Real wages, inflation, and congressional mid-terms
There’s one clear thing we know about inflation and the Biden administration: they are worried about it. Not just because inflation undermines paychecks and savings. It has a nasty tendency to wreck political parties, too.
As Vox’s Andrew Prokop writes, inflation could make the already-difficult 2022 midterm congressional elections a rout for Biden & Co.:
University of Denver political scientist Seth Masket has modeled how changes in real per capita disposable income are related to midterm results for the president’s party. The metric helps capture how the economy is experienced by the average voter: are their wages going up or down, when adjusted for inflation? Can they afford more things, or fewer?
The data covers 1950 to 2018, and it spans 18 midterm elections. In 15 of these midterms, real incomes were increasing. Only three midterms featured negative real income growth by Masket’s metric, and all went badly for the president’s party, with two being among the worst performances in modern times.
Prokop ran the numbers for 2022 and found the results in the same quadrant as those three blowout loss elections.
There are cross currents and complicating factors, of course. But there’s also a bottom line that matters a lot more:
…large majorities of poll respondents have been saying they think the economy is in bad shape and that Biden hasn’t been handling it well. Biden’s approval rating started declining more rapidly in the second half of last year, as inflation began really picking up, and it’s currently around 41 percent. According to NBC News, the White House is trying to brainstorm a new economic message — but there may be no substitute for improving workers’ real wages.
If people think the economy is bad – and then get proof of it when they can no longer afford to buy certain things – they look to hold someone responsible. Joe Biden isn’t on the ballot this year. But if inflation continues to erode living standards it won’t matter. Any Democrat will do as a substitute.