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Thursday, July 25, 2013

President Obama's Economic Speech and Public Opinion

President Obama’s hour-long speech at Knox College in Galesburg, Illinois, on Wednesday was a major effort on the part of his administration to focus attention on what White House Adviser Dan Pfeiffer called "the most important issue facing the country" -- namely the economy. Pfeiffer is right on that count. Our continuing research does, in fact, show that the economy remains the top problem facing the country, as it has for many years, in the eyes of the average American.

By my count, the president used the term “middle class” over 30 times in his speech. Our data show that 42% of Americans assign themselves a “middle class” label when given a set of social class labels to choose among, while another 13% choose “upper-middle class." Combined, that’s over half. These percentages have been fairly stable over time. As my colleague Andrew Dugan said in reporting these results late last year:  “These data help explain why politicians give the middle class such importance: A durable plurality of Americans believe themselves to be a part of it, and a majority says they are a part of the broader middle class.”

Interestingly, Republicans are more likely than Democrats to label themselves middle class, while Democrats actually skew more toward thinking of themselves as working or lower class. Still, the label resonates with a big swath of Americans, something about which Obama and his speechwriters are no doubt aware.

The president focused up front in his speech on the improvement in the economy:

“Now, today, five years after the start of that Great Recession, America has fought its way back.    We fought our way back....So you add it all up, and over the past 40 months, our businesses have created 7.2 million new jobs. This year, we’re off to our strongest private sector job growth since 1999...As a country, we’ve recovered faster and gone further than most other advanced nations in the world. With new American revolutions in energy and technology and manufacturing and health care, we're actually poised to reverse the forces that battered the middle class for so long, and start building an economy where everyone who works hard can get ahead.”

Do Americans agree? One measure of that would be the public's assessment of the current economy. And those assessments are certainly better than they were four or five years ago. Just after Obama took office, in a weekly average from March 2009, only 7% of Americans rated the economy as excellent or good, while 64% rated it as poor. Now, some four years later, at the recent high point measured in the week May 27-June 2, positive sentiments were up to 22%, while the “poor” percentage was down to 31%. That is, indeed, an improvement.

There is a long way to go, however.  Gallup has been measuring these trends on a more sporadic basis for a couple of decades. At the height of the dot.com boom in July and August 2000, a whopping 74% of Americans rated the economy as excellent or good, while 4% said it was poor. That sets a pretty high standard.

Also, as my colleague Lydia Saad pointed out this week in an assessment of our July "Most Important Problem" update: “Although the economy continues to figure prominently in Americans' assessments of the nation's challenges, fewer than 30% have mentioned the economy, generally -- and fewer than 20% have mentioned unemployment, specifically -- in Gallup's monthly measurement since last December. By contrast, in most months between February 2008 and November 2012, at least 30% of Americans named either the economy or unemployment, or both, as the nation's top problem. And that figure rose above 50% at the outset of the economic crisis in late 2008/early 2009.”

The president next went on in his speech to talk about inequality:

“Nearly all the income gains of the past 10 years have continued to flow to the top 1 percent. The average CEO has gotten a raise of nearly 40 percent since 2009. The average American earns less than he or she did in 1999. And companies continue to hold back on hiring those who’ve been out of work for some time. ...This growing inequality not just of result, inequality of opportunity -- this growing inequality is not just morally wrong, it’s bad economics."

The general idea of distributing money and wealth more equally is endorsed by the majority of Americans. In an analysis I wrote a few months ago, I concluded: “About six in 10 Americans believe that money and wealth should be more evenly distributed among a larger percentage of the people in the U.S., while one-third think the current distribution is fair. Although Americans' attitudes on this topic have fluctuated somewhat over time, the current sentiment is virtually the same as when Gallup first asked this question in 1984.”

Obama is also resonating with his fellow Democrats, in particular, when he focuses on inequality. Eighty-three percent of Democrats agree that income and wealth should be distributed more equally, compared to only 28% of Republicans.  

This leads to the topic of how much priority Americans assign to the whole issue of remedying inequality today. We put “reducing poverty and inequality” in a list of some twelve issues in a May poll and asked Americans to rank each in terms of its being a priority for Congress and the president. Sixty-five percent said that reducing poverty and inequality should be a top or high priority, which is high on an absolute basis, although ninth on the list overall. Creating more jobs and helping the economy grow were at the top of the list, with a 86% priority ranking.  Not surprisingly, the data showed that Democrats gave the idea of reducing poverty and inequality a 23-percentage-point higher priority than did Republicans.

Obama next brought up the issue of "gridlock" in relationship to Congress, saying, "Then, over the last six months, this gridlock has gotten worse.” 

This focus certainly resonates with Americans. The public wants their elected representatives to compromise (see this very recent NBC News/Wall Street Journal poll) and views gridlock as a major problem facing the way in which our government system works. Perhaps the president was reading our May analysis of the data prior to his speech.  We asked the vast majority of Americans who said they disapproved of Congress to tell us why in their own words. The headline of our May analysis said it all: “Gridlock Is Top Reason Americans Are Critical of Congress.”

Next in the president's speech came an emphasis on increasing manufacturing jobs, particularly in this country:

“Now, over the past four years, for the first time since the 1990s, the number of American manufacturing jobs has actually gone up instead of down. That's the good news. But we can do more. So I’m going to push new initiatives to help more manufacturers bring more jobs back to the United States. We’re going to continue to focus on strategies to make sure our tax code rewards companies that are not shipping jobs overseas, but creating jobs right here in the United States of America.”

When we last asked Americans to tell us in their own words what they thought the best way to create more jobs in the United States would be, the top response category was to keep jobs in the U.S. and keep them from going overseas. Further, we know that over six in 10 Americans say they would be willing to pay more to buy products manufactured here in the United States. So, the president’s focus on that point is well taken.

Later in his speech, the president talked about infrastructure: “Businesses depend on our transportation systems, on our power grids, on our communications networks. And rebuilding them creates good-paying jobs right now that can’t be outsourced...And yet, as a share of our economy, we invest less in our infrastructure than we did two decades ago.” 

Spending more on infrastructure, in fact, was tied as the second-most frequently mentioned suggestion for creating more jobs in this country in the survey I referenced above. In fact, Gallup research conducted this March showed that 72% of Americans said they would vote for a new law that would “spend government money to put people to work on urgent infrastructure repairs.”

(More generally, that same March survey showed that 72% of Americans would vote for a federal jobs creation law that would spend government money for a program designed to create more than 1 million jobs.)

Of course, I should note that the second-most frequently mentioned strategy to create jobs (tied with mentions of spending on infrastructure) was reduced government regulation of business and involvement with business, topics which Obama definitely did not stress in his speech. And next on the list was lower taxes, which the president also didn’t mention.

Finally, the president brought up healthcare:

"Fifth, I'm going to keep focusing on health care -- because middle-class families and small-business owners deserve the security of knowing that neither an accident or an illness is going to threaten the dreams that you’ve worked a lifetime to build...As we speak, we're well on our way to fully implementing the Affordable Care Act. We're going to implement it. “

Most polling at this point -- across organizations -- is more negative than positive about the Affordable Care Act. Our latest update showed that by 52% to 44%, Americans disapprove rather than approve of the 2010 Affordable Care Act signed into law by President Obama. And pluralities say the law will make both their personal healthcare situation and the healthcare situation in the U.S. worse rather than better.

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