By Les Leopold / Substack
President Biden trails Donald Trump by 20 points in the key swing states of Arizona, Georgia, Michigan, North Carolina, Nevada, Pennsylvania, and Wisconsin when people are asked who “is best able to handle the economy,” according to a recent Wall Street Journal poll.
To many pundits this makes no sense. During the Biden administration unemployment has been near all-time lows, wages have been rising, and, after a spurt, inflation has been falling. The Wall Street Journal poll also showed that most people say their states are doing well economically, and a Quinnipiac poll shows that most believe they are doing well personally.
Robert Reich, who I greatly respect, tells us not to worry. “There’s always a time lag,” he wrote recently in his newsletter, “between when the economy turns positive and when voters begin to feel more positive about an administration.” He estimates it will take another three to four months for the voter vibes to catch up with the good economy, just in time for the election.
Economist Paul Krugman blames the disconnect on partisanship: Republicans believe that when a Democrat is in the presidency, the economy must be doing poorly. He urges progressives to celebrate the Biden achievements. “The truth is,” he warns, “the U.S. economy is a remarkable success story. Don’t let anyone tell you that it isn’t.”
Well, I’m about to do just that.
I fear that Reich and Krugman may be underestimating a devastating economic problem that the Democrats have ignored for more than a generation: mass layoffs. And this is a problem that will not go away by November.
In January, 90,309 jobs were cut, according to the Challenger Report. In the high-tech sector, 260,000 workers lost their jobs in 2023, and another 57,000 so far this year. Approximately, four million workers have been laid off since Biden came into office.
But wait! Aren’t those job-loss numbers dwarfed by the 14.8 million new jobs created since the Biden inauguration? Won’t that jobs boom soon sink into public consciousness, just as Reich is predicting?
Maybe not. That’s because there’s a big difference between finding a new job because you want to and scrambling to find a job because you’ve been laid off. If your factory shuts down in rural Pennsylvania, for example, finding a new job could feel like hell on earth as you, and a thousand of your former co-workers, scramble for the last jobs at the Dollar Store or Walmart.
You’re not about to reward those in power for the pain and suffering caused by being laid off due to no fault of your own.
In addition to the financial loss, the damage done to laid off workers’ health is considerable. Studies show that:
- Losing your job is the seventh most stressful life event, more stressful than divorce, a sudden and serious impairment of hearing or vision, or the death of a close friend.Â
- Recovery from the psychological trauma takes two years on average.
- Even for those without preexisting health conditions, the odds of developing a new health condition after being laid off rise by 83 percent in the first 15 to 18 months.Â
- Fetal development in pregnant laid off workers can be impaired.Â
- The risk of suicide, drug addiction, and depression increases.Â
The U.S. Department of Labor recognizes that “being laid off from your job is one of the most traumatic events you can experience in life.”
If Biden wants to gain more support, he should take a page from Donald Trump and intervene directly to stop mass layoffs. When Trump stepped in and prevented Carrier Air Conditioning from moving a plant to Mexico in 2017, it was widely popular. Finally, a politician stopped a layoff!
Why did Carrier give in? Because of the leverage inherent in the power of the presidency. As the CEO of United Technologies, Carrier’s parent company, put it: “I was born at night, but not last night; I know that ten percent of our revenue comes from the U.S. government.”
The federal government awards approximately $700 billion per year in federal contracts. What if the Biden administration added one simple clause: “No compulsory layoffs.”
If corporations with federal contracts want to lay off workers, they should have to buy them out. Layoffs would need to be voluntary. The logic is simple: If a corporation takes taxpayer money, it should not be laying off taxpayers. If that’s too much of a restriction, corporations are free to refuse federal contracts and government subsidies.
That would get the attention of working-class voters.
The blowback from corporate America, of course, would be fierce. Biden would be viciously attacked and accused of every socialist sin imaginable. It would take real nerve to let corporations know that they can’t take our tax dollars and then destroy our jobs.  Franklin D. Roosevelt knew exactly what to say in 1936 when faced with these kinds of attacks during his first term as president:
We had to struggle with the old enemies of peace — business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.
They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.
Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me–and I welcome their hatred.
I should like to have it said of my first Administration that in it the forces of selfishness and of lust for power met their match. I should like to have it said of my second Administration that in it these forces met their master.
The country may again be ready for that fight. But are the Democrats?
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Les Leopold
After graduating from Oberlin College and Princeton University’s School of Public and International Affairs, Les Leopold co-founded the Labor Institute in 1976, a nonprofit organization that designs research and educational programs on occupational safety and health, the environment, and economics for unions, worker centers, and community organizations. He continues to serve as executive director of the Labor Institute and is currently working to build a national economic educational train-the-trainer program with unions and community groups.