For years, conservative economists and political leaders have derided as a statistical illusion the argument that middle-class workers - particularly those without college educations - are facing downward pressure on their living standards.
Suddenly, however, the Republican presidential contenders have reversed field and are vying to propose solutions for a problem their party had long insisted did not exist. With their eyes on economically squeezed, working-class voters - the most volatile block in the electorate - at least five of the GOP contenders now accept the premise that many American families are treading water or sinking economically.
Patrick J. Buchanan makes that argument most aggressively. But, in different ways, he has been joined by Steve Forbes, Sen. Richard Lugar of Indiana, former Tennessee Gov. Lamar Alexander, and now even the struggling front-runner Bob Dole - who complained in a speech Tuesday to the New Hampshire legislature that hourly wages were dropping even while “corporate profits are setting records.”
The change in the GOP rhetoric about living standards documents the impact of Buchanan, who has surprised party leaders with his strong appeal to blue-collar voters. But the shift also testifies to the anxiety about the future that looms over the 1996 campaign.
“People see economic opportunity and security slipping away - both at the same time,” opinion analyst Richard C. Harwood wrote in a recent study based on a nationwide series of focus groups. “The fear and frustration many Americans feel about the current economic situation are palpable.”
In raising the issue of living standards, the Republicans are implicitly acknowledging that the drive to balance the budget which has consumed them over the past year - and still constitutes Dole’s central economic message - may not address voters’ economic concerns, many observers say.
“While everyone in Washington is arguing about the budget, concerns about the economy have just jumped through the ceiling,” says GOP pollster Ed Goeas. “The issue that people are really focusing on is middle-class squeeze.”
Ironically, this Republican focus on living standards comes as some influential White House advisers are urging Clinton to shift his own rhetorical emphasis from economic stagnation toward a values argument aimed at more upscale independent voters.
Given his propensity to absorb all viewpoints and embody all themes, Clinton is likely to devote at least some attention to both ideas - as he has through most of his presidency. But, said one White House adviser, there remains considerable discussion “over how much you want to talk about something you can’t do anything about” - namely the downward pressure on the incomes of voters without college educations.
For years, left-leaning economists and politicians have lamented the stagnation of the median family income since 1973, and pointed to data showing that average hourly wages for men have declined since the early 1970s, particularly for men without college degrees. Most conservative economists have dismissed the relevance of the median income and point toward figures showing that total compensation to workers, including both wages and fringe benefits, has modestly increased over the past 20 years.
Yet polls leave no doubt that large numbers of Americans feel they are running in place, if not losing ground, in an economy where raises have become more grudging and infrequent. Tuesday, the Labor Department reported that total compensation to American workers increased less than 3 percent in 1995, the smallest increase since the early 1980s.
In the past two elections, no group of voters has changed allegiances more suddenly or decisively than those without college educations, who have suffered the most from these wage trends over the past generation. In 1992, disaffected working-class white voters powered much of Ross Perot’s surprisingly strong third-party showing; in 1994, their dramatic shift to the right helped drive the Republican takeover of Congress.
Polls show that many of those voters have since soured on the GOP Congress, and are likely to constitute a key - perhaps the key - swing vote in the fall election.
First, though, these working-class white voters present a potentially fertile ground for Buchanan in the GOP primary, particularly in states such as New Hampshire that don’t limit participation to registered Republicans.
In Iowa, Buchanan carried a plurality of voters earning less than $30,000 annually - and saw his support drop as income rose. Pollster Gerry Chervinsky’s polling in New Hampshire for the Boston Globe shows the same pattern emerging. Among likely Republican voters earning less than $30,000 annually, Buchanan and Dole ran evenly in polling completed Tuesday night; among voters earning $60,000 or more, Dole led Buchanan 32 percent to 9 percent. Buchanan’s strength with working-class voters may have been one reason Dole inaugurated his New Hampshire campaign Tuesday by lamenting the trends in living standards. “Corporate profits are setting records and so are corporate layoffs,” Dole declared. “The bond market finished a spectacular year. But the real average hourly wage is 5 per cent lower than it was a decade ago.”
Dole has made concessions to the Buchanan message. Last fall, he said America needed a “cooling off period” before expanding the North American Free Trade Agreement to new nations. But his remarks Tuesday still constituted a stretch for a man who has attracted enormous financial support from business and championed its causes in Washington for decades.
“This argument could get Dole through New Hampshire, but I cannot see Dole sustaining it,” said Democratic pollster Stanley B. Greenberg. “For Dole to accept this premise crashes against everything else he believes in - his views of the market, of business and of Ronald Reagan. It divides his own party.”
In talking about living standards, Republicans now face the same problem as Clinton: uncertainty about what, if anything, can be done about the problem.
In 1992, Clinton proposed to jump-start living standards with new spending on education, training and research plus efforts to expand trade; but his commitment to balance the budget now prevents him from spending significant new sums on such ideas.
Buchanan’s response is a program of high tariffs and barriers to immigration that he says will protect American workers from the global integration of the economy.
Forbes, an ardent free trader and supporter of high levels of legal immigration, rejects Buchanan’s solutions as counterproductive. Forbes, instead, proposes monetary reform and a flat tax he says will invigorate economic growth.
Until recently, Alexander has rarely discussed living standards; when he does, he talks about reducing government, but also echoes Clinton in stressing education and training.
Though he lamented the trend in wages Tuesday, Dole has offered few thoughts on how to reverse it - other than suggesting that simplifying the tax code in unspecified ways and cutting spending would increase growth.
More pointedly, in his remarks Tuesday, Dole tied middle-class economic anxiety to Clinton’s tax increases, the opening note in what aides say will become a broader effort to link Clinton to slow income growth.
“The fact is all these trends are Clinton’s problems now,” one senior Dole adviser said. “He rode them into office, and he will ride them out.”