Can Kamala Harris win on the economy?
Kamala Harris has all but erased Donald Trump’s polling lead in America’s seven swing states, which is testament to the excitement generated by her late entrance into the presidential race. This week, her campaign revved up in each of these battlegrounds. The blitz started on August 6th at a rally in Philadelphia, Pennsylvania, the most crucial of the swing states, where she introduced Tim Walz, Minnesota’s governor, as her running-mate. From there the two were due to hold rallies in the other six states: Wisconsin, Michigan, North Carolina, Georgia, Arizona and Nevada.
In their first joint appearance, she and Mr Walz repeated their warnings that Mr Trump wants to ban abortion, is a threat to democracy and cares only about the rich. Underlying it all was another message—that the American economy is the world’s strongest, and that the country remains a place where people who work hard get ahead. “We fight for a future where we build a broad-based economy, where every American has the opportunity to own a home, to start a business and to build wealth,” Ms Harris told a roaring crowd of her supporters in Philadelphia.
Just 50 miles (80km) up the road from the rally is a town where this sunny message rings true. Bethlehem was immortalised in 1982 by Billy Joel in “Allentown”, a song about Pennsylvania’s industrial decline. The rusted carcass of Bethlehem Steel, once its leading firm, still dominates the skyline. Today, though, it is an atmospheric backdrop for music festivals, outlet shops and a casino. The unemployment rate in the area was just 3.6% in June, a whisker above its lowest in decades and half a point less than the national average. What makes the town fascinating is how it maps onto national politics. It is located in a county, Northampton, that serves as a bellwether for the state as a whole: most voters backed Barack Obama in 2008 and 2012 before defecting to Donald Trump in 2016 and returning to Joe Biden in 2020.
Yet Bethlehem also shows why Ms Harris will struggle to campaign on the strength of the economy. Although plentiful jobs and rising wages would normally boost an incumbent, for the past couple of years surveys have shown that Americans are downcast about the economy. The Democrats have been trying to overcome this by touting development around the country, and in Northampton they have much they can point to. In January Mr Biden visited Allentown, a 20-minute drive from the old steel mill, to highlight how well the economy was faring. The area has added over 30,000 jobs since his election. Real wages are up since before the covid-19 pandemic. Manufacturing is actually making something of a comeback: local investments include $500m in packaging facilities and $7.5m in a bottle factory.
Josh Shapiro, the state’s Democratic governor who was on Ms Harris’s shortlist in her search for a potential vice-president, is also a regular visitor to the area. On July 16th he stood in front of a redbrick office building that once belonged to Bethlehem Steel for a ceremonial signing of the state budget. And in January he was in town to launch an economic strategy. He has a good story to tell: the state’s median hourly wage is nearly a dollar above the national median, just as it was in 1979, before the collapse of the steel industry, according to the Keystone Research Centre, a Pennsylvanian think-tank. The economy helps explain Mr Shapiro’s popularity. About 50% of those in the state approve of his performance, against just 35% who do not.
The hole truth
The halo does not extend to the White House’s management of the economy. Polls gave Mr Biden low marks, with more confidence placed in Mr Trump on economic affairs. Ms Harris is faring better than her boss but is starting in a hole. One explanation is inflation, which voters, rightly, see as more of a national problem than one made locally. Inflation has cooled recently but prices are still up by roughly 20% since Mr Biden took office.
It is something people feel everywhere, says Wayne Milford of Birthright Brewing, a craft brewery and restaurant in Nazareth, a town next to Bethlehem. “I’m having to overpay staff just to keep them working,” he says. Costs have also soared for ingredients—flour, tomatoes, beef, pork and chicken wings. He has fewer customers, and those who come spend less. This might sound inconsistent with resilient consumption figures at the national level. But restaurants reveal that all is not well: in the first half of this year spending on dining out barely rose, growing at its slowest since the start of the pandemic.
Northampton’s politics are muted. More homes fly American flags than display signs for either candidate. Still, party allegiances run deep. At a hardware store the owner, Barbara Werkheiser, greets a stream of customers, politely helping them find paint, valves and tools. But ask her, a Republican, about the economy, and it is a picture of utter gloom. “I don’t see growth. I see struggle. I see supply-chain issues. I see higher costs for products. I see that it’s hard to get reliable help,” she says. She is convinced that things would be better under Mr Trump. “He may be an ass but he was an ass that got things done,” she says. Partisanship has become a crucial variable in the past couple of decades. Republican voters are more optimistic about the economy when a Republican is in the White House, just as Democrats are more positive when one of theirs is president. Motivated reasoning of this sort guarantees tightly contested elections in any state where the population is divided fairly evenly between the two parties.
For Ms Harris there is an extra frustration. In theory, she has a reasonable record to run on, with Mr Biden signing into law big spending programmes for electric vehicles (EVs), infrastructure and semiconductors. In practice, it will be a while before residents notice the results. For instance, the first major slug of EV-factory funding for the region was announced just a few weeks ago, when the administration gave Volvo more than $200m to expand production at facilities including a truck plant. The checkpoint at the local airport, Lehigh Valley International, has been modernised using a $5m federal grant. But a bigger project—$40m for a new logistics and cargo hub—was just approved at the start of this year. “I think it’s a little too early to talk about the actual impact,” says Nicole Radzievich Mertz of the Lehigh Valley Economic Development Corporation.
Each state has idiosyncrasies, and in Pennsylvania one is the tension between energy production and environmental protection. A fracking boom has made it America’s second-biggest gas-producing state. In her failed run in the Democratic primaries in 2020, Ms Harris called for a ban on fracking; Mr Trump is using that as ammunition. But in surveys roughly half of the state’s residents oppose fracking on environmental grounds. Ms Harris has now retreated from her calls for a ban, and appears to support a continuation of fracking with stricter safeguards—basically the same as Mr Shapiro’s position. In Northampton, a hundred miles away from intense fracking activity, that is probably closer to the median view than Mr Trump’s “Drill, baby, drill” mantra. That may help Ms Harris make up for votes she is sure to lose in gas-rich parts of the state.
On the up
As for the big question—which candidate is better for jobs and growth—Northampton also yields an insight into why recent strength is no clinching argument for Ms Harris. Simply put, America’s economy has done well regardless of who occupies the White House. Mr Biden talked about Northampton as if it were a broken rustbelt community before he came to office. In fact, it has been on an upward trajectory for a while. The unemployment rate in the Bethlehem area trended lower throughout most of Mr Obama’s presidency and Mr Trump’s, and went lower still under Mr Biden as the pandemic faded. And household incomes have climbed, rising about 20% in real terms over the past decade.
Politicians love manufacturing. Yet Northampton’s true strength lies in its diversification. During Bethlehem Steel’s glory days, manufacturing accounted for about a fifth of jobs; now, no single industry accounts for more than 11%. Less than two hours’ drive from both New York City and Philadelphia, it has also transformed itself into a logistics hub. Coupled with good schools, pretty town centres and affordable housing, Bethlehem and its neighbouring towns have attracted newcomers. In the past five years their population has risen by 4%, whereas the rest of Pennsylvania’s has grown by 1%.
Many local firms are growing, too. Michael Woodland, owner of a signage franchise, sees a cross-section of Northampton’s economy in his contracts with hospitals, sports teams, the airport and more. Demand has been so robust that he recently bought a new building with nearly 10,000 square feet (930 square metres) of floor space. “We tempered some of what we were doing these past couple of years because the experts were all saying that a recession was coming. Well, it didn’t come, and we kept getting busier,” he says. The main issues in the election are, he thinks, personal and cultural rather than things that will affect business. The one risk that worries him is violence triggered by the election. “But unless it’s completely catastrophic, businesses are going to continue moving forward,” he says. Politics may swing; the economy stays steady. ■