Andrew Harnik/AP Photo
President Joe Biden arrives to speak at an IBM facility in Poughkeepsie, New York, October 6, 2022.
President Biden spoke last Thursday at IBM in Poughkeepsie, New York, praising the companies that are investing in America, “because they see we’re coming back.” He doubled down on his view that Democrats are presiding over a hell of an economy. “Since I came to office, our economy has created 10 million jobs, 668,000 manufacturing jobs.” He reminded listeners that last month, he heralded the building of a semiconductor factory outside of “Columbus, Ohio, where Intel is investing $20 billion, 10,000 good paying jobs.”
Biden also reminded voters he’s gotten the unemployment rate lower than President Trump. “It’s more jobs created in the first term of a President than any time in American history.”
This rhetoric is sure to create new barriers for Democrats to get over, when their campaigns are contesting who is better at addressing the top issue in the election, the daunting cost of living.
Why are such statements about “ten million jobs” a red flag for working people?
More from Stanley B. Greenberg
I was instantly taken back to listening to focus groups with working people after the financial crisis crashed their lives. Millions lost their jobs at the start of the Great Recession, and millions more came back to work in lesser-paid and lesser-skilled jobs, while the top 1 percent, Wall Street financiers and CEOs got back on their obscene ascent. Working people fell into a deep hole that most didn’t get out of until the last year of President Obama’s second term.
They also watched the banks get bailed out, senior executives get their bonuses, and no executive held accountable for crashing their companies and the country. Anger about CEOs grew, as did the belief that politics was rigged.
I wrote in my book America Ascendant, “In the years after the financial crisis, few things have enraged people in our focus groups more than simply reading a positive jobs report. One moderator was almost attacked after reading a news report on the jobs gained in one month during the recovery. Voters in Ohio and Denver talked over each other as they disputed and qualified the news, rushing to dispel the conventional wisdom about the recovering economy.”
“[They] keep saying they created 225,000 jobs,” one non-college-educated man in Ohio said. “And what is the job doing, I mean, you can work for McDonald’s for $9 an hour to $11 an hour!” A non-college-educated woman in Ohio followed on: “What was the average salary of those jobs … That would be my first question.” Others asked: “Where are these jobs?” “What kind of jobs are they?” “Are these jobs that people can live on? Or are they jobs you take because you have to?”
I concluded from my research between 2010 and 2014 that two principles dominated the economic consciousness of the time. The first was that “jobs don’t pay enough to live on,” and the second, “people face an endemic cost-of-living crisis.” Fewer and fewer people were thinking about reaching for the “American dream” or even reaching the income level of their parents. Many talked about the middle class disappearing or being on life support.
“In the years after the financial crisis, few things have enraged people in our focus groups more than simply reading a positive jobs report.”
Of course, that was just the midpoint of a two-decade period where wages, income, and wealth declined or stagnated.
It has been a long time since the country saw a decade like Bill Clinton’s term in office, when real median income rose sharply and inequality declined. Blacks totally shared in those gains. That was a decade where we approached full employment, but changes in tax law enacted by Democrats helped ensure there was a shared prosperity. Clinton greatly expanded the Earned Income Tax Credit, a new top tax rate of 39.6 percent, as well as a “millionaire’s surtax.” He raised the tax rate for capital gains so it was equal to the rate paid by workers. (Other changes in trade agreements and financial services would contribute to the problems in later decades.)
Real median household income reached $66,000 in 2000, fell sharply under George Bush, and got back to $65,000 before the financial crisis in 2008 when it crashed again. It was still at $60,000 in 2012 when President Obama ran for re-election. That is when so many in my focus groups responded so angrily to President Obama’s job reports.
In 2015 and 2016, income finally got back to the level of Clinton’s last year in office. Most Americans had seen 15 years of pay cuts. Median income rose to $73,000 under President Trump, but that hardly made up for the years of decline. Incomes fell with the pandemic, and spiking inflation has cut real incomes by 4.4 percent this year.
Black and Hispanic families experienced an even darker period. Median income for Blacks reached $49,000 in 2000, at the end of the Clinton decade. It fell sharply to $43,000 under Bush, and after the financial crash fell to a desperate $39,000 in 2011. Black income spiked in 2014 but stopped its ascent in 2016. The average Black household was earning $45,000. That was 8 percent below Clinton’s last year.
Black household income rose and finally got back to the Clinton level under Trump, but has stagnated since 2019. Black families had gained only $2,000 in annual income compared to the end of the Clinton decade.
Hispanic household income also rose sharply under Clinton, reaching $52,000 in 2000. Then, it fell and stagnated before crashing in 2007. And as with Blacks, household income hit a low of $46,000 in 2012. Then, incomes went up steadily until 2019, then stalling at $58,000 for two years. Hispanic households ended up only 12 percent above 2000 levels, more than two decades later.
Those stark results explain why 60 percent of Blacks and Hispanics—and a like number of millennials—say that “cost of living” is the top problem. If there is an emerging “enthusiasm problem” for these voters, it is because Democrats aren’t speaking to their economy and lives.
That is why our most impactful economic message includes the statement “working people haven’t seen a real pay raise in decades.” And our strongest overall message says, “Washington doesn’t get it.” To be honest, our elected leaders live in a different world and don’t feel what is happening to the great majority of Americans. They don’t feel their anger that the political game is rigged for the very richest, the big corporations and billionaires.
OBVIOUSLY, WE WANT A PRO-UNION PRESIDENT who is working to grow the number of jobs, building and modernizing America’s infrastructure, and shifting production of critical semiconductors, batteries, and electric vehicles produced at home. You want new trade agreements that are more American worker–centered, as the president has promised. I agree with President Biden when he says, “America is in a better place than any other country coming out of the pandemic to lead the future.”
But that doesn’t put food on the table or deal with rising gas prices, electric or oil bills, rents and mortgages, medical and drug costs. Those problems are just multiplying in this period of high inflation. People truly haven’t seen a pay raise in decades. They have been mostly living with pay cuts and lost wealth and declining security.
President Biden and Democratic leaders are able to say, authentically, that Americans haven’t seen a pay increase for years under both Republican and Democratic presidents and that is not OK. Biden used to say, “I know people are living paycheck to paycheck,” and that gave him an audience campaigning in the Rust Belt states.
People now expect government to provide new kinds of support to raise their family income and to deal with essential expenses. They are looking to the government to make work affordable.
The economic terms of the debate have moved to an entirely new place.
The passage of the Affordable Care Act changed the focus of the economic debate and what was possible to make work affordable. The ACA was initially unpopular with working people, for pretty good reasons. The insurance was expensive and had high deductibles that made it difficult to use. If you want to know what people are really looking for, see the broad support for expanding Medicaid, even in the most Republican states in the country. Working people want and expect the government to help with the high cost of health care.
When I listed to Trump voters in Macomb County, Michigan, during the congressional debate over whether to “repeal and replace” Obamacare, I found out the Trump voters took him seriously when he said he would provide “MUCH less expensive and MUCH better healthcare.” They wanted government-supported health care that dramatically reduced their family’s health care spending.
All working people—whether they voted for Trump or Clinton, Trump or Biden—now expect government to do more to make health care affordable.
With health care spending such a big proportion of household costs, health care has been one of the very top issues in 2016, 2018, 2020, and now in this midterm election. It is Democrats who have passed legislation to reduce health care premiums and the costs of prescription drugs and insulin. That is addressing the cost of living.
Another formative event, the pandemic, has educated people on how government can help their families deal with essential expenses.
The pandemic took unemployment back to double digits, a frightening scenario to those who have lived through two decades of falling or stagnant wages. But the government responded like almost no other time in our history. For the first time, unemployment benefits nearly replaced wages, and didn’t expire in six months. Just as important were the direct per-person payments to households, and limited paid sick leave for those with COVID. The direct payments were the same for each household, not linked to the household’s income level.
Democrats gained control of the Senate when the two Democratic candidates ran on continuing those direct payments. And with their majorities, Democrats passed the expanded Child Tax Credit that was paid in monthly payments to families with children. I wrote in The American Prospect, “Low-income recipients spent more than 90 percent of the added money for food, utilities, clothing, diapers, and education,” as well as child care.
That program captured the priorities Democrats must have if it they are to win the support of a majority of Americans who live with an endemic cost-of-living crisis. If Democrats had successfully enacted the huge expansion of help with child care, it no doubt would have been part of the new equation.
All these initiatives are very popular with white working-class voters under 50 years and disability families, as well as our base of Blacks, Hispanics, Asians, Gen Z, millennials, and unmarried women—all the groups Democrats need to run better with to get to a dependable majority.
Imagine how desperate all of those people are when post-pandemic supply chains, combined with the cutoff of Russian energy, produced today’s high inflation. They know what global events produced. And they are focused like a laser on what you are doing to help in the very short term, not what America’s economy will look like in the future.
Hearing that Democratic leaders get it will get their attention. And so will recognizing that they failed to get a raise under both Democratic and Republican presidents.
Hyperinflation imposes impossible costs on them, and we believe government must help make work affordable. We are urgently implementing legislation to cut your taxes, reduce health care premiums, prescription drug and energy costs. Republicans are just in the pockets of the big corporations, pharma, the NRA, monopolies and billionaires. That is the urgent choice in this election.
