Obama’s Economic Rebound Doesn’t Boost Democratic Allies

June 13 (Bloomberg) -- This week President Obama unveiled details of a minimum-wage raise for those working under federal contracts. Congress meanwhile is moving slowly on the administration's request to mandate a new level of $10.10 across the country. Bloomberg's Willem Marx looks at potential beneficiaries if the hourly wage does rise, in today's Big Question.

Sluggish improvement in living standards among Democrats’ core voters threatens to hurt the party’s candidates in this year’s congressional elections.

Median household income among all Americans is still lower than before the recession, which ended five years ago, according to economic consultant Sentier Research. Key Democratic constituents -- blacks, Hispanics, single women and young people -- have been especially hard-hit, and analysts say that could make them less energized about going to the polls.

The economic reality is “dampening enthusiasm among some of the voter groups Democrats need most,” said Charlie Cook, publisher of the nonpartisan Cook Political Report. “To create the kind of oomph Democrats need, you’d want back-to-back gains of 400,000 jobs a month.”

Related:

Companies aren’t coming close to that figure, adding an average of 231,000 jobs the last four months. And the economy’s lingering weakness was underlined yesterday when the government said the gross domestic product contracted at a 2.9 percent rate in the first three months of the year, its worst performance since the lowest point of the recession.

Even though forecasters project growth of better than 3 percent for the rest of the year, some political damage has already been done. Dissatisfaction with President Barack Obama, the economy and the direction of the country is burdening Democrats as control of the U.S. Senate is at stake in the November elections, when Republicans would win the majority if they gain six seats.

Photographer: Rogelio V. Solis/AP Photo

Catherine Walker marks her ballot in the poll inside the William W. Blackburn Middle School poll in Jackson, Miss.,Tuesday, June 24, 2014. Close

Catherine Walker marks her ballot in the poll inside the William W. Blackburn Middle... Read More

Close
Open
Photographer: Rogelio V. Solis/AP Photo

Catherine Walker marks her ballot in the poll inside the William W. Blackburn Middle School poll in Jackson, Miss.,Tuesday, June 24, 2014.

‘Folks Struggling’

Obama touched on the discontent at a town meeting today in Minneapolis, saying “there’s still a lot of folks struggling out there,” and “we’ve seen wages and incomes sort of flatline.”

Still, he said, “on just about every economic measure, we are significantly better off than we were when I came into office.”

Though the economy isn’t as much the centerpiece of this campaign as it was in 2012 and 2010, Americans still consider it the most important issue confronting the nation. Forty-four percent said so in a Gallup poll taken June 5-8, compared with 68 percent in June 2012 and 57 percent the same month in 2010.

Should growth strengthen over the coming months, it will give Democrats “a little momentum going into September, November,” said Peter Hart, a Democratic pollster.

Echoing 2010

Yet disapproval of Obama’s handling of the economy is running higher than on the eve of the 2010 midterm elections, which the president called a “shellacking” that cost his party control of the House.

Fifty-seven percent of Americans said they’re unhappy with Obama’s economic stewardship in a June 6-9 Bloomberg National Poll compared with 51 percent in October 2010. Almost two-thirds think the country is on the wrong track.

Public malaise driven by the economy works “as an anchor to presidential approval,” said Republican pollster Bill McInturff.

Other issues such as Obama’s health-care law are more visible in the campaign. Health care has been mentioned in 41 percent of television commercials this election cycle while 24 percent have mentioned unemployment or jobs, according to data compiled by New York-based Kantar Media’s CMAG.

Negative Stories

Still, the economy’s impact on the election is contributing to an environment that makes it harder for the president to move beyond negative stories such as the scandal over veterans’ hospitals, the backlash over the Taliban prisoner exchange, and the crises in Ukraine, Iraq and Syria, McInturff said.

“If the economy is booming, it can cover a lot of sins,” he said. “When you’re in this sort of economy, you get bogged down in every story.”

History is already working against the Democrats. The president’s party typically loses seats in midterm elections, and more of the Senate seats being contested this year are held by Democrats than Republicans, making the party vulnerable.

Many of those Democratic seats are in unfriendly territory: Six are in states that 2012 Republican presidential nominee Mitt Romney won by 14 percentage points or more. Only one Republican senator, Maine’s Susan Collins, is running in a state Obama won.

The economy has come a long way from the crisis that swept the country when Obama took office a few months after the collapse of Lehman Brothers triggered a global financial crisis. The jobless rate is down from a double-digit peak in 2009, and the country is producing almost $1 trillion more in goods and services than at its pre-recession peak.

Confidence Index

The progress is registering with the public. The Conference Board’s Consumer Confidence Index rose to 83 in May from 73 in October 2012 on the eve of Obama’s re-election, though still well below its reading in the year leading up to the recession.

Yet the headline statistics don’t capture the economic travails of voters. The official unemployment rate of 6.3 percent doesn’t include people no longer looking for work. And the rebound in jobs hasn’t been enough to make up for population growth in the past seven years.

A broader measure of employment, the portion of 25- to 54-year-olds with jobs, shows the economy still hasn’t made up all the lost ground: 76.4 percent of Americans in their prime working years are now employed compared with 79.7 percent at the start of the recession in December 2007.

Below Recession

Real median household income at $52,959 in April was $3,303 less than what it was before the recession, according to Annapolis, Maryland-based Sentier Research.

And Democratic constituencies such as blacks, Hispanics, unmarried women and the young have been especially slow to rebound. Inspiring those groups is important to Democrats this year since turnout in midterm elections is historically lower than in presidential years.

A June 2013 report by Sentier found that four years after the start of the recovery, real median annual household income was down 10.9 percent among blacks and 4.5 percent among Hispanics compared with a 3.6 percent drop among whites.

Single mothers’ median household income fell 7.5 percent and women living alone were down 6.5 percent compared with a 4.4 percent drop among all households. Among under-25-year-olds living on their own or as household heads, median incomes were down 9.6 percent.

Unemployment among blacks is running at 11.5 percent and among Hispanics at 7.7 percent compared with a 5.4 percent jobless rate for whites.

Stanley Greenberg, a Democratic pollster who advised former President Bill Clinton, said his party can still motivate voters by focusing on their economic concerns.

The White House and congressional Democrats have done that this year by calling for an increase in the minimum wage, legislation on pay equity for women and measures to improve college affordability, he said.

“Those are the central things that people want to address,” Greenberg said. “It’s recognizing that this economy is deflating for voters, but there are things that we can do.”

To contact the reporter on this story: Mike Dorning in Washington at mdorning@bloomberg.net

To contact the editors responsible for this story: Steven Komarow at skomarow1@bloomberg.net Mark McQuillan, Don Frederick

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.