Are-You-Better-Off: 2016 Update

The 2016 US Presidential campaign has gotten so crazy that the term “silly season” just doesn’t do it justice. In a September 2012 article on ng, I asked the question “Are you better off today than you were four years ago?” Eight years ago, the answer in the swing states was clearly “no” as I described it then:

“Comparing the swing states not to their conditions four years ago, but how they might feel compared to the rest of the nation, Virginia, Colorado and New Hampshire appear to be “better off” than the average American. But in North Carolina, Florida and Pennsylvania, prices for the basic necessities are above the national average while median incomes are lagging. If consumer confidence translates into voter confidence, then the elections in some of the key swing states will belong to the Republicans in 2012.”

Indeed, in November 2012, despite winning the White House, the Democrats, lost nearly every contested race for seats in the Senate while also losing governorships and seats in the House of Representatives.

This time, the economic picture is less clear. States like Colorado are doing well: despite a higher than national average cost of living, their median income is even higher by comparison and the unemployment rate is more than 20% below the national average. Although they were enjoying the same higher incomes in 2012, their unemployment rate then was at the national average – higher by comparison than in 2016. In contrast, Nevada is clearly worse off now than they were in 2012 – unemployment remains high, above the national average. The cost of living stands 6% above the national average while the median income has fallen from slightly above the national average to a little below. With the exception of Wisconsin, every swing state is worse off going into this election than they were going into the 2012 election . In the table, we use red figures to indicate where conditions in the swing states worsened relative to the national average between 2012 and 2016, either a reduction in relative state median income or an increase in relative unemployment (expressed as a percent of the national average).

Unemployment from BLS.gov, median income from Census.gov

Only 4 of the swing states have both cost of living and median income above the national average (Virginia, New Hampshire, Colorado and Iowa). In the other six, the cost of living index is above the national average while the median income is near or below the national average. A lot of Republican voters may be thinking it is time for a change. The Republican pundits will want to blame Donald Trump for “down ballot” losses. Trump seems unconcerned about working with a majority of Democrats in Washington. If the change in Congress occurs, it will more likely be the result of these poor economic conditions in the states than anything specifically that Donald wished for or caused.

Cost of living overall from Payscale.com for major city in each state. Unemployment from BLS.gov, median income from Census.gov.

In an April 2009 NG article, I compared measures of economic well-being before and after passage of the Emergency Economic Stabilization Act of 2008, more commonly known as the Bank Bailout Bill. Then Treasury Secretary Hank Paulson assured Congress who in turn assured voters that they would improve “the economic well-being of Americans.” The numbers showed a very different story. We were, in fact, largely worse off in the first six months after the bill passed. Between October 2008 and April 2009, foreclosure rates were no lower, unemployment was higher and the stock market pretty much tanked.

Looking at the same data again, I think it is pretty clear that the US economy is in an improved condition, across the board. By every measure, we are also even a little better off than this time last year.

2008 figures are as close as possible to passage of the Bank Bailout Bill (October 3, 2008); the date of the 2009 figures varies slightly by category from February through April 2009. 2015 data are May and 2016 are August. Unemployment and foreclosure rates by state were available at Stateline.org for 2008 and 2009; more recent national and state unemployment rates are available from BLS.gov; foreclosure rates are also available from Realtytrac.com. Dow Jones Industrial Average from Google Finance.

What this means is that the national voter (meaning that majority that usually carries the Presidential election) will be answering the lead question with “yes” – yes, I have been made better off with a Democrat in the White House than I was with the last Republican in the White House. If Democrats take the White House in November, they are likely to take the House and the Senate down ballot.

Susanne Trimbath, Ph.D. is CEO and Chief Economist of STP Advisory Services. Dr. Trimbath’s credits include appearances on national television and radio programs and the Emmy® Award nominated Bloomberg report Phantom Shares. She appears in four documentaries on the financial crisis, including Stock Shock: the Rise of Sirius XM and Collapse of Wall Street Ethicsand the newly released Wall Street Conspiracy. Dr. Trimbath was formerly Senior Research Economist at the Milken Institute. She served as Senior Advisor on United States Agency for International Development capital markets projects in Russia, Romania and Ukraine. Dr. Trimbath teaches graduate and undergraduate finance and economics.

Top image by DonkeyHotey (Hillary Clinton vs. Donald Trump - Caricatures) [CC BY-SA 2.0], via Wikimedia Commons