Joe Biden’s economic policies, dubbed “Bidenomics,” have been touted as a successful combination of industrial policy and pro-union support that aims to rebuild the economy from the middle out and the bottom up. However, despite the strong overall economy, there is growing concern among influential voters, particularly upper middle-class professionals who form the Democratic base, that they are worse off than before Biden took office.
As the 2024 presidential contest looms, with the economy playing a crucial role in voters’ minds, polls indicate that Biden is struggling to defend his economic policies against pessimistic consumers and workers. A joint poll by the New York Times and Siena showed the president struggling in battleground state polls against his likely GOP opponent, Donald Trump. NBC reported that Americans are unusually down on a solid economy.
Indeed, surveys reveal that most Americans are feeling pessimistic about their personal finances, with half of respondents in a Bankrate survey stating that their financial situation has worsened since 2020. Nearly seven in 10 cited a surge in living expenses as a major concern. Consumer sentiment, as measured by Morning Consult, has been declining for the past two months, especially among middle-income households.
There appears to be a disconnect between people’s feelings and the economic data. Aaron Terrazas, chief economist at job site Glassdoor, commented on this disconnect, highlighting the need to bridge the gap between perception and reality.
One notable aspect of the economic recovery since the pandemic is the success of less-educated and lower-paid workers. In a departure from previous economic expansions, wages for these workers have grown the fastest. This trend has been dubbed the “revenge of the blue-collar worker.” Julia Pollak, chief economist for job site ZipRecruiter, noted that the pandemic, labor shortages, and increased worker leverage have greatly benefited lower-income workers. Pay growth for workers with less than a high school degree has even outpaced that of college-educated workers for the first time since the late 1990s.
However, this poses a problem for Biden and the Democratic Party as their base consists mainly of well-educated white-collar workers. College graduates overwhelmingly support Democrats, while those without degrees lean towards the GOP. This shift away from economic populism, which began in the late 1990s, has resulted in declining support among working-class voters across ethnicities, posing a threat to Democrats’ gains among Hispanic and Asian-American voters.
Biden’s economic agenda aims to reverse this trend, albeit in a limited way. While pay for white-collar workers at the top is growing more slowly compared to lower-income workers, the job market for the office elite is also changing with fewer prospects and more requirements. Sectors like tech and media have seen payroll reductions, and even finance professionals are expecting smaller bonuses compared to last year.
In addition to concerns about the job market, high living costs are also contributing to Americans’ dissatisfaction. While the official inflation rate has slowed down, the impact of high interest rates on big-ticket purchases, such as homes and cars, makes them prohibitively expensive. Rising prices, especially for everyday items like groceries and gasoline, have a significant impact on people’s perception of inflation, even if their own net worth is increasing. Research suggests that these everyday purchases shape attitudes more than larger budget items.
Overall, while Biden’s economy may be strong in many ways, there is a disconnect between the positive data and the concerns of voters. Upper middle-class professionals, who form the Democratic base, are feeling worse off, and rising living costs are contributing to their dissatisfaction. Biden’s economic agenda aims to address these concerns and reverse the shift away from economic populism, but the challenges remain significant as the 2024 presidential race approaches.
