Voters are dissatisfied with the economy. Despite lowering inflation rates and rising job growth, voters by and large feel worse off now than they were four years ago.
With less than a month until the election, these economic concerns may be the deciding factor in the 2024 election.
Polling shows voters feel Republicans have better economic policies than their Democratic counterparts, and that remains true from the top to the bottom of the ballot. With a close race for president and a battle for control of Congress, the economy could be a deciding issue in this election.
Concerns regarding economic policy are especially potent in Iowa where Republican congressional candidates are running on the issue of “out-of-control” inflation under President Joe Biden, attacking their Democratic opponents’ affiliation to the Biden-Harris administration.
The issue is more important among Republican voters who have criticized President Joe Biden for the state of the economy during his administration.
Under Biden, inflation has reached record-high levels, reaching a 20-year-high at 9 percent in September 2022. Inflation has since dropped from its post-covid peak to around 2 percent in September 2024. Additionally, the U.S. Federal Reserve has begun to cut interest rates, signaling the central bank is not as concerned about a possible recession.
The International Monetary Fund, a nonpartisan international organization focused on fostering economic growth, said in a June 2024 press conference that by most measures the economy is doing well.
However, inflation has raised prices by almost 20 percent since Biden took office in 2020 and wages have remained stagnant, according to the Brookings Institute a nonpartisan policy thinktank based in Washington D.C.
The Biden administration has struggled to defend its record on the issue, with polling showing that voters feel the economy is worse off under Biden.
While the current administration is grappling with voters’ poor outlook on the economy, it has bled into the presidential campaign. Polling shows that former President Donald Trump, a Republican, does better on issues like the economy compared to Vice President Kamala Harris, a Democrat.
Harris has inherited voters’ disapproval of Biden’s handling of the economy — according to an October ABC News/Ipsos poll. Among voters who say the economy is worsening, 74 percent support Trump compared to only 21 percent who support Harris.
The issue is also important to Iowa voters who favor Trump. A September *Des Moines Register*/Mediacom Iowa poll found 46 percent of the Iowa voters polled feel they are worse off financially compared to four years ago. That same poll found that 57 percent of Iowa voters feel Trump would handle inflation and the economy better than Harris.
The issue could be a deciding factor in November. Harris and Trump are in a dead heat in seven key swing states that will decide the election. Harris only leads by a few points nationally.
According to a September Pew Research Center poll, 81 percent of voters say the economy is a deciding issue when thinking about who to vote for in November.
While the economy is doing well by most measures, public opinion polling shows that voters feel the economy is doing poorly. Anil Kumar, an economic professor at the University of Iowa, points to rising prices and stagnating wages as a main contributor.
Federal Reserve has greatest influence on the economy, not the President
Public opinion polling shows that voters feel the economy is doing poorly, but economists say the economy is doing better than many other Western economies following the COVID-19 pandemic.
An October *The Economist*/YouGov poll found that 46 percent of all voters think the economy is declining. Breaking this up into political parties, the poll found that 74 percent of Republicans say the economy is declining, while only 19 percent of Democrats say the same.
Linda Dim, a first-year University of Iowa student and Independent, said she feels like prices have risen and neither candidate has talked enough about how they are going to lower inflation and prices.
“Inflation is obviously really high — I mean, like prices are skyrocketing,” Dim said. “I mean, gas has never been this expensive before, and I feel like it’s going to get more expensive as time goes on.”
Kumar, formerly of the U.S. Federal Reserve Bank of Dallas, said voters’ poor opinion of the state of the economy can likely be attributed to the media’s perception of the economy and increased prices. In reality, Kumar believes that the economy is doing well.
“The economy is at a very sound footing, and the inflation rate is well on its way to the Federal Reserve target,” Kumar said.
Kumar said that increased prices are less a result of the Biden administration, and more directly a result of the U.S. Federal Reserve’s fiscal policy aimed at improving the economy and avoiding a recession.
“So, what’s going on here is that in the process of controlling inflation, the Federal Reserve had to slow down the economy,” Kumar said. “There’s no other way. You’re not going to control inflation without slowing down the economy, and so it had to raise interest rates.”
Despite these higher prices, Kumar said the Biden administration performed remarkably well following the COVID-19 pandemic compared to other Western economies. But he also notes that while both the Federal Reserve and the executive branch play important roles in our economy, it is generally the Federal Reserve that has the largest impact.
“In the last couple years, whatever has been going on in the economy has been mostly due to the Federal Reserve,” Kumar said.
Voter opinions on the economy depend on political party, age
While the majority of voters find the economy to be a deciding issue, where exactly they land depends on their political affiliation and their age.
An October *The Economist*/YouGov poll found that almost all voters polled believe the economy is very important, but only 68 percent of voters aged 18 to 29 believe the issue of the economy is very important whereas 77 percent of voters aged 45 to 64 find the economy very important.
UI political science professor Tim Hagle said older voters might find the economy more important. Better economic conditions mean better job opportunities and higher wages, which Hagle said is important to older voters who are responsible for supporting themselves and their families.
Jayden Khamphilanouvong, a first-year student at the UI and an Independent, said that the economy is his top issue. While Khamphilanouvong thinks the economy is doing relatively well at the moment, he plans to vote for Trump because he feels he has been more vocal about the economy.
“I feel like [Trump’s] economic policies are a lot more straightforward,” he said. “I feel I haven’t heard enough from Kamala yet on her economic policies.”
*The Economist*/YouGov poll found that only 35 percent of 18 to 29-year-olds say the economy is getting worse whereas 56 percent of voters 65 or older feel the same.
Younger voters, who aren’t supporting families or may be financially supported by their parents, are less likely to focus on the economy in an election, Hagle said. These voters might prioritize other issues, like the climate, foreign policy, or reproductive rights.
Beyond age, Hagle said the political party a voter is registered with has a strong correlation with how they view the economy and what policies they deem as most efficient.
Hagle said he thinks the two candidates should focus on addressing the concerns of what he calls “no-party” voters, or Independents. Hagle said these voters care the most about “kitchen table issues” like jobs, the economy, and healthcare.
“Those are the things that directly affect people,” Hagle said.
When it comes to the two plans that Trump and Harris bring to the table, Hagle said it’s hard to be sure which resonates more strongly with voters as neither candidate has been very clear on their proposed policies.
While the state of the economy is important to voters, the president has very little economic power, Hagle said.
“You hear presidential candidates make all kinds of promises, and it just never happens because they don’t have that much power,” said Hagle.
Hagle said, in reality, the legislative branch is responsible for passing laws, and with a divided Congressional government — as the U.S. has now — passing any major economic legislation would be difficult.
Parties disagree on the state of the economy
Due to the negative public opinion polling, political parties are taking differing approaches on how they frame the state of the economy and their economic policies.
Candidates in Iowa’s 1st Congressional District largely mimic their presidential candidate’s plans for the economy. Both candidates in Iowa’s 1st District, U.S. Rep. Mariannette Miller-Meeks, R-Iowa, and Iowa City Democrat Christina Bohannan, have made the economy a talking point on the campaign trail.
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Miller-Meeks has sought to attack Democrats for what she says is causing sky-high inflation and rising prices.
“Everybody is affected, and especially young people, are affected by high interest rates that they’ve not seen before,” Miller-Meeks said in an interview with the *DI*. “So renting an apartment or if you’re wanting to buy a home as a young family, people feel that the American Dream is no longer available to them.”
Miller-Meeks said while inflation has gone down, its effects are cumulative and that Trump-era policies, like the Taxes and Jobs Act which gave tax cuts to corporations, would help with the economy.
Bohannan, in turn, has made economic fairness and her middle-class roots a key part of her campaign much like Harris has done nationally.
“I know what it is like to have to work really hard and still have to make very difficult choices and not be able to meet all of your family’s needs,” Bohannan said in an interview with the *DI*. “People know that about me. They know that I am going to fight for hardworking families like my own.”
Bohannan’s campaign focuses on addressing the cost of healthcare, but Bohannan also supports many of Harris’s economic proposals.
Iowa Democratic Party Chair Rita Hart said the Democratic Party looks to build a robust, sustainable economy for all Iowans.
“We believe workers should earn a good living, have the right to unionize, have access to quality, affordable child care and public education, and that millionaires and billionaires pay their fair share,” Hart said in a statement to the *DI*.
Hart pointed to economic indicators that show the economy is doing well as proof that the Biden-Harris administration has improved the economy.
The S&P 500, an index measuring the health of stocks for the top 500 companies, hit an all-time high last month pointing to a strong stock market. Unemployment is at 4.1 percent for September 2024, according to the U.S. Bureau of Labor Statistics, which is on par with pre-pandemic unemployment. Kumar said these, and other factors, point towards a healthy economy contrary to public opinion.
David Barker, Iowa GOP finance chair, doesn’t share Hart’s views on the Biden administration’s economic outcomes. Barker said it’s easy for Republicans to focus on the economy in this election because every day voters are facing higher prices than they were four years ago. This increase in prices, Barker said, is due to the Biden administration’s economic policies coming out of the pandemic.
“During COVID, the economy needed some stimulation, but by the time Biden and Harris were in office, that was no longer needed, but they kept their foot on the gas of spending, wild spending, and just tremendously inflationary policies,” Barker said.
Inflationary pressures are partly due to an increase in government spending but supply chain issues and the Federal Reserve’s fiscal policy are more likely to blame for inflation, according to a Politifact Iowa report.
Barker said going forward, a Harris administration would make the economy worse. He believes her plans to prevent price gouging would create economic inefficiency and make life harder for those who are currently struggling.
Harris’s plan for the economy looks to expand the Child Tax Credit, support first-time homebuyers, and increase taxes on corporations and households making over $400,000 per year. Meanwhile, Trump is focused on cutting taxes, imposing 20 percent tariffs on imports, and increasing federal housing support. Both agree on ending income taxes on tipped income.
Harris’s plan would add the least amount to the deficit
According to a report from the University of Pennsylvania Wharton School of Finance, both candidate’s plans for the economy will add to the national debt. Harris’s plan would add at least $1.2 trillion to the national debt over the next decade, while Trump’s plan would add $5.2 trillion.
Kumar, an economics professor, said to judge the impacts of each of the candidate’s economic proposals, voters should look at the national debt deficit.
Kumar emphasizes at some point, the national debt will need to be paid. He said a plan that helps people today, but increases the deficit, will ultimately hurt people tomorrow, resulting in higher future interest rates, higher future taxes, and lower future spending.
“You have to look at some measures,” Kumar said. “And the measure I look at is whose plan is going to increase the deficit more, and unfortunately, according to the Committee for a Responsible Federal Budget, it’s Trump’s plan.”