Partisan Perceptions

Dispel from your mind the notion that the unemployment rate, by itself, drives voter opinions on the economy. A significant number of Americans’ perceptions of the economy are faith-based, or at least based on beliefs that are entirely separate from what the actual data say.

There is some dispute among political scientists as to when, precisely, Americans began to perceive whether the economy was improving or worsening through such an intensely partisan lens.

Andrew Gelman, a professor of statistics and political science and director of the Applied Statistics Center at Columbia University, cites an example from 1988, finding that Republicans and Democrats had completely different perceptions regarding inflation:

Only 25% of Democrats (compared to 70% of Republicans) surveyed in 1988 thought that inflation had improved in the previous 8 years. Another interesting question is why only 70% of Republicans knew about the trend in inflation, but in any case we’re seeing huge partisan differences about an essentially factual question. (Yes, you can argue about the details of the definition of inflation, but by any measure it seems pretty clear that inflation declined between 1980 and 1988. My best guess at why people got this wrong is based on a conversation I had with Eric Snowberg and Rod Kiewiet, who conjecture that, when asked about the rate of inflation, people often respond by telling you about prices. From 1980 to 1988, prices went up, so it might be natural for some people to think this meant that inflation had gone up. Again, though, the point is that there are big differences between Democrats and Republicans in how they responded to the question.)

Elsewhere Gelman pointed out that in late 2008 and early 2009, poll respondents’ consumer confidence seemed at least partially tied to whether their preferred party was in the Oval Office: “ABC News surveys show that the views of Republicans became 19 points more negative between October and mid-April. Meanwhile, the views of Democrats improved by 10 points, even as the economic news became grimmer.”

This phenomenon occurs at the state level as well as the national level. The Marquette Law School Poll found that as the Wisconsin recall election approached in May, Republicans and Democrats felt about the same on the economy: “Between a quarter and a third of voters in each party thought the economy was improving; between a quarter and a third of voters in each party thought it was worsening.” The poll did not specify whether it was asking about the state’s economy or the nation’s economy. Charles Franklin, who conducts the Marquette Poll, conjectured that Republicans believed Governor Scott Walker had Wisconsin on the right track, but that the national economy was in bad shape; Democrats felt that Walker was performing poorly but that President Obama was turning things around nationally.

Now, with the presidential election approaching, responses in Wisconsin have suddenly diverged; 45 percent of Democrats now say the economy is improving, and just 7 percent say it is worsening; among Republicans, just 7 percent say it is improving, and 63 percent say it is worsening — a dramatic shift in four months.

Gallup has found that in recent weeks Democrats have grown much more confident about the economy, and independents a bit more confident, while Republicans are still quite pessimistic: “The Economic Confidence Index among Democrats had been ambling along at around +10 from August through early September. Then, in the week ending Sept. 9, spanning the Democratic National Convention, it surged 18 points to +24 and has since averaged +20 or better. A similar pattern has occurred among Democratic leaners, with a 22-point surge in confidence during convention week. Confidence rose somewhat less sharply, up 13 points, among independents who do not lean toward either party (‘pure independents’), while it has held steady at very low levels among Republicans and Republican-leaning independents.”

Gallup concludes, “Right now, politics is playing an inordinately large role in the behavioral economic data.”

So that explains why Democrats feel good about the current state of the economy, with its 8.1 percent unemployment rate, its 1.3 percent GDP growth, its gasoline averaging $3.79 per gallon, and median household income continuing to decline even after the recession technically ended. But what about the 10 percent that Gallup considers “pure independents,” who lean toward neither party?

Luckily for the Obama administration, recent economic reports have generated sufficiently unclear results that a casual glance might suggest things are getting better. Few Americans know that, traditionally, the number of new jobs needed each month to keep up with the number of new workers entering the workforce is considered to be 100,000 to 150,000. (Some say a sustained recovery requires something closer to 250,000 jobs created per month.) Obviously, if an economy creates 45,000 jobs, as it did in June, but adds 125,000 new workers, the overall number of people looking for work goes up by 80,000 and the unemployment rate is actually higher, not lower (although the official percentage probably would remain the same, for reasons discussed below).

So some Americans may think that any level of job creation is good news. Saul Alinsky wrote: “The moment one gets into the area of $25 million and above, let alone a billion, the listener is completely out of touch, no longer really interested, because the figures have gone above his experience and almost are meaningless. Millions of Americans do not know how many million dollars make up a billion.”

And few Americans know about the “discouraged worker” factor in the statistics — the factor of the unemployed worker who was looking for work sometime in the past year but has stopped looking for work. The most recent jobs report indicated that there are 844,000 discouraged workers who aren’t counted in the official unemployment rate.The official rate is known as the U-3 figure; adding “marginally attached” workers and then adding “discouraged workers” gives us the U-4 and U-5 figures, respectively. Then there is the question of how to classify those who are working part-time but who want, and cannot find, full-time work. Technically these workers are employed, but they are likely to be struggling financially; there are 8 million Americans in this category; adding these to U-5 brings us to the U-6 figure. Finally, Paul Solman, the business and economics editor for PBS’s NewsHour, believes that the long-term unemployed — those who have stopped looking for a year or more, but say they want a job, a figure reaching about 7 million — should be included, in a figure he labels U-7.

If you include these groups, the number of “unemployed” booms from 12.5 million to 27 million.

The most recent jobs report was deemed gloomy news by most analysts — 368,000 people stopped looking for work, the percentage of the working-age population either employed or actively looking for work hit a 30-year low, average hours worked and wages remained stagnant. But because 96,000 jobs were created while the 368,000 people mentioned above stopped looking, the official unemployment rate, U-3, dropped from 8.3 percent to 8.1 percent. The number of jobs created and the drop in U-3 are the two figures most likely to be mentioned in the headlines, and both sound to the uninformed like good news.

From this, one might conclude that President Obama is Teflon-coated on the economic issues, floating along on a cushion of partisan loyalty and with poorly informed voters believing the economy is doing better than it is.

But it is worth noting that it is one thing to tell a pollster that the economy is doing well or well enough, particularly if the respondent interprets the question as, “How well is the incumbent you voted for performing?” It is another to contemplate the economy, and one’s prospects in it, at the moment of decision within the voting booth.

Besides having last Friday’s report on the jobs picture for September, voters will have the report for October four days before Election Day. Many of them will drive to the polls after putting $3.50- to $4-per-gallon gas in their cars. And voters will drive or walk past empty storefronts and homes with foreclosure sale signs on their lawns, as the foreclosure rate is only slightly below last year’s 17-year high. The Federal Reserve reports that Americans have put more into their savings accounts than at any time since the Fed began measuring the savings rate in 1945, and are putting off major purchases — indicators of deep caution and uncertainty about their economic futures.

The responses to the “Is the country on the right track or headed in the wrong direction?” question remain strongly negative, well beyond the normal partisan split — suggesting that some respondents who claim to believe the economy is getting better still feel in their gut that we’re sliding toward some dire fate. In the GWU/Battleground poll, two out of every three independents think the country is on the wrong track.

The responses to the question about the country’s direction suggest that partisan loyalty and cheerful headlines about jobs reports can shape a voter’s perceptions of the economy quite a bit — but even those phenomena have their limits.

— Jim Geraghty writes the Campaign Spot on NRO.