“Economic growth without an increase in per capita income or productivity, which enables sustained and healthy growth, is insufficient and leads to frustrations.”
Among the reasons for the democratic failure in the North American elections, the economic situation (the prices of the shopping basket) is at the top of the list. Immigration is also a recurring issue for years. In principle, economic evolution represents a counterfactual data point, as the US economy during Biden's term has performed more than reasonably, especially compared to all others. Good growth figures and unemployment at minimal, almost technical levels; certainly much better than Europe, which is the other preferred area of comparison. However, this has not been the dominant opinion among a large sector of the electorate, sensitised by last year's inflation rates and their impact on the shopping basket. The question now, and also in Europe, is not the average income level and its growth, but the distribution and the growing inequality between the rich and the poor. Who obtains the highest income levels? Above all, how the purchasing power of families and individuals with average and low income levels is evolving. Especially the perception of those individuals, who represent millions of voters. The analysis of citizens' aspirations and feelings in economic terms requires more disaggregated and eloquent data than national or regional averages of growth. It requires deeper analysis of families' aspirations and expectations. We need to go down to the neighbourhood level, by age, by social group to reach finer and more substantiated conclusions than those provided by national averages.
Not only in the United States, but also in Europe and, specifically, in Spain. Here the economy is doing well, in general and average terms. But it is doing well by neighbourhoods: it is better for pensioners who have maintained their purchasing power, even if it has been through a dangerous and reckless increase in public debt; but it is not going as well for young people with (or without) jobs, who face too much precariousness and an overwhelming problem due to the rising costs of their emancipation housing rents. It is not going as well for the many resident immigrants who spend more than three years trying to obtain "papers" that allow them to be recognised citizens with rights and obligations. Global GDP growth without an increase in per capita income or productivity, which enables sustained and healthy growth, is insufficient and leads to frustrations that end up surfacing everywhere and are the best breeding ground for populism.
Social policies aim to correct inequalities, but they stumble upon issues of efficiency and effectiveness, with deficiencies in evaluation and monitoring; because on paper, a lot is promised, but in practice, little is concretised due to design errors and, above all, monitoring and correction. The austerity and adjustment policies following the 2008-11 crisis were not well designed, erring in cutting investments in public goods (one of the causes of environmental and climatic disasters) and in guaranteeing essential public services. Also in the pedagogy of the necessary explanations in times of crisis.♦
