Ordinary Citizens Care Less About the Macro Economy, Job Opportunities Matter Though!

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  • The global community is experiencing several challenges on the economic front has been extensively debated over the last couple of years. The pandemic and the ongoing Russia-Ukraine war have further exacerbated the already fragile economic conditions around the world.  Irrespective of their standing in the global hierarchy, countries are struggling to keep the surging inflationary trends under check.  Apart from inflation, the lack of jobs and opportunities is another grave concern for the authorities desperately wishing to stave off the mounting existential challenges.  Amid all this, there are domestic election-related challenges to counter for the beleaguered establishments.

PC: AIER

  • How some of these countries are faring on this front? Let’s look at this vexed issue.  Of course, we know that Indian democracy perpetually witnesses one or the other election throughout the year.  It could be local bodies, legislative assemblies/councils, and by-polls.  Brazil went to polls recently to elect the president.  The USA went into midterm elections which garnered huge attention worldwide.  However, it was a poor outing for American pollsters who predicted a right-wing wave.  History shows that low presidential approval ratings almost always drag down the incumbent party in the US midterms.  Indeed, the Obama-Biden team suffered so painfully in their first midterms that the former called it a shellacking.
  • This time what pumped up Republican prospects, even more, was inflation, with US fuel prices up 60% since Biden took office. There is a lesson to be learned from the results here. It would be unwise of incumbents across other major economies/democracies to deduce that economy doesn’t matter.  The key takeaway from the US is that when inflation is a big negative for the incumbent, a robust job market can take some of the stings away.  Incredibly, the US unemployment rate is near a 50-year low.  US voters, like voters elsewhere, may not care about the macro economy but plentiful jobs are as much of a personal experience as high inflation is.  In India, the coming Gujarat/Himachal polls may be the first test of inflation’s impact on voters.  Inflation will be a definite factor to contend with.

PC: Katrina Gracia Consebido

  • Also, most low-income Indian voters are not experiencing a robust job market. Here, the impact of inflation will depend on how other factors like free food mitigating high prices eventually play out.  Perhaps, a bigger lesson is that high-pitched rhetoric and extreme ideological positions ’don’t always play well.  Exit polls in the US indicate that the share of voters who felt abortion rights were the most important issue was almost as large as those who flagged inflation.  The role of polarization too was limited.  Yes, the political masters cannot take the voters for granted by whipping up frenzy and emotions.  Ultimately what matters on the ground is pragmatism and centrism with visibility of action to boot.  Mere rhetorical promises without an actionable plan are bound to come a copper.  Indian political masters must be wary of this aspect.