President Obama will take the stage in his hometown of Chicago Thursday to tout the United States’ economic recovery and reassure voters ahead of November’s election that, despite the turmoil abroad, he has not forgotten about the need to offer a positive economic agenda.
But he faces a major challenge in communicating that the economy is on an upward trajectory: Most families’ incomes are barely growing, if they’re growing at all.
In an interview with “CBS Sunday,” Obama acknowledged that most Americans are skeptical that the country’s economic fortunes are improving, a reality reflected in poll results suggesting that most believe the country is still in a recession. “They don’t feel it,” Obama said of the recovery. “And the reason they don’t feel it is because incomes and wages are not going up.”
Median household incomes, adjusted for inflation, are 8 percent below their level before the financial crisis in 2007, the Bureau of Labor Statistics reported in September. More recent data show that wage growth has been running just fast enough to keep pace with inflation in 2014, even as the unemployment rate has fallen dramatically and monthly job creation has accelerated.
As Obama speaks at the Kellogg School of Management at Northwestern University on Thursday, knowing that his personal unpopularity is a liability for his party in November, he will have to convince voters that the recovery is real and that he will act to see it translate into income growth for families.
White House press aides said the president will speak about the economy generally, but also about specific measures he is pushing to make the recovery benefit the middle class. “There’s no quick fix, but there are common-sense things Washington can do right now to help create jobs and raise wages,” wrote senior adviser Dan Pfeiffer in an email previewing the event.
Those items are likely to be legislative efforts that voters have heard about ad nauseam over the year. Economic adviser Jeff Zients listed “closing tax loopholes, expanding educational opportunities and raising the minimum wage” as key agenda items in a recent blog post boosting the administration’s response to the financial crisis.
“As you know, nothing major is going to get done this year. So it’s a way of distinguishing where Democrats are,” said Gabe Horwitz, the director of the economic program at Third Way, a centrist think tank.
“The key is going to be: Does he focus on a broad vision, or does he just focus on one or two specific points that differentiate Democrats from Republicans?” Horwitz said, adding, “I think there’s a story to tell and there’s a positive agenda about growing jobs and also making sure that Americans have a safety net.”
Obama “probably needs to change the subject” to redirect voters’ attention away from his management of foreign affairs and other hot-button issues such as illegal immigration, said Karlyn Bowman, a public opinion analyst at the American Enterprise Institute.
While the majority of the country disapproves of the president’s handling of the economy and his ratings have slipped over the year, his approval rating on foreign policy has fallen much faster in recent months as the Islamic State has grown in power and Russia has threatened Ukraine. Nearly 57 percent disapprove of Obama’s management of foreign affairs, according to the RealClearPolitics average of polls, while just 36 percent approve.
“The White House team probably recognizes that the public has been lagging in terms of believing the economy is improving,” Bowman said. “I think the president has to make that case.”
In particular, Bowman noted, women tend be more cautious than men in assessing broad changes in national affairs. After the fall of the Berlin Wall, in 1989-1990, when people were asked if the fundamental nature of the USSR had changed, women were much less likely to respond that it had. Communicating the improvements in the economy over the past year to female voters could be important for Democrats, who rely on a significant advantage among women.
There are signs that the missing factor in Obama’s economic narrative, namely wage growth, could arrive imminently. Gross job creation has accelerated even faster than monthly net job growth during the year. The number of job openings has grown by nearly a quarter over the past year. If the spike in new positions translates to faster hiring soon, many economists believe that the labor market could tighten enough to result in better salary offers and raises.
Federal Reserve Chairwoman Janet Yellen has expressed the view that wage gains will result once the cyclical increase in unemployment rate has fallen to normal. “The low rate of wage growth is, to me, another sign that the Fed’s job is not yet done” in counteracting the effects of the recession, she said in March.
But it won’t be easy for Obama to convince voters to count on it. “It’s hard to move the needle given the deep level of economic pessimism,” Bowman said.
