Lehrer: Increasing Americans’ income should be the election’s focus

Eli Lehrer

Submitted photo

In the final debate of the 1980 election, Ronald Reagan posed a simple question: “Are you better off than you were four years ago?” This question resonated with many voters, highlighting the challenges of President Jimmy Carter’s term — unemployment had reached 8%, inflation 13.5%, and inflation-adjusted household income declined. Following this, Reagan, trailing in the polls, surged ahead and won in a landslide.

As the 2024 election looms, Reagan’s question presents a significant challenge for those wanting to continue the Biden administration policies. During Donald Trump’s term, median household income rose, but it declined under President Biden. This decline allows Trump and Kamala Harris to articulate their economic visions. History shows that the candidate who does this most effectively will gain a political advantage.

The median household income is the best single measure of Americans’ financial well-being. It reflects the household’s income precisely in the middle — half are wealthier, and half are poorer. Therefore, it isn’t skewed by the accumulation of great fortunes at the top. Contrary to popular belief on the left and right, median household incomes have improved over the past few decades, rising from under $57,000 in 1984 to about $78,000 at their high point in 2019.

Since then, the COVID-19 pandemic, inflation and modest overall growth have reduced them to a little under $75,000. 

Had Trump been an ordinary president operating in ordinary times, this record of rising household incomes would have delivered him the presidency. Since World War II, every incumbent president who delivered increasing median household incomes won reelection. As such, Trump would be expected to emphasize his economic record on the campaign trail.

Instead, he has been more focused on deriding Harris as “communist,” a label that might well alienate swing voters. While Trump promoted higher household incomes in his 2020 campaign, he’s been largely silent on the issue lately. The reason for this is unclear, but acknowledging it would require admitting the upward trend began under President Barack Obama and that most people are better off today than in the supposed past era of “greatness” that Trump often evokes.

This opens the door for Harris to offer a compelling alternative to Trump and Biden. In fact, Trump’s combination of massive spending and trade protectionism — both of which have continued under Biden — has contributed to the rising inflation that has eroded real incomes. Returning to the free-trade positions traditionally supported by progressive presidents from Woodrow Wilson to Bill Clinton could help Harris distinguish herself from Trump and move away from her unworkable calls for price controls. 

While neither party shows much interest in fiscal restraint, Harris could appeal to her base by defending the significant energy and infrastructure spending signed into law by Biden while holding off on other big expenditures for now. Fiscally conservative figures like former California Gov. Jerry Brown and former president Bill Clinton have found that short-term spending restraint combined with sound economic policy can supercharge growth, enabling more substantial spending in the medium term. 

However, like Trump, Harris has reasons to avoid this approach. Some of these actions would involve distancing herself from the current president and could alienate a Democratic voting base that is skeptical of free markets and open trade. Still, it may be a risk worth taking. A deeply polarized electorate isn’t likely to abandon Harris over trade policies alone, and defending Biden’s achievements should count for something with those constituents.

Economic well-being often decides elections, and policies that might increase household incomes should be a focal point for both candidates. Harris and Trump stand to gain if they focus more on how their policies can deliver rising incomes for Americans right in the middle.

Editor’s note: Eli Lehrer is president of the R Street Institute. Reader reactions, pro or con, are welcomed at AzOpinions@iniusa.org.