Most voters think the economy stinks, and that perception will play a major role in the 2024 election. But while economic dissatisfaction is widespread, it is much harder to say what policies will “fix” the economy—because other than anxiety about continuing inflation, there is little consensus about what precisely is broken.
In a New York Times/Siena College poll released in November, 52 percent of all registered voters in six political battleground states said that economic conditions in the United States were “poor,” with another 29 percent calling the economy “only fair.” Among voters under the age of 30—one of the groups most supportive of President Joe Biden in the 2020 election—59 percent said the economy was poor and 34 percent said it was only fair. That represents an almost unanimous sense of pessimism among those new to the workforce.
Well aware that voters hold the president responsible for the economy, Mr. Biden has repeatedly argued that “Bidenomics Is Working,” especially in job creation but also in bringing inflation down from its post-pandemic high. The Biden administration also points to a healthy increase in the gross domestic product in 2023, a sign of a continued recovery from the depressing effects of the Covid-19 pandemic.
How should voters evaluate the economy when they go to the polls? And how do we, as a country, identify what needs attention?
But even the best economic metrics do not automatically resolve the concerns of citizens, who may be seeing and experiencing things that are not easily measured by the nation’s Bureau of Economic Analysis.
In another recent poll, by the The Associated Press-NORC Center for Public Affairs Research, almost 80 percent of Americans said their household debt stayed the same or rose last year, with only 15 percent reporting a rise in household savings. Some of this debt may be the result of Americans buying big-ticket items after waiting out the pandemic—consumer spending overall grew significantly last year, at least until a slowdown in October—but one in four households reported medical debt, and more than a third of Americans under 30 have student loan debts.
The most basic expense of all, housing, also continues to rise, in part because of the Federal Reserve’s continued policy of high interest rates—but also because of chronic undersupply of new housing. Mortgage rates are at a 23-year high, and the median monthly home mortgage payment was $2,155 in September, up by 11 percent in a single year, according to the Mortgage Bankers Association. And rising rents, by one measure up 28 percent since the start of the pandemic, mean that alternatives to homeownership are not attractive options. (Increasing the supply of new housing would bring costs down, but that is largely controlled by state and local governments rather than determined by federal policy.)
There are also troubling signs that the overall economic recovery is not reaching all Americans. The poverty rate for children in the United States more than doubled in 2022, to 12.4 percent, after pandemic assistance, including an expanded child tax credit, was allowed to expire. In that same year, the percentage of U.S. households experiencing food insecurity rose by nearly three points to 13 percent (and jumped to 33 percent in households with children headed by a single mother).
Mr. Biden apparently realizes that “stay the course” may not be an effective economic message as he seeks re-election, so he has admitted that “prices are still too high for too many things.” In November, he blamed corporations for “price gouging” even after their own production costs have gone down and “supply chains have been rebuilt” after the pandemic. This may or may not be a winning strategy; with the exception of gasoline, the prices of basic consumer goods tend not to fall once they have gone up, and deflation can cause a new set of problems, including decreases in production and employment.
The cost-of-living squeeze is a significant source of economic anxiety, but there is no way to summarily reverse cost increases. Instead, there is a need to discuss the policies and priorities that could actually help more people benefit from growth in the G.D.P.
The most practical ideas for addressing these issues—like the expansion of the child tax credit discussed above—involve spending money to assist those who are most in need. But discussion of such policies usually founders on the false idea that the government should be run like a household, pinching every penny, without recognizing that financial support for people who are already pinching every penny actually helps generate both economic activity and security.
Financial support for people who are already pinching every penny actually helps generate both economic activity and security.
Political leaders, journalists and voters should also consider the trade-offs of economic change. As mentioned above, too much pressure to keep consumer prices low can lead to unemployment or fewer people earning a livable wage. The United Auto Workers’ strike of last year was part of a growing wave of labor victories, securing higher wages and better working conditions for members of the working class. If car prices go up slightly as a result of these higher wages, or if Starbucks charges more for coffee because its workers unionize for better benefits, the country as a whole could still be better off. (The Associated Press reported that hourly wages increased at a slightly higher rate than prices last year.)
If more workers feel confident enough to reject terrible jobs, we should be thankful. And even if the Federal Reserve Bank worries that a low unemployment rate may contribute to inflation, we should take into account the social and economic benefits of increased participation in the workforce.
That brings us back to the question: How should voters evaluate the economy when they go to the polls? And how do we, as a country, identify what needs attention?
As always, we must consider the most vulnerable members of society. That means making sure that basic necessities are affordable for all families but showing judgment about how to keep down prices—that is, not by holding down the wages of the people who manufacture goods and provide services, and not by increasing our dependence on goods from countries with low pay and even forced labor.
The economy is not the only issue—and not the most important issue—in the 2024 election, which will also turn on basic commitments to constitutional democracy, as well as questions about immigration policy and the American response to the conflicts in Ukraine and between Israel and Hamas. But many voters will focus on more day-to-day concerns, and how they will pay the bills is chief among them. It would be foolhardy for either political party to dismiss these concerns, or to tell voters that there is nothing to worry about. Instead, they should start a conversation about what actually needs to be done.
