Frederica Freyberg:
The economy is a top issue heading into the 2024 election, but how is it actually doing? Workers saw higher wage growth and a faster growing GDP under President Biden, but saw much lower inflation under President Trump. Inflation has cooled off since the pandemic down to 2.5% as of today. Still, prices remain high. “Here & Now” reporter Nathan Denzin has more on this.

Nathan Denzin:
If the 2020 election was defined by COVID-19, the 2024 election is defined by the economy.

J. Michael Collins:
The big issues that come up are housing, food, especially rent and child care.

Mike Semmann:
You’re seeing a pretty good increase in both grocery prices, but also prices as a whole.

Kent Miller:
Inflation is real. You know, we feel strongly some of that is corporate greed too.

Nathan Denzin:
Since 2020, the American economy has been hard to pin down.

J. Michael Collins:
The average worker today, I think, on an hourly basis is making about $6 more an hour than they were back before the pandemic.

Nathan Denzin:
J. Michael Collins is a professor at the UW La Follette School of Public Affairs studying consumer decision making.

J. Michael Collins:
The downside is inflation has also risen, so that extra $6, almost all of it has been eaten up by the cost of the stuff they have to pay for.

Nathan Denzin:
Cumulative inflation since 2021, when Joe Biden took office, has continued to climb. Meaning…

Mike Semmann:
In 2019 if a consumer was paying $100 for groceries, in 2024 they’re now paying about $125.

Nathan Denzin:
Mike Semmann is the president and CEO of the Wisconsin Grocers Association.

Mike Semmann:
So really there was a major economic shock to the system.

J. Michael Collins:
The other thing is that it has not been across the board inflation. It has been energy. Things like your electrical bill, things like gasoline and food.

Nathan Denzin:
Groceries are particularly responsive to rising energy costs.

Mike Semmann:
All those things that are at the front end of the supply chain are going to have a major impact, because grocery stores only have about a 1 to 2% profit margin.

Nathan Denzin:
Goods that are not purchased frequently, like a mattress, have much larger margins. That means that when energy costs rise, a mattress business can eat some of the extra expense and still make a profit. But with groceries, the margin is so slim that any rise in production and transportation costs will show up when you check out. Supply chains broke down in the early days of the pandemic, which caused prices to rise dramatically.

Mike Semmann:
If you’ve got a ten cents increase in a transportation cost on the front end of the supply chain, that’s multiplied across every different point, and by the time it reaches the end consumer, they’re going to be feeling it.

Nathan Denzin:
Those price increases have led many to wonder if America is in a recession. The latest Marquette University Law School poll found that nearly two thirds of Wisconsinites have a negative view of the economy.

J. Michael Collins:
In terms of how the economy is humming along, there’s really no sign that we’re in a recession right now.

Nathan Denzin:
A recession is broadly defined as multiple quarters of negative GDP growth. That threshold was briefly met in mid-2022, but since then the economy has grown each quarter. Other economic indicators, like unemployment and the stock market, also look positive. The S&P 500 has grown more than 45% since Biden took office, and unemployment continues to hover near record lows of just under 3% in Wisconsin. Wages in Wisconsin have increased roughly 25% across all jobs, enough to very narrowly beat inflation.

Kent Miller:
We have been able to secure some unprecedented collective bargaining agreements, right? 19% increases over three years.

Nathan Denzin:
Kent Miller is the president and business manager of the Wisconsin Laborers District Council, or LiUNA.

Kent Miller:
The bipartisan infrastructure bill in Wisconsin, that’s an extra billion dollars over five years in investing in roads and bridges and sewer and water infrastructure. We have the Inflation Reduction Act, where we’re seeing tons of private investment in utility-scale solar and wind development and battery storage.

Nathan Denzin:
Miller says LiUNA, which represents over 9,000 laborers in Wisconsin, has seen tremendous growth under the Biden administration.

Kent Miller:
I think that there’s an estimate on just the IRA component in Wisconsin of, like, almost 19,000 jobs.

J. Michael Collins:
Workers who are working on an hourly basis, whether that’s in manufacturing or construction or whatever it might be, are doing better than they were 4 or 5 years ago.

Kent Miller:
And that’s because of the Biden-Harris administration.

J. Michael Collins:
While they’re doing better, the question is, have they been able to swim faster than all these sort of other things that are pushing against them?

Nathan Denzin:
Groceries top that list but Semmann says grocery stores have started to see inflation cool off.

Mike Semmann:
We’re seeing both a stability in prices in certain types of produce, but we’re also seeing a real decrease in prices in produce, in the produce area.

Nathan Denzin:
Take wage increases in a growing stock market and combine it with high inflation and you get an economy that is…

J. Michael Collins:
… kind of weird.

Nathan Denzin:
Collins says it’s difficult to declare exactly how the economy is doing, especially since attitudes about it are so poor.

J. Michael Collins:
People are not just trying think about how to get through today. They’re trying to think about how are they going to fare six months from now, or, you know, they’re making plans for next year and whether that’s buying a house or going on vacation and like, are they going to be able to afford that.

Nathan Denzin:
When it comes to voters, their perception is reality. And until prices stabilize or drop across the board, negative attitudes about the economy will likely persist. For “Here & Now,” I’m Nathan Denzin in Madison.