- Data shows wealthier Americans are now solidly behind the Democratic Party, a generational realignment that has altered power dynamics in D.C.
- The shift has arguably led Democrats to embrace more moderate economic policies, turning off progressive grassroots voters they need to win.
- To gain back working class votes, some believe major political parties need to make income inequality a key facet of their 2024 platforms.
An abbreviated version of this article originally appeared on Newsweek.com.
Republicans’ grasp on the upper crust of American society is beginning to slip, while Democrats are increasingly becoming the preferred party of America’s elite. And it could cost them their grip on the White House.
Republicans have appealed to America’s wealthy with a platform that’s long committed itself to lower taxes and fewer regulations for big businesses. However, wealthier Americans are gravitating more toward Democrats, voting Blue in the last two presidential elections, and the new appeal to wealthier individuals is creating a divide with a key Democratic voting bloc – blue collar workers.
The trend threatens to widen existing fissures between party moderates and its traditionally lower-earning, and more progressive base, potentially threatening Biden’s chances for re-election and Democrats’ ability to retake the House of Representatives. Particularly as working class voters, including working class voters of color, begin gravitating toward the GOP.
“It used to be that the Republican Party was more or less the party of the well-off and affluent,” Anthony Fowler, a Professor in the Harris School of Public Policy at the University of Chicago who studies political polarization, told Newsweek in an interview “And it seems like that shifting.”
According to demographic data compiled in the 2016 and 2020 elections, the top 40 percent of income earners preferred the Democratic candidate for president (i.e., Hillary Clinton or Joe Biden) over the Republican (i.e., Donald Trump), signifying a sizable coalition shift from where the party was in the previous decade. Recent data shows the trend is likely baked in: in a recent CNBC survey, America’s millionaires said they are more likely to support incumbent President Biden over Trump in the upcoming presidential election by double-digit margins.
And most of the nation’s voters are not wealthy.
Of the more than 122 million registered voters in the 2020 election, roughly half reported family incomes of less than $100,000 per year, according to 2021 estimates by the U.S. Census Bureau. Just under 19.7 million reported household incomes between $100,000 and $150,000. About 23 million had household incomes surpassing $150,000 per year.
And that’s just those who responded. Some 21 million registered voters declined to report their income.
Money matters
From 2000 to 2017, political donations by CEOs of S&P 1500 companies showed a significant preference for Republican candidates, according a 2019 paper from the National Bureau of Economic Research. Of the nearly eight dozen donations over $1 million made in the 2016 presidential race, just 18 of them were for Democratic candidates, according to one New York Times review of campaign finance data.
Four years later, however, Democrat Joe Biden benefitted from major contributions from affluent donors in industries like big tech and finance. In the final six months of his campaign, nearly $200 million of his massive war chest had come from donors giving six figures or more. Many were handsomely awarded for it: despite pledges not to give major donors choice positions in his administration, Biden rewarded many of his top bundlers lucrative ambassadorships in countries around the globe despite the fact many clearly lacked any real foreign policy experience.
It was a stunning shift for a party counting figures like Elizabeth Warren and Bernie Sanders who had long raged against the excesses of the country’s wealthiest one percent. But other observers were less than surprised, seeing the shift as a natural conclusion for a shift in the party’s rhetoric that began in the early 1990s.
When voters went to the polls in the 2020 election, Biden outperformed Clinton’s performance among the nation’s most affluent voters by six points, and dominated Trump among upper-middle class voters by double-digit margins.
While Democratic President Bill Clinton famously increased taxes on America’s wealthiest corporations and individuals early in his tenure, he also adopted international trade policies that led to an explosion in corporate profits and productivity at the expense of wage growth. Clinton also had a reputation as being notoriously anti-union dating back to his time in Arkansas state politics, helping pen anti-union advertisements to help buoy Democrat David Pryor’s ascent to the governorship in 1978. President Barack Obama’s legacy was marred by a similar black mark on his record, later earning scorn from late AFL-CIO boss Richard Trumka that Obama—along with Clinton—had let unions down.
“Both of them surrounded themselves with Wall Street people,” Trumka told journalist Jonathan Swan in a 2021 interview for his HBO show with then-outlet, Axios. “And so all of their advice was coming from a Wall Street lens.”
Affluent voters appeared to follow along. According to data from the Roper Center at Cornell University, just 36 percent of earners making more than $75,000 per year voted for Clinton in 1992, while roughly 48 percent voted for Republican incumbent George H.W. Bush. By the 2010s, polling showed Democratic candidates’ electoral appeal among affluent voters had reached above-majority levels. When voters went to the polls in the 2020 election, Biden would outperform Clinton’s performance among the nation’s most affluent voters by six points, and would dominate Trump’s returns among upper-middle class voters by double-digit margins.
Business-friendly liberals
Historic data shows Democratic presidential administrations typically experience higher S&P 500 averages than Republican administrations. Of the top-ten job-creating presidents in U.S. history, six have been Democrats, lending support to the theory Democratic administrations tend to be better for business than Republican ones.
However, their party’s grassroots tend to support policies that run counter to the interests of the ultra-rich. According to averages of Gallup polling compiled since 2008, approximately seven in 10 Democrats and Democratic-leaning independents support heavier taxes on the rich, compared to a consistent third or less of Republicans. And that gap among voters has been growing.
Meanwhile, Democrats that have succeeded in their presidential bids over the past few decades have rarely embodied the policies favored by progressives like Sanders and Representative Alexandria Ocasio-Cortez. And while Biden has embraced progressive policy positions on student loan debt and a federal minimum wage of $15 an hour for federal employees, Democrats overall have shown an aversion to other policies that are gaining favor among party activists, Yale PhD candidate and progressive journalist Sam Zacher argued in a recent paper examining the party’s increasing favorability among the upper class.
One American study of the Democratic Party platform Zacher cited found that while Democratic Party platforms over the years increased its mentions of welfare policies, other policies—like taxes on the rich and higher corporate tax rates—have not received similar mention. Even recent progressive initiatives like the COVID-era relief programs are being rolled back under a recently enacted debt ceiling deal between Democrats and Republicans.
However, in appealing to the rich, Democrats created a sizeable rift not just between party moderates and progressives, but between themselves and the working class, who have recently gravitated to the GOP. In the 2016 election, approximately 60 percent of white working-class voters voted for Trump, according to a Vanderbilt University study. Four years later, demographic data showed Trump’s vote share in lower-income counties across the U.S. increased by several points, while Biden ran up the tally in higher-educated (and more affluent) urban and suburban counties.
Other data shows the working class squarely in conservatives’ domain as well. Republicans represent 64 percent of congressional districts with median incomes below the national median, while nine of the 10 wealthiest congressional districts are represented by Democrats, according to data compiled by Representative Marcy Kaptur’s office. To some degree, Fowler said, the trend is likely explainable in both parties’ rhetoric: Democrats used to embrace the working class, until they didn’t.
“Qualitatively it seemed like there was a pretty big change between 2012 and 2016 in terms of what the parties were talking about,” Fowler told Newsweek. “You had Obama doing a pretty good job going to working-class places in Pennsylvania and Indiana and so forth. By 2016, it almost seemed like it had slipped. Hillary Clinton didn’t make much of an effort to reach out to those working-class voters. Trump is not an everyman by any stretch of the imagination, but he was going to reaching out to those voters and winning them over.”
Sounding the alarm
Zacher told Newsweek that while the party’s richest and more working-class voters are likely to have areas of policy that bind them together, Democrats will continue lose working-class white voters to Republicans as well as progressive spoiler candidates if they don’t take action to decrease cost of living and expand education opportunities.
Mainstream Democrats seem aware of the fact too. In a February address, Biden called on members of the Democratic Party to renew their commitment to the nation’s working class, saying the shift was because the working class believed
“A lot of them came to believe we stopped thinking about the working class the way we used to,” Biden said at the time.
Republican thought leaders, meanwhile, have seized on the opportunity.
Recent columns published by conservative outlets like The National Review have called for an end to government subsidies for corporations long-considered engines for economic development. Conservative pollsters like Rasmussen have also found an increasing affinity for ending “corporate welfare” among Republican voters across the country, while corporations have largely begun taking their cues from an increasingly liberal consumer base on issues like LGBTQ rights and immigration reform, furthering the stark divides growing between progressives and conservatives.
Some, however, believe neither party is fully working to embrace the working class, leading to levels of income inequality bad enough some of the nation’s wealthiest people are beginning to work to convince either major political party—any of them—to begin work to address it.
Millionaire activism
Former BlackRock executive Morris Pearl is one of those.
Once the managing director of one of the world’s most preeminent investment companies, Pearl now serves as chairman of a group of affluent activists called Patriotic Millionaires, a group committed to raising taxes on the rich.
Though Pearl has personally given tens of thousands of dollars in donations to Democratic candidates and causes in recent years, he told Newsweek in an interview he feels neither party is acting urgently to address income inequality—a position he says both are taking at their own peril. And at this point, it’s up to the donor class to begin pushing the issue.
“We’ve seen like, social unrest, we’ve seen people marching in the streets,” Pearl told Newsweek in an interview. “Some of the cause is because people were murdered by police here and there. But I think the root cause is people just not believing they have a chance, sort of believing that our country has been divided in two segments between the very few people that are getting richer and richer and richer, and the one with most people who feel they are falling farther and farther behind every year.”
In an attempt to shift the conversation, Pearl’s group recently traveled to a small, deeply conservative town in North Carolina called Whiteville to talk to voters about their main issue—income inequality—as a sort of test run for their policy approach on a more national scale.
It was a unique choice. The small city of roughly 4,800 is diverse—47 percent white and 41 percent Black, according to 2020 census data—but it’s also poor, and poorly educated. Less than one-quarter of the city’s population holds a bachelor’s degree, while roughly 27 percent live below the poverty line.
It was also highly conservative. In the 2020 presidential election, just under 36 percent of surrounding Columbus County, where Whiteville serves as county seat, voted for a Democrat. It was also a perfect choice, Pearl said, in that it offered them an ideal demographic to begin a dialogue about wealth in the U.S.
Dubbed the Great Economy Project, the organization set out to inspire working people—”the most powerful constituency group in America,” they said on their website—to demand an economy that “puts more money in their pockets and gives their family a chance to thrive regardless of what political party is in charge.” Whiteville, the first of three communities they planned to visit to begin the project, was to be ground zero for the initiative, giving a diverse cohort of the public access to a conversation about wealth and inequality many may not have previously had.
“What we try to focus on is more raising awareness around these issues and then having people from both sides of the aisle demand change,” Cat Hadley, a Truman Scholar and director of the Great Economy Project, told Newsweek in an interview. “So, you know, it’s not about necessarily like going out and telling people how to vote. It’s more about giving them the data to back up their lived experience and inform them how we can help you demand that change, no matter what party you’re in.”
Some of their initial findings seemed to point to a Democratic party that had lost ground with the working class.
While many of the people they spoke to initially favored progressive policies—higher taxes on the rich, a higher minimum wage, less power for the uber-rich—most, Pearl said, outright refused to support Democratic candidates. Over the ensuing several weeks, some in the community began to come around to their position. They underwent workshops focused on increasing levels of pay for CEOs and rising corporate profits the program’s organizers said helped frame conversations of wealth inequality in more tangible terms: rather than feeling helpless, program directors said, the participants in the Whiteville workshop felt inspired, and ready to work for change.
Now, Hadley said, they just need someone to listen.
“Research shows us that conservatives and liberals agree on this issue,” Hadley said. “But it’s not their main issue. There are other things that they focus on that drive votes. What this program is trying to do is make this the number one issue, to get people to look at these systems and how they impact you.”
“I think both sides have to work on this issue,” she added. “I don’t think it’s necessarily one over the other. And I think the only way they’re really going to sit down and work on this is if their constituents demand it.”
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