Looking at recent public polling, it’s clear that inflation is now Americans’ biggest economic worry. As a polling report from The Economist and YouGov notes: “Inflation dominates a majority of Americans’ worries about the economy: 81% call it a serious problem. Most say ‘the prices of goods and services you buy’ (52%) are the best indicator of the health of the economy – more than name the jobless rate (17%), the stock market (6%), or even their own personal finances (11%).”
So, what should political leaders do about it?
The YouGov study asked Americans which measures intended to reduce inflation are “a good idea” or “a bad idea.” Interestingly, the best-performing idea is providing child care support to reduce worker shortages—with roughly 2-to-1 approval, or 51 percent to 26 percent. However, there is a predictable partisan split, with Democrats far more likely than Republicans to deem this approach a good idea. (see Figure 1)
Beyond child care, support mostly drops off, with the next-highest-rated idea being steps to punish companies participating in anti-competitive behavior. Forty-four percent of adults overall see this as a good idea, with 52 percent of Democrats agreeing, compared with roughly one-third of Republicans.
But there is one thing pretty much all Americans—regardless of partisan identification—agree on: Policymakers should not let unemployment go up. Just 11 percent of Democrats, 10 percent of Republicans, 11 percent of 2020 Biden voters, 9 percent of 2020 Trump voters, and 11 percent of liberals and conservatives think it’s a good idea for unemployment to rise.
What’s the point on inflation? Help people get back to work with child care support, but don’t force people out of work to drive down costs.
Here, at least, all Americans agree: Don’t mess with full employment. A repeat of the 1980s-style effort to curb inflation by drastically increasing interest rates, which in turn led to massive job losses, is not a scenario Americans want to see repeated. Now that Americans are closer to full employment after the pandemic drop, they are very reluctant to give it up.