Presidential candidates who have secured party support ahead of a general election have traditionally taken ideologically center-center positions on economic policy issues to appeal to middle-class moderates in both parties.
Not so in 2024.
Economic messaging from both Democrats and Republicans has targeted lower-income voters and struck an overtly populist tone as candidates scramble to appeal to polarized voters in key battleground states.
The Democratic National Convention, which concluded on Thursday night, featured policy proposals focused on household finances, including measures to reduce the costs of food, health care and housing.
The overall message was one of fiscal sympathy, in stark contrast to the lofty expounding of party platforms that has typically characterized past party conventions.
“This is not a move to the center at all,” Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, a Washington think tank, told The Hill.
“They’re hoping to appeal to about 5, maybe 7 percent of undecided voters in seven battleground states, many of whom are not middle class but people who feel alienated — young people, minorities, people who are not happy with their economic situation,” he said.
Vice President Kamala Harris’ economic proposals include a federal ban on unfair food price gouging, mechanisms to reduce the costs of insulin and other prescription drugs, and new ways to forgive medical debt.
She also proposed a comprehensive new construction plan for affordable housing, which has been in short supply in the United States for more than a decade and has become even worse amid widespread pressure on housing caused by a recent series of interest rate hikes by the Federal Reserve.
“By the end of my first term, we will create 3 million new homes and rental units that the middle class can afford and eliminate America’s housing shortage,” Harris promised. “I will make sure these homes actually go to working-class and middle-class Americans, not just to investors.”
Senate Democrats have emphasized Harris’ message about basic expenses and the financial stresses facing households, touting her expansion of a tax credit program that has helped low- and moderate-income families during the pandemic.
“Her economic policies target spending that will hit American families hardest,” Senate Finance Committee Chairman Ron Wyden (D-Ore.) said in a statement Friday. “Vice President Harris will [the child tax credit]It will lift millions of children out of poverty and provide extra support to families during the first years of life when expenses are highest.”
The proposal to ban food price gouging drew an immediate critical response from business groups and traditional economists, who likened it to price controls and warned that it could be counterproductive.
“We’ve seen these kinds of proposals for government price controls before, but there’s a reason they’ve never been implemented: because they would make the problem worse,” the U.S. Chamber of Commerce business lobbying group said in a statement Friday, without mentioning Harris’ plan by name.
Kent Smetters, an economist at the University of Pennsylvania, told The Hill that price controls can lead to shortages because companies are reluctant to produce goods that they don’t make a profit on. He pointed to gasoline price caps and rent controls on public housing as examples of shortages.
“If you can’t charge a fee, you stop,” he says. “There aren’t many economists who would say it’s effective.”
Hufbauer made much the same argument. “This shouldn’t be serious policy. How do you define it?” he said. “If we did something serious, we would have shortages and black markets.”
Lindsay Owens, an economist and executive director of the progressive think tank Groundwork Collaborative, said Harris’ price-gouging plan mirrors a Federal Trade Commission report earlier this year that identified excessive profits in the grocery industry and should not be viewed as a form of government price control.
“These are not price controls,” she told the CNBC television network on Monday. “Forty states have anti-price gouging laws. These are Republican states, these are Democrat states.”
Republicans have so far steered clear of any measure that could be considered a price cap, but they have leaned toward a more populist message on economic policy throughout the 2024 election cycle.
Throughout the Republican National Convention, the Trump campaign focused on issues that particularly pertain to low-income voters, with the former president pledging to repeal the tip tax on service sector workers and implement a sweeping tariff program aimed at creating more jobs and raising wages in the country.
“I got the information from a very clever waitress. It’s better than spending millions of dollars.” [on political consultants]”Let me ask you a question: Would you be happy if there was no tax on tips? And I said, ‘That’s a great idea,'” Trump said at the party convention in July.
President Trump has also spoken of major immigration restrictions, along with a “mass deportation campaign” ostensibly aimed at protecting American workers and raising wages.
Economists and business groups are as concerned about Trump’s proposal as they are about Harris’s, if not more so, with the libertarian Cato Institute saying: publicly denounce them.
Trump’s proposed 10% general tariffs are “economically ignorant, geopolitically dangerous and politically misguided,” Scott Linthicum, director of the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Research, said in a 2023 policy brief.
Republicans, who were fierce critics of tariffs before Trump became the party’s standard-bearer, say the tariff policies enhance his image as a “working-class president.”
Sen. Kevin Cramer (R-N.Y.) reflected on a meeting he had with Republican senators in June, telling reporters that Trump’s image had come up as a topic of discussion, particularly his interaction with a Nevada waitress who came up with the idea to end the tip tax.
“He talked about how he came up with it, which was in a statement by Tim Scott that he was going to be a ‘working class president’ and someone who would speak to them and speak for them. Chip’s story was genius,” Cramer said.
Despite concerns from economists and policy traditionalists, economic activity at the lower end of the income spectrum may have been a crucial factor in Democrats fending off a Republican “red wave” and retaining control of the Senate in the 2022 midterm elections.
Low-income workers are on track to see big wage increases between 2020 and 2022, thanks to a massive federal economic stimulus package and the best working conditions in years that give them the ability to switch jobs and get raises.
The increase in low-wage workers, known as “wage compression,” First identified by researchers At the University of Massachusetts, Amherst.
“It is difficult to overstate how big a change this is from the previous four decades of low-wage quasi-stagnation (and a disastrous recovery from the Great Recession),” University of California economist Gabriel Zucman wrote in 2022.
