If the Economy Is Hot, Why Are Voters So Frustrated? | Opinion

Rarely has Washington stumbled on an issue more confounding than President Biden's low approval ratings. Among those traveling the corridors of power, you'd sooner see a confident assessment of Jimmy Hoffa's whereabouts than a clear explanation for the public's dissatisfaction. The economy appears to be humming. The stock market is hitting record highs. The unemployment rate is near an all-time low. Wages are rising faster than inflation. And inflation has finally cooled. What more must a president do to win over the public?

Unfortunately, the variety of explanations bandied about—that prices remain high, that misinformation prevails, that we're caught in a post-pandemic funk—overlook what is likely the core of today's problem. The president has done a great deal to improve the economy—championing investments in infrastructure, bringing manufacturing jobs back stateside, and pointing us toward what we all hope will be a "soft landing." But he has the misfortune of presiding over a country that has undergone at least a quarter-century of economic carnage for middle- and low-income America. Until recently, however, the extent was shrouded by economic statistics.

To be fair, the economy has improved considerably since Biden took office. But, as research by my colleagues at the Ludwig Institute for Shared Economic Prosperity (LISEP) has recently revealed, those improvements come at the tail end of a quarter-century that has been almost uniformly disastrous for the working and middle classes. Most Americans, raised to believe that each generation is supposed to do a bit better than the one before, increasingly have come to feel vulnerable to downward mobility. And the resulting frustration haunts the president's approval ratings.

Take, as an example, the nation's headline unemployment rate, down from 10 percent at the height of the Great Recession to below 4 percent today. If you add those who are earning a poverty wage or subsisting in a part-time gig (while preferring a full-time job) to the universe of the "unemployed," the actual figure is more than 22 percent—more than one of every five workers. That may be down dramatically from where it was—indeed, to the president's credit, it's the best it's been in nearly 30 years. But that may not be satisfying to someone struggling to maintain their childhood standard of living or worse.

Or consider what Americans are earning. To look at prevailing wage statistics, the median today sits at more than $58,000 a year. But if you include workers excluded from that measure—those working part-time and those who are unemployed—and the number comes down to $50,000, a meaningful difference for the median income worker. Even more painful, during the early 1980s the gap separating those in the top 10 percent and bottom 25 percent of earners was less than $70,000 (in 2023 dollars)—it's now nearly $100,000.

Finally, conventional wisdom in Washington has long held that prices hikes were modest between the 1980s and the post-pandemic inflation crisis. But the Consumer Price Index (CPI) inadvertently hides the reality that prices on items that most families can't avoid—necessities including eggs and health care premiums—rose more aggressively than the prices for luxury items, like yachts and second homes, even before COVID. Between 2001 and 2019, CPI rose less than 45 percent—the true cost of living climbed nearly 65 percent. And over the past 18 months, basic family necessities have become even more expensive, even if that growth has stabilized.

None of this is to deny that much has improved during Biden's tenure, thanks in large part to the administration's agenda. But the fundamental misperception in Washington is that the public's present frustration is born from their reaction to what's happened since 2021—that it could be changed if the president just tweaked this one policy or another—when in fact it reflects a longer-term reality. The White House is trying to stabilize and improve an economy that hasn't worked for huge swaths of the population for decades. For understandable reasons, many believe they have more to gain from seeing it fundamentally deconstructed.

If that helps to explain Biden's public approval challenge, it also points to what is likely to be a better campaign strategy. Rather than bragging about the president's economic accomplishments as though their effects can already be felt, the campaign needs to explain how the administration has laid a foundation for an economic resurrection. Victory laps about "Bidenomics" simply don't hit when voters feel remain beleaguered by housing and grocery prices. The president, famous for his ability to empathize, needs to apply that superpower here, illustrating that he understands their plight, and explain how he is sowing the seeds for greater prosperity and upward mobility both over the next four years, and further down the line.

Eugene Ludwig is the former comptroller of the currency, chairman of the Ludwig Institute for Shared Economic Prosperity, and CEO of Ludwig Advisors. On X (formerly Twitter): @geneludwig.

The views expressed in this article are the writer's own.