IT’S the economy, stupid. It’s an issue that consistently ranks among the most important to voters in elections all over the world. In the run-up to this year’s Westminster election, a YouGov poll found that the cost of living and “the economy in general” were the first and third most important priorities for the UK public.
In exit polls across the US last week, the economy was consistently found to be in the top two issues for the American public, alongside the state of democracy.
In the US this year, many polls found the economy to be at its most important for Americans since the financial crash and recession in 2008 – and consistent polling found that voters trusted Donald Trump on this vital issue more than they trusted Kamala Harris, a fact which will have played a key role in winning Trump the election.
It would be easy for us to sneer at Americans for trusting Trump with their nation’s finances over Harris – not least when many of the main metrics by which the economy is measured are all doing relatively well under the Biden administration.
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From unemployment, to the stock markets, to job creation and falling inflation, the US economy has grown well under Biden and is in fairly good shape just now – at least on paper, that is.
The fact is, to most working-class Americans, these metrics are meaningless. For most people, the facts are thus: they feel poorer today than they did four years ago under Trump. Inflation may be falling just now, but all that means is that the rate at which prices are increasing is going down – so the prices are still going up, up, up.
The cost of living continues to increase, while wages remain stagnant. The federal minimum wage in the US is just $7.25, or roughly £5.63. The last time this was increased was more than 15 years ago in 2009. As Vermont senator Bernie Sanders – an independent with ties to the Democratic Party – pointed out in response to last week’s presidential election, wages for the average American worker are lower in real terms today than 50 years ago.
Wealth inequality continues to grow, with the rich getting richer, extracting more and more wealth and labour from the working classes. Of course, a second Trump presidency will only make this worse, but would a Harris presidency really have made things better?
On the economy in particular, both Trump’s and Biden’s presidencies were affected by factors outwith their control, not least the Covid-19 pandemic for the former and the policies of their predecessor for the latter.
Wealth inequality soared during Trump’s first term in the White House, with the billionaire’s policies deliberately redistributing wealth from the poor to the rich.
But Biden took minimal steps to redistribute that wealth back, failing to impose his promised “billionaire tax”, failing to increase the federal minimum wage and failing to stop the ultra-rich from gouging cash from ordinary Americans through sky-high grocery prices, rent and health insurance.
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To further quote Sanders’ statement on the election result: “It should come as no great surprise that a Democratic Party which has abandoned working-class people would find that the working class has abandoned them. While the Democratic leadership defends the status quo, the American people are angry and want change.”
It wouldn’t have mattered what the actual policies of Trump were on the economy – Americans saw this election as a choice between the vice-president under whom prices have soared and wages have stagnated, or the guy from four years ago when things were still rough, but at least more affordable than now. The point is, no matter what metrics you use to measure the state of the economy, what actually matters to voters is how it’s going to affect their quality of life.
Ironically here in Scotland, this is exactly what the Scottish Greens have been saying for years, yet have been derided for doing so by other parties who want to prioritise growth above all else.
Greens believe that measuring economic success by GDP and nothing else is meaningless. GDP could be soaring, but is meaningless to the average person if that wealth isn’t distributed equally.
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As long as we measure the economic success of a nation only by the single metric of growth, we do an injustice to the population who generate that nation’s wealth.
The concept of a wellbeing economy focuses not just on growth, growth, growth, but on the quality of life of the nation’s population. This includes things like our health, our rights, our environment – these are surely far more tenable measures of a nation’s success and far more meaningful to its people than growth at all costs. Wages should be at such a level that working people can thrive, not just survive from paycheque to paycheque.
The intrinsic value of human life goes far beyond just a person’s economic activity, and yet our current system seeks to punish the economically inactive to the point of destitution – even those who can’t work due to disability or illness.
Whether it’s the Biden administration in the US, or the Keir Starmer or John Swinney governments in Westminster and Holyrood, the election last week should prove to all governments that being able to point to positive metrics on the economy is meaningless to voters if it has no easily discernible impact on their quality of life.
While it’s welcome that the new Labour government in Westminster has committed to increasing the minimum wage to “a genuine living wage”, starting with an increase to £12.21 this April, this is a small step when the cost of things like housing and other necessities has soared above inflation in recent decades.
Redistributing wealth to put more cash directly in the pockets of working people is a critical first step, but it must be paired with huge investment in public services and measures like effective price caps and rent controls to bring down the cost of essentials.
In the US and the UK, two of the richest countries in the world, we can do this with the existing wealth being hoarded by the ultra-rich. Anything less would be a betrayal of working people and will find governments in Westminster and Holyrood going the same way as the Democrats across the Pond.
If they want to avoid this folly and start measuring the economy in a way that actually means something to voters, there’s a simple solution: it’s the wellbeing economy, stupid.
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