High inflation is bad for two reasons: (1) real wages decline, especially among the poor, (2) inflation causes populism, which may cause Democrats to lose the 2022 midterm elections.
It’s quite nuanced. There are real wage declines on average, but some poor people might have seen small real wage increases, others might have seen real wage losses. For instance, older people’s wages seem stickier according to the wage tracker here. OpenPhil’s grantee EmployAmerica has an interesting analysis of the various factors, and one could perhaps reasonably disagree with that. But my analysis doesn’t hinge on the claim that real wages have definitely decreased, and I think the main idea still holds even if there have been small wage increases for some populations.
I agree that parties usually lose ground in the midterms, but even if you take that into account, the Democrats are doing particularly poorly.
I’ve lost a few citations due to a software error—which I’ve now fixed, but for completeness I wrote:
“Real income can predict midterms and naïve extrapolation of current income decline predict Democrats losing 50+ seats.”
It’s quite nuanced. There are real wage declines on average, but some poor people might have seen small real wage increases, others might have seen real wage losses. For instance, older people’s wages seem stickier according to the wage tracker here. OpenPhil’s grantee EmployAmerica has an interesting analysis of the various factors, and one could perhaps reasonably disagree with that. But my analysis doesn’t hinge on the claim that real wages have definitely decreased, and I think the main idea still holds even if there have been small wage increases for some populations.
I agree that parties usually lose ground in the midterms, but even if you take that into account, the Democrats are doing particularly poorly.
I’ve lost a few citations due to a software error—which I’ve now fixed, but for completeness I wrote:
“Real income can predict midterms and naïve extrapolation of current income decline predict Democrats losing 50+ seats.”
Sources are:
https://www.vox.com/2022/2/21/22936218/inflation-biden-midterms-democrats
https://www.mischiefsoffaction.com/post/2022-midterm-forecast
So it’s beyond the scope of this post to quantify the exact impact, but it might not be trivial.