America’s Inequality Election

Even four years later, the 2016 U.S. presidential election results still look paradoxical. Many who considered themselves economically marginalized voted for a billionaire, Donald Trump, among whose priorities was cutting taxes on the very rich. Despite an economic calamity that has left many of those same voters even worse off, during the 2020 election campaign, Trump continued to lambaste redistributive policies and promised to keep his tax cuts in place. It remains to be seen how well Trump’s election gambit will work, but it is clear that much of his base remains intact and supports his message.

The explanation of this apparent paradox can be found in the peculiarities of the U.S. voting system. Since presidential elections are decided on a state-by-state basis through the Electoral College, as a political matter, inequality within each state matters more than inequality at the national level. That makes intuitive sense; people compare their economic status more with that of their immediate neighbors than with people living a country away.

The Republican Party is particularly dominant in those areas with stagnant local economies but fairly stable—and relatively contained—income inequality. As economists James K. Galbraith and Jaehee Choi have pointed out, in 2016 Trump received the support of states such as Alaska, Oklahoma, Wyoming, Iowa, Utah, and Michigan, which have troubled economies but also saw the smallest increases in inequality nationwide between 1989 and 2014.

The Democratic Party, by contrast, mobilizes the vote of the two extremes of income distribution, especially in places where both extremes exist and are visible to the other group. Four years ago, Democratic presidential candidate Hillary Clinton succeeded in states such as Connecticut, New Jersey, California, New York, Massachusetts, and Illinois, where over the past three decades inequality soared.

In the two Americas, local interpretations of the causes of inequality and how to fix it vary. According to a Pew survey, the majority of Democrats (who are more likely to come from more unequal places) believe that income inequality is due to an unprogressive tax system, unequal starting points in life, or racial discrimination. Many Republicans—who may come from places where inequality is lower, but where people are, on average, poorer—think that hard work does more to determine one’s ranking in the income pyramid. For these voters, the revitalization of stagnant economies in the country’s periphery—so that hard work is even an option—is more important than redistribution.

Of course, in 2020, COVID-19 is exacerbating inequality everywhere across the United States, including in key battleground states where inequality has been more stable in recent years and where voters swing more easily from one party to another. Democrats, then, may be better placed to capitalize on the despair of Americans on the margins of the labor market in these areas, breaking Trump’s hold there.