Why Lower-Income Workers Are Trending Republican

It’s hard to be an economist and, at the same time, be a Democrat. The reason? Most left-leaning Democrats reject the main teachings of economics.

Yet more than 80% of academic economists are Democrats. For every Republican economist on college faculties, there are 4.5 Democrats. Consider just a few of the ways in which what economists know differs from what liberal Democrats think.

President Joe Biden, Vice President Kamala Harris, and a slew of congressional Democrats say that corporate greed is the cause of inflation, and two-thirds of Democratic voters agree with them. Yet, there is no such thing as a greed theory of inflation in any economics textbook.

The Democratic solution to the problem of inflation is typically price controls, and Sen. Elizabeth Warren (D-MA) has actually introduced a bill to impose them. Yet there is no textbook support for general price controls—especially on the Biden-Harris team’s favorite target: the price of groceries.

The Biden-Harris administration supports rent control, as do half of Democratic voters. To be fair, almost the same percent of Republicans and independents also favor it. Yet almost no economist supports rent controls because of the negative effects discovered in over 200 studies.

Like Biden, Harris wants to raise the corporate income tax rate while claiming that no one earning less than $400,000 would see a tax increase under her plan. Yet, all economists know that corporations do not pay taxes. People do. Every serious look at the corporate income tax concludes that some of the tax is paid by labor in the form of lower wages. One study concludes that the entirety of the corporate tax is paid by labor!

The contrast between what economists know and what liberal Democrats think does not reflect mere differences over what public policies to choose. It represents two completely different understandings of how the economy works.

What is true of academic economists is also true of highly educated, higher-income people who work in the private sector and have some basic knowledge of economics. They include quite a few billionaires, such as Mark Cuban and Bill Gates.

Increasingly, they are voting for Democrats, even though they have the sophistication to know that the Democratic views described above are wrong and the Democratic policies are bad. At the same time, blue-collar, noncollege graduates are trending Republican. How do we explain this realignment?

High-income, highly educated people often vote for liberal Democrats for two reasons: guilt and mythology. It is not unusual for these folks to think they won the genetic lottery unfairly. They were born in the right ZIP code to the right parents and with the right genes. They feel guilty about that.

As for the mythology, that is summarized by New York Times columnist Paul Krugman, who became almost apoplectic the other day over the thought of large numbers of blue-collar workers voting for former President Donald Trump. Krugman wrote: “Since the 1970s our two main political parties have diverged sharply on economic ideology. In general, Democrats favor higher taxes on the rich and a stronger social safety net; Republicans favor lower taxes on corporations and the wealthy paid for in part by cutting social programs.”

In other words, Republicans favor the rich and Democrats favor the poor and the middle class. The problem: Krugman’s view of the world is a myth.

Republican tax cuts through the years have sought to lower tax rates and broaden the base. And just about every time they legislated, Republicans threw more and more people off the tax rolls. As a result, the bottom half of the income ladder is paying almost no income tax at all. From President Ronald Reagan to Trump, the Republicans have shifted the burden of the income tax to the rich—so much so that today, we have the most progressive tax system in the world.

The second part of the myth is the idea that Democrats are friends of those at the bottom of the income ladder. In almost all large cities, low-income families are forced to send their children to the worst schools, live in the worst housing, and endure the worst environmental harms.

Virtually all these cities are managed by liberal Democrats. And the more Democratic the city, the worse things are: more homelessness, more segregated housing, more segregated schools, and more income inequality. By contrast, such Republican ideas as enterprise zones, enterprise programs, and charter cities would liberate people.

As for the “safety net,” welfare-entitlement spending on those at the bottom 20% of the income distribution averaged $64,700 per household in 2022. The vast bulk of that spending goes to medical, housing, education, and agribusiness interests, however.

Poor households get very little from the government in cash, which is why they stay poor. That may be why the bottom half of the income ladder is trending Republican.

This piece originally was published by the Independent Institute and The Washington Examiner.