The Battleground Economy: How Key Swing States Will Influence the 2024 Election

Both Joe Biden and Donald Trump face challenges in winning over voters in the 2024 Presidential Election. With their historical unpopularity, these candidates need to address critical issues to swing voters in pivotal states. The economy, inflation, and voter concerns about broader political issues could play a deciding role in these ‘Battleground Economy’ states.

Key Voter Concerns: 🔑

Voters are grappling with several pressing issues:

• Immigration and Border Security
• Access to Reproductive Rights and Abortion
• Threats to Democracy
• Age and Health of the Candidates
• Economic Conditions like inflation

The Swing State Focus: ⏳

In 2024, the votes in seven swing states will matter more than the rest of the country: Arizona, Georgia, Michigan, North Carolina, Nevada, Pennsylvania, and Wisconsin. We’ve dubbed them the ‘Battleground Economy’. The economic well-being of voters in these states could be the linchpin of the Presidential Election.

The Economic Landscape of Swing States: 📊

If these seven swing states were treated as a single economy, they would produce around $4.4 trillion in GDP—making their combined economy larger than Japan. This hypothetical economy is older, whiter, and sometimes poorer compared to the rest of the United States, but its political influence is immense.

Economic Diversity and Growth: 🌟

Each swing state’s economy varies. For instance:

• Sun Belt States like Arizona and Nevada have seen a significant increase in population and investment, leading to notable economic shifts.
• Blue Wall States like Michigan, Pennsylvania, and Wisconsin have economies that rely on manufacturing and are growing more slowly than Sun Belt States.

In total, manufacturing constitutes 12% of GDP in these swing states, compared to about 10% for the rest of the U.S.—indicating a more 20th-century economic makeup.

The National Economic Picture: 🌍

Economic Milestones and Challenges: 📈

By many measures, the U.S. economy is in historically good shape:

• Unemployment has been at or near record lows
• Inflation is coming down after reaching alarming highs

The credit for much of this goes to industrial policies championed by Joe Biden. States like Arizona have benefited from investments in semiconductor fabrication plants, while Nevada has surged thanks to Tesla’s battery manufacturing. However, the national economy is also recovering from significant upheavals, including a deep recession in 2020, followed by a rapid recovery but marred by the highest inflation in 40 years and elevated interest rates.

Local Economic Pressures: 🏠

While some states are booming, others face severe pressures. For example:

• Nevada has seen housing costs rise significantly. A median household in Nevada now spends 36% of their monthly income on their mortgage payment, up from 19% just a year earlier.
• Georgia has added 300,000 people since 2020, mainly in metro Atlanta, growing the state economy but also sharing the wealth among more people.

The Political Economy: 🗳️

Republican Strategy and Economic Challenges: 🏛️

Republicans are making a significant play for Wisconsin, a state where the economy, in real GDP per capita terms, shrank by just under 1% between 2019 and 2023. However, blue counties around big cities are doing better economically compared to red counties. For example, Dane County (Madison) is thriving with a booming economy.

Counties that voted for Joe Biden grew by an aggregate of 4.2% in real GDP per capita terms, compared to just 0.8% for counties that voted for Donald Trump.

The Misery Index: 🤢

Historically, politicians have looked at the Misery Index, which sums up the level of inflation with the unemployment rate. During Biden’s term, the unemployment rate has remained low and inflation has come down, making his traditional Misery Index appear favorable.

However, polling shows that voters in all seven swing states trust former President Trump more than President Biden as an economic steward. Thus, a new ‘Misery 2.0’ Index has been constructed, considering four-year cumulative inflation and the average unemployment rate. Arizona, with the highest price increases, leads the Misery 2.0 Index among swing states.

Biden’s Economic Record: 📉

President Biden is on track for a Misery 2.0 Index of 25.5. Cumulative inflation during his term is estimated to reach about 21%, which means approximately a fifth of voters’ purchasing power has been eroded compared to before he took office. Though not all inflationary pressures are his responsibility, deficit spending under both Trump and Biden has applied upward pressure on interest rates. The Federal Reserve’s bond-buying to suppress interest rates and facilitate spending during the economy’s reopening also contributed to the inflation surge.

The Voters’ Decision: 🚨

Ultimately, while the economy isn’t the only issue for voters, it remains a crucial factor. How the local economies in these seven swing states are performing could be the final determinant in swaying voters come November. Politicians and their policies will need to convincingly address these economic concerns to secure the coveted swing state votes.

The 2024 Presidential Election will certainly be one for the history books, shaped significantly by the economic realities of these battleground states.