assumed that was true. The article, however, claims
Inequality has lessened somewhat in recent years as wage growth has favored poorer workers.
Ed: even if the article is correct, the gap is still massive. And so the increased profits (due to price gouging) may make some numbers look better, I can’t help but think many households are still struggling to catch up?
Supposedly pay has increased across the board but enough to catch us up to, say, 2019 buying power? The article claims households are better off than in 2020.
The article seems to want to blame those with dim views of the economy without a satisfactory explanation of the psychology, just a bunch of guesses that, to me, don’t seem convincing. The supporting evidence seems rather cherry picked.
If food is up 25% since the pandemic, have all wages also gone up that much? Ok, ok, sure, overall cost of living probably hasn’t gone up that much. But my wages most certainly have not even come close to catching up with the current COL.
So maybe it is the middle classes, rather than lowest earners, who are feeling shafted. Maybe those in charge aren’t looking at the right statistics to understand the perceptions.
Inequality has lessened somewhat in recent years as wage growth has favored poorer workers
Also that means pretty much nothing without also looking at how much more money the richest of us have. Their wealth increases by the trillions during covid. To say that inequality is now better because some of the lowest earning workers might be making a few thousand more each year is disingenuous at best.
Wages have not kept up with inflation. Why is this so hard for the media to understand?
Wages have shot up like crazy over the past few years. But the FTC has not enforced antitrust regulations over the past 30 years which led to everything being owned by megacorps with no competition - so we’re getting the screws turned on us right now. The FTC is finally engaging in some antitrust measures, but it is too little, too late. It’s kind of hard to blame that on the current regime.
Shot up like crazy is a weird way to talk about how the federal minimum wage is still $7.25
My wage has certainly gone up. I also can’t seem to go grocery shopping without spending $400 now. Literally everything is more expensive, bills included.
So if I look at my wage as 100%, rent and groceries and bills all take up a larger percentage of that then just five years ago.
Unless there are enforced laws around consumer pricing, every company on the planet is gonna raise prices when wages go up.
It really doesn’t help to have snooty liberal assholes telling those of us on fixed incomes that our financial situation is great because their 401k’s are appreciating and we’re just too stupid to realize how great the economy is.
The Hillary Clintonism runs strong. Bill at least pretended to give a fuck about people. The democratic pitch being “hey, at least we’re not doing a Gaza to you! Be happy with your scraps” needs a rework Stat.
