Iowa 500 LV, 4.5%
Obama 52, McCain 44
Sen: Harkin (D-i) 57, Reed (R) 41
New Hampshire 700 LV, 4%
Obama 50, McCain 46
Sen: Shaheen (D) 52, Sununu (R-i) 46
McCain with a higher favorability rating? Obama only up 9 with independents?
Outlier in NH, and I'll say Obama wins Iowa by about 10.
Posted on October 25, 2008 1:11 AM
NH is the softest of the blue states. This is not an outlier, but is probably at the bottom of the range of likely results.
Big effort required, however, if it is not to sink further.
Posted on October 25, 2008 1:25 AM
Let Mccain dump his last bucks into NH for 4 votes.....and lose!
Posted on October 25, 2008 2:03 AM
Just for good measure Obama should probably swing through NH, IA & PA next week. The battleground states are what they are. I think people have basically made up their minds. With the type of momentum Obama has in those states he will surely pickup more than enough to win the election even without OH & FL.
Posted on October 25, 2008 2:41 AM
The Obama campaign is playing a 50-state strategy, because they are committed to breaking the red-blue state bull****. The strategy has been vindicated.
They want the troops on the ground, wherever they are, to fight for the very last vote because even if there are no EVs there are Senators and Congressmen.
Meanwhile, the campaign has not only Obama and Biden but also the Clintons to deploy. I expect they will make decisions based on the best information their internal polling can provide.
By this stage, we should have a lot of faith in the judgement of David and David :-)
Posted on October 25, 2008 2:51 AM
I don't have access to the internals (too cheap) but would like to see the polling group demos for NH. Obama has clearly out-organized McCain here, and anecdotally (lousy evidence, SSS) a number of Repubs/Repub-leaning Indies have bailed on McCain, largely because of Palin. NH is not a Bible-thumping state.
Posted on October 25, 2008 3:16 AM
Don't have the internals either (same reason), but my reading is that Palin plays very badly but Joe the Plumber plays well in NH. A bit of Clinton attention wouldn't go astray (Bill after all would just be defending his own tax rates).
Posted on October 25, 2008 3:26 AM
johncoz - Clinton will be here in NH next week (HRC).
The Manchester Union-Leader has been a cheer-leader for McCain, only paper with statewide circulation.
Concord Monitor/Research 200 showed Obama +7 with a sample group of 600 (large for a state this size), but the polling ended 10-19, which was also the day that Powell appeared on MTP.
You can find the poll here - don't recall if Pollster reported it: http://www.concordmonitor.com/apps/pbcs.dll/article?AID=/20081021/FRONTPAGE/810210303/1322/NEWS97. There's no detailed demographic data.
Anti-tax positions play well here - a no-tax pledge has been a barrier to entry for gubernatorial candidates.
Posted on October 25, 2008 3:54 AM
Useful info. Thanks, zoot.
Posted on October 25, 2008 4:15 AM
John McCain is VERY popular in NH.
Posted on October 25, 2008 7:31 AM
Another take on why the polls are wrong about Pennsylvania
We believe McCain will win Pennsylvania, and that the polls are oversampling Democrats, overestimating Republicans voting for Obama, underestimating Democrats voting for McCain, and deliberately oversampling the Philadelphia area. The same was true in the primaries, when polls showed Obama winning PA over Hillary Clinton: and we all know what happened there.
Here’s someone else with similar thinking and a great take on this:
The SUSA poll is the most recent, being posted 10/21. It shows Obama ahead by 12, 53% to 41%.
If you dig into the crosstabs of the poll, you find the following:
The party affiliation breakdown is 52% Dem, 41% Rep, 6% Ind.
That is a pretty huge (11%) advantage for the Democrats. Considering the exit polling in 2004 (you remember those, the ones that said Kerry would win?) showed a party ID breakdown of 41D/39R/20I, this result is assuming that about 2 out of every 3 Independents is now a Democrat. Now I know why they do it, because it comes close to the current voter registration numbers, but this assumes that current voter registration will exactly predict voter actions, which has never occurred in PA in the past.
The second interesting item from the poll is party identification support for each candidate. 78% of Democrats are supporting Obama and 18% supporting McCain. Not really unexpected, given the bitter clingers and the PUMAs.
But then we get to the Republicans. 73% of them are supporting McCain and 23% supporting Obama. This doesn’t pass the smell test.
Finally, we can take a look at the regional breakdowns. The SW portion of the state (Pittsburgh) slightly favors Obama (49-46). The West central favors McCain (49-40). South central (Harrisburg) favors McCain (54-41). Northeast (Scranton) slightly favors Obama (48-45). Finally, Obama’s big numbers come from Southeast (Philly) at 64-32. But here is where the sampling gets interesting. The sample takes 41% from SE. SW contributes another 23%. The areas that support McCain only contribute 21% to the sample.
So I don’t live in PA, so I don’t know how the voting distribution really plays out there, but it looks like over sampling from Philly.
You couple over sampling of Dems, over stating Rep support for Obama, and over sampling Philly and you get a badly skewed result.
This explains why McCain is spending so much time in PA, his non skewed internal polls are showing the state is in play.
Note that he doesn’t need PA to win. Bush won twice without it
Posted on October 25, 2008 7:47 AM
Boston Globe NH poll just out
Results for president out tomorrow
McCain was once popular in NH... Certainly not "very" popular today
Posted on October 25, 2008 7:50 AM
Concise boomshak: "everything that has turned PA over to Obama is a mistake by the pollsters."
Keep spinning! Just like a car without Positraction stuck in the mud in Alabama... ;-)
Posted on October 25, 2008 8:38 AM
This is a bone from RAS for repubs. State is 40I/30R/30D from 2004...
Obama now leads 51% to 42% among unaffiliated voters in New Hampshire. He was up 55% to 37% lead three weeks ago. McCain leads by ten among men, while women favor Obama by nineteen (see full demographic crosstabs).
The senate race is confirmation with the UNH poll giving Shaheen a +13 compared to Ras's +5 today...
Posted on October 25, 2008 8:57 AM
Considering that Rasmussen has a slight Republican lean this cycle (not much, but a point or two when compared to the average of other pollsters), this looks pretty good for Obama. I agree that NH is relatively close for the 2004 blue states given how McCain used NH in 2000 to springboard his national credentals, and he resurected his campaign here in 2008 (although if Fred Thompson dropped out four days sooner, Mike Huckabee would have easily won the SC primary, and the race would have been more interesting). However, the days when a Republican could count on NH the same way they could count on their fingers is long gone. Back in 1936, NH and ME were the only states not to vote for FDR.
Posted on October 25, 2008 9:06 AM
NH has an incredible ground game being organized for Obama. In my neighborhood the Obama signs outweigh the McCain signs by 2:1. This state does still have alot of fiscal conservative leanings but the social conservatives of the Republican party has pushed many of us over to the Democratic party this election.
Sorry but you are wrong again. RCP average for PA was 6.1 Clinton which she won by 9.2 much of the additional gap has been attributed to Obama not participating in "street money" which is a tradition in PA especially in the Philly area. As a matter of fact, Ras and PPP(D) were the farthest off on election day. Many of the Clinton voters have moved over to Obama and just in case you missed it the Dems had a massive voter registration drive during the primaries and an additional one after the primaries. They have substantially increased the demographic in their favor.
Posted on October 25, 2008 9:39 AM
McCain probably thinks he has no choice but to pump money into NH. I realized about a month back that at the time NH was to the 2008 elections what FL was to 2000 and OH was to 2004. Let's assume for a minute that McCain, by some miracle, manages to hold on to OH, VA, NC, FL, IN, NV, and MO; all states that he lead in the beginning of October. He needed NH just to achieve a 269-269 electoral college tie at the time.
Of course, that was before the bleeding started. The way things are crumbling around the McCain campaign right now, it's going to take the perfect election day storm for such a scenario to become reality. My gut feeling is that while it's possible for McCain to hold most of the "miracle" states, Virginia is going Obama.
Posted on October 25, 2008 9:40 AM
NH will NOT be that close. The +4 is a mirage. It's at least double that.. and subsequent polls I believe will confirm.
Posted on October 25, 2008 9:49 AM
@Boomshak: Does it ever bother you -- tweak your conscience a little bit -- to be so comprehensively full of ****? You write:
"The same was true in the primaries, when polls showed Obama winning PA over Hillary Clinton."
This untrue. Pollster showed HRC winning by 7.4%:
She actually won by 9.28% -- 1.88% more than the polls suggested, but the polls got it pretty darned close. Are you suggesting that the pollster's methodology was fairly accurate then, but is somehow completely, totally flawed now? They'd have to be off by 7%-13% for McCain to have a *prayer* in PA.
Posted on October 25, 2008 11:42 AM
Yes, I can see where JM is absolutely LOVED by New Hamspshire voters...he's only down 4 points there...good thing they love him so much!
Posted on October 25, 2008 11:58 AM
NH did love MJ, but hey hate Negitive ads, and attacks. This stuff turns off NH voters really quick thats why Obama is winning there. Its only in the last week since we have seen MJ try to turn down the hate from his rallies and this has turn NH towards him a little. But most likely to little to late. Obama will win NH.
That Todd thing is really going to **** him over in PA, and NH. Voters in these states are turned off by negitive attacks on character and lies.
Posted on October 25, 2008 2:59 PM
Rasmussen has consistently been about 2 points skewed pro-Republican.
Posted on October 25, 2008 4:35 PM
"The SUSA poll is the most recent, being posted 10/21. It shows Obama ahead by 12, 53% to 41%.
The party affiliation breakdown is 52% Dem, 41% Rep, 6% Ind."
Boomie? Do you think just because you publish figures they are correct?
But actually SUSA is a bit off in the figures reported:
According to an AP article *dated October 7, 2008) published at Yahoo News (http://news.yahoo.com/s/ap/20081007/ap_on_el_pr/pa_voter_registration), here are some interesting facts released by Pennsylvania's State Department:
"Democratic registration has surged by 13 percent and Republican ranks have shrunk by 1 percent as a record 8.6 million people in battleground Pennsylvania registered to vote in the presidential election.
"Last-minute registrations on Monday's deadline still have to be counted, but the total released by Pennsylvania's State Department already far exceeds the previous record of 8.4 million set in 2004.
"Democrats saw an increase of more than 500,000 new voters in the past year. Republicans watched their ranks shrink by about 28,000.
"Statewide, Democrats outnumber Republicans by nearly 1,170,000 voters. The margin a year ago was about 638,000."
And here is where the information completely blasts your 'facts' out of the water:
"There are at least 4,387,027 Democrats, 3,217,464 Republicans and 995,022 independents and members of minor political parties."
That means there are 8,599,513 registered voters in PA, of which 51% are registered Democrat, 37.4% are registered Republicans, and 11.6% are registered Independent or other party.
So when SUSA says there is an 11 point lead in Democratic registration, it is WRONG. It actually is more than a 13 point lead by Democrats over Republicans in PA.
Posted on October 25, 2008 9:38 PM
The Futility of Class Warfare
By Bradley R. Schiller
Why “us” versus “them” doesn’t sell
The “race card” was once an effective ploy in electoral politics. Southern Democrats long used it to rally white voters. In the wake of the civil rights movement, the Republicans took possession of the race card. Nixon used it to strike fear in the minds of white voters, helping to transform a solid South into a Republican bastion. That card still gets played on occasion. But with white voters receding into the minority in so many jurisdictions, the race card is increasingly viewed as not just an unfair play, but an inefficient one as well (as Hillary Clinton learned).
The preferred ploy of Democrats these days is the “class” card. Democrats have increasingly tried to redefine the “them vs. us” struggle in terms of class rather than color. As they tell the story, economic prosperity is a zero-sum game. Income gains attained by the “rich” come at the expense of the “poor.” Corporations bestow lavish compensation on executive insiders while cutting salaries, benefits, and jobs for hard-working Americans. A massive flow of campaign contributions assures that elected officials will protect and serve the rich, while simultaneously cutting holes in the social safety net. Tax cuts for the rich not only fuel conspicuous indulgence among the elite, but diminish spending on health services, school, and the safety of the poor. It all boils down to “them” (the rich) vs. “us” (the poor and middle class).
All three candidates for the Democratic party nomination played the class card. John Edwards was the most blatant, enshrining his “Two Americas” vision as the central platform of his campaign. That vision became blurred in the glare of his multi-million dollar mansion and $400 haircuts. Hillary Clinton picked up the Two Americas theme, tirelessly railing against the Bush “tax cut for the rich” while bemoaning the stagnation of the working class. Even though she donned working-class duds and even sipped beer in a tavern, her credibility as the standard-bearer for the middle class was not helped by the revelation that she and Bill had taken in over $100 million in just five years. The “class card” has been passed to Barack Obama. He has used it relentlessly to enlist and energize his supporters. In fact, he has made the Bush tax cuts one of the central contrasts between his and McCain’s policy platforms. Ending the Iraq war and reversing the Bush tax cuts, Obama promises, will cure all of America’s problems.
The republican rebuttals to the “tax-cuts for the rich” charge have been anemic. President Bush himself has emphasized that the 2001–03 tax cuts were a timely and much needed stimulus to an economy that was in recession at that time. A “reversal” of those tax cuts would now constitute a tax increase that the macro economy can ill afford. With the economy barely treading water amid vast uncertainty in the financial sector, the weight of a tax increase on aggregate spending could easily plunge the economy into the depths. Even the expectation of a tax increase could put a damper on spending plans, as both Bush and McCain have stressed.
Virtually every economist in the land would agree with these macro assessments. Liberals would have preferred more progressive tax cuts — or even increased social spending — as stimulus tools. But there is no question that the Bush tax cuts were stimulative and that ending them would have a contractionary impact on the economy. Unfortunately, the intricacies of macro theory don’t resonate with the general public. There is still a tendency to view the tax take-back as a free lunch, paid for by the overindulgent and undeserving rich. So the otherwise compelling macro agreement for leaving the tax cuts in place doesn’t win the electoral pr battle.
The second Republican rebuttal is equally true but just as anemic. President Bush has argued repeatedly that the 2001–03 tax cuts were proportionately greater for the middle class than the rich. In percentage terms, he is absolutely right. According to the Congressional Budget Office, the Bush tax cuts reduced middle-class tax bills by an average of 15 percent. By comparison, high-income taxpayers — those in the top 20 percent of the income distribution — got only a 10 percent tax break.
Although accurate, this percentage distribution of tax breaks fails to repel the Democrats’ contention that the Bush tax cuts overwhelmingly favored the rich. The Democrats have successfully portrayed the distribution of tax breaks in absolute terms rather than percentages. They note that the rich got an average tax break amounting to $30,000 for the years 2001–10, while the middle class got an average tax break of only $5,400. Low income households got a measly $744. Those are the kinds of statistics that capture voters’ attention.
The simple arithmetic of tax burdens explains the enormous difference in tax breaks. The richest 20 percent of U.S. households pays a whopping 86 percent of federal income taxes. Their average tax bill amounts to $34,000. By contrast, the middle class (middle quintile) pays only 4.5 percent of federal income taxes, with an average bill of only $2,000. Low-income households, on average, pay nothing. Since people who pay little or no taxes can’t really get a further tax break, tax cuts must overwhelmingly favor the rich.
The arithmetic of tax cuts doesn’t get much pr traction. Yet, the Democrats still haven’t won the game with their class card. Opinion polls not only register continued opposition to tax hikes in general, but also substantial skepticism about raising taxes on the rich. Remarkably, the public is even overwhelmingly opposed to raising the federal estate tax — a levy that truly affects only the very richest U.S. households.
The truth about economic class
What frustrates theDemocrats’ use of the class card is the fluidity of class boundaries in the United States. Successful use of a splintering card requires a clear delineation between “them” and “us.” The race card has a physiological advantage in that regard. But the class card has no such evident demarcation. First of all, perceptions of “rich,” “poor,” and “middle class” keep changing. Luxury items that were once hallmarks of the rich often evolve into “necessities” for the middle class (e.g., flat-screen tvs, global positioning systems, even air conditioning). Second, and more importantly, the ranks of the “rich” and “poor” keep changing. With the exception of Michael Jackson, people rarely change their color — or even try to. But people do change their economic status with amazing frequency. So it’s never entirely clear who’s with “them” and who’s with “us.” Which makes it very difficult to wage class warfare.
Escaping Poverty. Democrats want us to believe that a large section of the U.S. population is trapped in poverty and/or toiling at minimum wages just above official poverty lines. This is presumed to be the core constituency of the “us” team — the people who are permanently left behind as the economy grows and incomes of the rich rise to dizzying heights.
Superficially, the notion of a permanent underclass appears to have some credence. When George Bush took office, there were roughly 33 million poor Americans. Since then, the economy has grown by more than 20percent. But the government itself still counts over 37 million Americans as poor. So it looks like all the benefits of economic growth went to “them,” not “us.”
Two out of every three households that fall into poverty in any given year escape poverty the following year.
But this impression is deceiving. First of all, the U.S. population keeps growing. In the last eight years alone, the U.S. population has increased by more than 20 million people. So there are more people at every point in the income distribution, including its lowest points. What really matters is the incidence of poverty in this growing population. By that measure, poverty increased only modestly between 2001 (11.7 percent) and today (12.5 percent).
Any increase in the incidence of poverty is unwelcome. But much of that increase was fueled by immigrants. Every year at least 1 million immigrants enter the United States, both legally and illegally. Most come seeking work and higher pay. Overwhelmingly, they enter our labor markets at the low end of the wage scale. They are “poor” by American standards even if significantly better off than they were in their home countries. Since Census surveys don’t differentiate between legal and illegal immigrants, these immigrants become part of America’s poverty population. As homeland security concerns have tightened border security, these poor immigrants have remained in the United States longer (rather than risk multiple entries). The incidence of poverty among immigrants is about 25 percent higher than among nonimmigrants.
The influx of immigrants into the poverty population creates substantial churn in the “us” ranks. As past immigrants climb out of poverty or return home, they create a net outflow from the “us” ranks. This outflow is augmented by the ever-changing circumstances of the native-born poor. People fall into poverty for a variety of demographic and economic reasons. Job loss, divorce, and injury top the list of poverty-creating forces. Even in the best of economic times, these forces push people into poverty. But they don’t necessarily keep people in poverty. Divorced moms hook up with new partners. Dependent children grow up. Unemployed workers find jobs. Injuries heal. So there is a constant outflow of poverty households as well. In fact, two out of every three households that fall into poverty in any given year escapepoverty the following year. In other words, most American poverty is temporary, not permanent. Less than 2 percent of America’s poverty population is poor for as many as ten consecutive years.
Moving up from minimum wage. Another rallying point for the class-warfare strategists is the minimum wage. Democrats decry the fact that the federal minimum wage stays so far below average wages. Even with the recent wage hikes (to $6.55 this July, $7.25 next year) minimum-wage workers won’t be able to keep a family of four out of poverty. Working long hours at such dead-end jobs supposedly solidifies the position of minimum-wage workers in the “us” ranks.
A subset of jobs in the U.S. labor market will always pay low wages; but few workers get stuck in those jobs.
The assignment of minimum-wage workers to the ranks of the downtrodden is at odds with the realities of minimum-wage experience. Most young people do in fact have first jobs that pay wages at (or below!) the federal minimum wage. Even Brad Pitt started at that level, hawking fast food in a chicken costume. But those entry-level jobs don’t last long. Two out of three minimum-wage entrants are consistently earning wages above federal thresholds within two years of labor-market entry. After three years, only 15 percent of minimum-wage entrants are still toiling away at such low wages. There may be a subset of jobs in the U.S. labor market that will always pay low wages; but few workers get stuck in those jobs. The low-wage entrants into the “us” ranks move out and up. The few who stay at dead-end jobs are by far the exception, not the rule.
Rags to Riches? The relative absence of permanent poverty implies that the “us” ranks are pretty fluid. In extreme cases, people at the very bottom of the income distribution even move to the very top. Horatio Alger stories are more common than most people recognize. Oprah Winfrey — one of Obama’s most visible and ardent supporters — herself rose from the bottom to the very top of the food chain. Bill and Hillary Clinton made a similar move. Obama himself didn’t start so low nor rise so far up the income ladder, but he clearly joined the ranks of “them” when he started collecting million-dollar book royalties. When these self-appointed champions of “us” play the class card, they must be biting their tongue.
Turnover at the top. Oprah’s ascension from poverty to the pinnacle of wealth reveals that even positions in the ranks of the rich aren’t permanent. Every year Forbes magazine compiles a list of the richest 400 Americans. The “Forbes 400” always arouses a lot of envy, energizing class warfare strategists. You needed at least $1.3 billion in assets to join the Forbes400 club this year. With the median U.S. household having net assets of less than $200,000, the Forbes list underscores the gap between “us” and “them.”
But there’s another dimension to the Forbes400 that gets little attention — the turnover in its ranks. Among the top 100 people on this year’s Forbes list, fewer than 50 were on that list at all eight years ago. As in other years, there was a rash of newcomers who had made their fortunes in technology, investments, and entertainment. Some, like Oprah, had roots in poverty; most emerged from the “struggling” middle class that Hillary and Obama bemoan. They switched sides in the projected class warfare.
Mobility in the middle. The most newsworthy team-switching occurs at the very top and bottom of the income distributions. But there is a lot of income mobility in the middle of the distribution as well. The Social Security Administration tracks people’s wages throughout their working life so as to compute an individual’s retirement benefits. Those earnings histories allow one to ascertain where a person resides on the income ladder in any given year and to observe how often people change relative rankings over time. Successful deployment of the class card depends on people staying on the same income rungs over time, thus maintaining a clear delineation between “us” and “them.”
In reality, people don’t stay on the same rungs very long. A great deal of upward mobility accrues to experience. Like the minimum-wage entrants, the typical worker’s productivity tends to increase with experience. As a result, wages tend to increase with age. This age-experience momentum is what transforms a lot of “us” into “them.”
All incomes don’t increase at the same pace, of course. Within any given age group there is another mobility phenomenon. Some people rocket up the income ladder; others take a tumble. Cyclical forces, technological breakthroughs, diverse investments, and pure luck all contribute to this intra-cohort income volatility. Think of successive high school reunions. At graduation, some seniors are picked as “most likely to succeed.” One of the reasons we go to the reunion is to discover who really fared well — and who didn’t. If you go every decade you’ll be surprised how the line-up changes. The quiet nerd who everyone tagged as a loser just sold his hi-tech start-up for millions of dollars. The math wiz is on probation for computer fraud, and that wannabe real-estate tycoon is now working at Wal-Mart. Such dramatic reversals of fortune are witnessed at virtually every reunion. The recent turmoil in financial markets is sure to produce even more reversals of fortune at the next one.
Social Security earnings histories document these intra-cohort changes in income position. Over a 15-year period, 70 percent of the workforce changes relative income position. The average move is 20 percent up or down the earnings hierarchy. Less than half of the workers who are at the top of the wage heap in one year are still at the top 15 years later. The same pattern is evident on the lowest rungs of the ladder: Only 35 percent of the workers who were at the bottom 15 years ago are still in the lowest position now. This kind of musical-chairs mobility is what makes school reunions so much fun. This same intra-cohort mobility further blurs the distinction between “us” and “them.”
Mobility expectations. The phenomenon of income mobility is so pervasive that it is near impossible to rally an army of “us” to do battle with “them.” The task is made even more difficult by even loftier expectations of switching sides. Public opinion polls reveal that a lot of average citizens expect to get rich. According to recent polls, one out of three American adults expects to be rich some day. If the “us” people expect to be among “them” in the future, they are certainly not going to rally to the side of “soak the rich” proponents today. Why raise income or estate taxes that might come back to bite you after you finally make it? This pervasive belief in the American Dream — the notion that everyone has a shot at the brass ring — is the most formidable constraint on the effectiveness of the class-warfare card.
The middle-class “squeeze”? The back-up strategy for playing the class card is to bemoan the economic stagnation in the ranks of “us.” Even if one concedes considerable fluidity across class boundaries, one can still excoriate the forces that depress the well-being for those residing (even temporarily) in the “us” ranks. You can’t win elections without the mainstream, middle-class vote. So promising a chicken in every pot is always an effective strategy. If you can convince voters that the pot will otherwise remain empty, this strategy takes on a sense of electoral urgency. That is why Obama and Clinton regularly depicted the middle class as “struggling.” As they tell the story, middle-class working families (the largest voting bloc) have actually seen their incomes decline in the past eight years. Hillary repeatedly referred to “seven years of stagnant wages, declining incomes and increasing inequality.” Obama echoed this theme by repeatedly bemoaning the “middle-class squeeze.” Voting for Obama, they contend, is the only way to raise working wages, increase health benefits, reduce tuition costs, and maintain home ownership — i.e., reverse the Bush-led economic decline of the working class (“us”).
The current slowdown in the U.S. economy and the crisis in the finance sector has made audiences more receptive to the “struggling middle class” thesis. As gdp growth has slowed, so has wage and income growth. But the economy has not yet receded into recession: Household incomes and wages continued to creep upwards even in this economic slowdown. Over the longer term of the last eight years or so, the economic status of the middle class has risen significantly.
Distorted Census pictures
Obama and clinton scoff at the notion that the middle class has experienced economic gains during the Bush years. In rebutting that claim, they point to the government’s own statistics. Hillary’s favorite statistic is the median household income. According to the U.S. Census Bureau, the median household had an income of $50,233 in 2007 (the most recent year available), only a few hundred inflation-adjusted dollars more than it had in 1998
Household splintering. The statistical foundation for the “stagnation” thesis is not as definitive as Obama and Hillary would have us believe. The Census data originate from an annual survey of households. The data do not track individual households from year to year, but instead just take a snapshot of the households in existence in March of each year. From these annual snapshots, we try to infer what is happening to the typical household over time.
Back in 1970, 71 percent of all U.S. households were two-parent families. Now the ratio is only 51 percent.
The “typical” household, however, keeps changing. Since 1970, there has been a dramatic rise in divorced, never-married, and single-person households. Back in 1970, the married Ozzie and Harriet family was the norm: 71 percent of all U.S. households were two-parent families. Now the ratio is only 51 percent. In the process of this social revolution, the average household size has shrunk to 2.57 persons from 3.14 — a drop of 18 percent. The meaning? Even a “stagnant” average household income implies a higher standard of living for the average household member.
A closer look at household trends reveals that the percentage of one-person households has jumped to 27 percent from 17 percent. That’s right: more than one out of four U.S. households now has only one occupant. Who are these people? Overwhelmingly, they are Generation Xers whose good jobs and high pay have permitted them to move out of their parental homes and establish their own residences. As any parent knows, this transition can bring joy and relief to both parties. But it depresses statistics on average household income. Suppose a 20-year old child leaves the home of a $60,000 family. She moves into her own apartment and takes a $20,000 a year job at Starbucks. Presumably, everyone in this picture is better off, both economically and psychologically. But the Census data won’t reflect those gains. Instead, they will show that the average
The same kind of statistical distortion occurs when Baby Boomers retire. Early retirement is made possible by rising wages, benefits, and asset values: it is a byproduct of rising affluence. Earlier generations couldn’t afford to retire early. In fact, they often worked until they died, “dying with their boots on.” Statistically, working until you expire buoys statistics of median household incomes; retiring early depresses them.
To the extent that retiring seniors flee their extended families and establish their own residencies, the Census statistics on median incomes decline still further, and for the same reasons. All these transitions are evidence of rising affluence, not increasing hardship. Yet this splintering of the extended family exerts strong downward statistical pressure on the average income of U.S. households. Had the Generation Xers and their affluent grandparents all stayed under the same roof, the average household income would be higher, but most of us would be worse off.
Those immigrants again. Another depressant on household income statistics (but not actual incomes) is that continuing influx of immigrants. As noted earlier, these immigrants overwhelmingly enter at the lowest rungs of the income ladder. Although there is an ongoing and intense debate about whether these immigrants take jobs away from American workers, the statistical impact is unambiguous: measured median and average household incomes decline as immigrants enter the country. The same kind of thing happens when Clinton or Obama enters a working-class tavern: The average income of bar patrons goes up even though no one’s income actually increases. Now imagine what happens to the average income of the bar patrons when an immigrant farm worker walks in. With over 1 million immigrants coming in to the economy each year, this statistical distortion is significant.
Rising standards of living
All these statistical complications imply that Obama’s “middle-class squeeze” is substantially exaggerated. The typical American household has in fact experienced a rising standard of living over the past eight years, the current macro slowdown notwithstanding. The total output of the economy — the economic “pie” from which we all draw slices — has grown by over $4 trillion per year since 2000. The Obama/Clinton stagnation thesis implies that the rich got all this added output. “They” got ever-larger slices of the pie while the rest of “us” got smaller portions every year. Were that true, “they” would be phenomenally rich. If all the added output had gone to the top 10 percent of U.S. households, then their incomes would have increased by a whopping $350,000 per household. Yet, the Census Bureau tells us their average income (including recent increases) is closer to $200,000. So “they” didn’t confiscate all the economics gains of the last eight years. A good many of “us” got larger slices of the pie as well.
That broad swath of economic advancement shows up in personal consumption. According to the Labor Department, personal consumption spending has risen by $2.5 trillion since 2000. More Americans own homes and new cars today than ever before, despite slowdowns and financial crises in both industries. Laptop computers, iPhones, and flat-panel tvs are fast becoming necessities rather than luxury items.
Self-assessed gains. The average American isn’t oblivious to these economic gains. In the 1980 election, Ronald Reagan asked voters to decide whether they were better off at the end of the Carter administration than they had been at its beginning. Bill Clinton used that same pocketbook ploy to win the 1992 election. In both instances, a late-term recession turned the answers negative.
Polls now register increasing anxiety about both the future of the economy and personal finances. But even in the midst of this economic insecurity, most voters realize they are better off today than in earlier years. According to the most recent Pew Research surveys, two-thirds of all adults recognize that they are better off than their parents were. A plurality also claims they are better off now than five years ago, despite the current slowdown. A majority of Americans told Gallup they expect to be better off financially next year.
Trumping the class card
The economy iscertainly not a strong suit for Republicans this year. As Professor Ray Fair of Yale University has documented, voters do vote their pocketbooks. Or, as Bill Clinton’s campaign more famously proclaimed in 1992: “it’s the economy, stupid!” According to Professor Fair’s more detailed calculations, only a “Good News” quarter of per capita gdp growth above 3.2 percent can salvage a Republican victory this year. But, clearly, the Democrats are not willing to place all their bets on the (weak) performance of the macro economy. They are hedging their bets by playing the class card — making the election look like an epic struggle between “us” (the vast middle class and poor) vs. “them” (the rich). It is a hedge that so strains credulity that it might just end up costing them the game.
Bradley R. Schiller is a professor of economics at the University of Nevada-Reno and American University. He is the author of The Economy Today (McGraw-Hill, 2008) and The Economics of Poverty and Discrimination (Prentice-Hall, 2008).
Posted on October 25, 2008 11:11 PM
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