Above photo: Gary H/Flickr.
The economy and cost of living continues to be the top issue for the people of the US.
Voters are struggling under astronomical housing and grocery costs.
Just eight days remain until the people of the US head to the polls to decide their next president. The economy and inflation continues to be the top issue for voters by far, with eight in ten registered voters saying the economy will be very important to their vote according to the Pew Research Center. According to Gallup, the economy is the most important out of 22 issues voters were polled on, including “terrorism and national security”, immigration, education, healthcare, and crime.
If one were to read exclusively the mainstream media, one would get the impression that all is well with the economy, that inflation is falling, and the job market is doing just fine.
But the conditions of working people tell a different story. Housing costs hit an all-time high in April of this year. Rent prices keep increasing, with asking rent prices rising 3.3% in September, only exacerbating housing unaffordability which plagues working people. Nearly half of renters across the US spend over 30% of their income on housing.
“It is difficult to decide for which of the two, because of what we are for Kamala, because of how the situation is, how it has been damaged, it makes me doubt, with Trump as president the economy improved a lot, we were doing well. There is a large part of the community that has the same doubt,” Vilma, a Queens resident, told journalist Marco Teruggi. Vilma is herself an immigrant, but because of economic issues, feels torn between Trump and Harris, despite Trump’s drastic remarks against immigrants. “His expressions are not good because he is grouping all migrants in and that we are all equal,” she said.
“The basic food basket is skyrocketing, and the business owners are suffering a terrible decline, especially at the end of last year and this year, and the insecurity is so bad that today it is more difficult to make an honest living in New York City,” she said.
According to US Census data from August 20 to September 16, approximately 69% of people polled (around 250 million) have had some difficulty affording basic household expenses each week. Over 93% of those polled had some level of stress over the last two months’ price increases, with over 45% reporting they found these price increases to be “very stressful”. As journalist Eugene Puryear writes in Liberation News, “inflation may be “cooling,” but only in relation to the astronomical highs of the past couple years,” as evidenced by the still high cost of food staples such as milk, bread, and eggs as compared with 2020. Food in general costs around 25% more as of September of this year than in 2020.
This is because prices of basic consumer goods such as food, energy, and shelter have risen astronomically during current President Biden’s administration, especially midway through 2022, according to the consumer price index. The major increases in prices seen in 2022 have since slowed, but the prices of staple goods still continue to steadily rise. Meanwhile, wage growth has not been large enough to account for these major price increases. The federal minimum wage has not increased since 2009, remaining at a paltry USD 7.25 per hour. According to the US Bureau of Labor Statistics, one million workers earn wages at or below the federal minimum wage.
Who’s To Blame For Inflation?
According to economist Richard Wolff, the blame for these price increases lies with those at the very top of the economic food chain. “The current US economy is good for the top 10%, and above all for the top 1% but not for the other 90%,” Wolff tells Peoples Dispatch.
“Prices of goods and services are determined by employers in the enterprises that produce and sell goods and services. Employees do not set prices; they just must pay them to live.”
“The setting of prices is part of class struggle: the employer class sets the prices the working class must pay. Since employers are also those who pay wages for the work we do, they control our standards of living at both ends of consumer purchases: how much income our jobs give us to spend and what prices we must pay with that income.”
In the example of food prices, grocery stores have indeed “price gouged”, or raised the prices of goods beyond inflation. A Federal Trade Commission (FTC) report from March of this year found that “food and beverage retailer revenues increased to more than 6 percent over total costs in 2021, substantially higher than their recent peak of 5.6 percent in 2015. In the first three-quarters of 2023, retailer profits rose even more, with revenue reaching 7 percent over total costs.”
The FTC concluded that “this profit trend casts doubt on assertions that rising prices at the grocery store are simply moving in lockstep with retailers’ own rising costs.”
Kroger’s Senior Director for Pricing, Andy Groff, even admitted to the FTC in August that the supermarket chain had raised the prices on milk and eggs more than what was necessary to account for inflation.
Candidates’ Proposals To Tackle Cost Of Living Crisis
Neither major candidate has any real solutions for the issue of cost of living, despite the fact that both have dedicated most of their written platforms to economic issues. Trump is against price controls, and the Republican Party platform emphasizes eliminating “Costly and Burdensome Regulations”, claiming that this will save money for households. Trump’s plan to lower grocery prices through tariffs would actually just allow corporations to pass the cost of those tariffs onto consumers, some economists claim.
Harris’s plan is moderately better, including by promising to “crack down on unfair mergers and acquisitions that give big food corporations the power to jack up food and grocery prices,” and to “call on Congress to pass the first-ever federal ban on price gouging”. Both proposals seem interesting on paper, but the reality is that it is under the very administration that Harris has served on for four years that prices rose to such astronomical levels.
The FTC has moved to block the merger of supermarket giants Kroger and Albertsons, which is still tied up in the legal system, which had raised concerns about price gouging.
Yet, in terms of calling on Congress to pass a ban on price gouging, the Democratic Party has a poor track record in recent years. “The experience of the Biden administration has left many working people deeply distrustful of promises made by Democratic Party politicians on the campaign trail,” Walter Smolarek, editor of Liberation News, told Peoples Dispatch. “Biden promised the largest expansion of social programs in decades with his Build Back Better program, but he abandoned that effort without a fight once he faced opposition from right wing senators in his own party.”
Indeed, Biden’s administration has failed to pass laws or enforce executive orders to codify abortion rights, a higher minimum wage, voting rights, social spending, and to eliminate student debt. These promises of the Biden administration, many of which were concessions extracted by popular struggle, were then subsequently abandoned.
Will a Harris administration be able to control Congress any better? Harris has recently promoted eliminating the filibuster rule when it comes to codifying abortion rights, but the Vice President is known for changing her positions, as she has done regarding banning the practice of fracking or Medicare for All.
Meanwhile, working class people in the US continue to experience the effects of economic devastation. With studies linking housing instability and high grocery prices to a decline in mental health, it is notable that depression rates reached new highs in 2023.