Penn professor Amy Castro Baker explains why Middle America chose Trump

The election of Donald Trump shocked pollsters and many voters. With the dust starting to settle, it appears that a big part of what got overlooked was the depth of continued economic stress in many pockets of the country. For many observers the increasingly positive — if less informative — statistics on national unemployment seem to have passed over an outsized group of voters whose prospects for employment, income growth and personal wealth have been profoundly eroded. From urban centers to mid-sized cities and small towns, particularly in the Rust Belt, the Great Recession of 2008 has imposed a lasting toll. Trump’s successful campaign promises to restore prosperity for them. Amy Castro Baker, a professor at Penn’s School of Social Policy & Practice, discussed these issues on the Knowledge at Wharton show, part of the Wharton Business Radio network on SiriusXM channel 111

An edited transcript of the conversation follows.

Knowledge at Wharton: What was your reaction to the presidential election?

Amy Castro Baker: Stunned is the word I would use. As a social scientist, I am fascinated by the numbers, fascinated by the trends, fascinated by what we expected to see numerically and what did not occur. But as a professor, as someone who is mentoring and advising students, I wear a different hat. When I arrived on campus the morning after the election, for instance, there were students who were visibly upset. My immigrant students were wondering, “What does this mean for my family?” One person asked me rather pointedly, “Does this mean my family will be deported?”

I think there are two sides to it. On one hand, I can look at the numbers and say okay, from a social science perspective, this is fascinating. On the other hand, there are some real human implications behind some of the dialogue that’s taken place over the last year. And I’m fascinated by both sides.

Knowledge at Wharton: Let’s start with the numbers. In the weeks before the election, the polls consistently had Hillary Clinton over Donald Trump by anywhere from two to six points, and they couldn’t have been more wrong. Interestingly, Hillary Clinton won the popular vote but not the electoral college.

Baker: I’m not a pollster, so it’s sort of stepping out of my area of expertise to conjecture. However, I think some of where that is coming from is the fact that we have so many new voters. The other question I really have is going back to conservatives who had been saying they were going to vote for Gary Johnson or Jill Stein, and the numbers just weren’t there. That tells me one of two things: They were planning for voting for Trump all along and just didn’t want to be public about it, or they changed their mind at the last moment. Either way, there’s something about the narrative of the election that I think probably made folks unwilling to be really public about who they intended to vote for. That’s sort of my best guess.

“We have clearly had a market recovery since 2008. However, we have not had a human recovery.”

In terms of the data, I’m not surprised as somebody who studies the working class. They’ve been absolutely eroded in terms of wealth and pay, and they have not recovered yet from the Great Recession, the housing crisis. The numbers are pretty clear on that.

Knowledge at Wharton: There were two core areas that you had to focus on to see the path to the election of Donald Trump. It was the Appalachian Trail area: western Virginia, West Virginia, Kentucky, Tennessee and North Carolina. Then the Rust Belt area: Pennsylvania, Ohio, Michigan and Wisconsin. Those are all people who were middle class 15 or 20 years ago, but have been affected by the economy.

Baker: Absolutely. The way that I talk about it in my research is that we have clearly had a market recovery since 2008. However, we have not had a human recovery. The neighborhoods, the communities, the rural areas have not recovered. I specifically study housing. Even when we look at the housing bounce-back, we’re seeing housing sales rising, we’re seeing movement in that market. However, it’s not in those places and spaces.

We’re talking about people who have worked hard their entire lives, feel as though they’ve played by the rules, and they’re losing. In my work, what I’m seeing is an extreme asset depletion just as folks are hitting older adulthood. They’ve expected to hit that empty nest stage in life and have something to fall back on. Instead, they’re fighting the recovery on two fronts in terms of the loss of their home equity and loss of jobs. They are sort of trapped on both sides, and I think there is something about Trump that speaks to that.

Knowledge at Wharton: You also have young adults who have recently graduated from college who are still living at home or renting because they cannot afford or don’t want to buy property right now. That’s a dynamic in the housing sector right now that I think the building companies and others are still trying to figure out.

Baker: You could not be more correct about that. We have this gap in the market in terms of housing. Right now, 55% of Americans are spending more than half of their income on rent, mortgage and utilities. That’s astounding. The rule of thumb in real estate is 30%. It’s not as though people’s eyes are bigger than their wallets. That’s not really what we’re seeing in the data. What we’re seeing in the data is that there’s a lack of affordable housing. Housing is sucking up all those extra resources that in the past would have gone towards savings, towards asset accumulation, towards building wealth that will protect people as they’re aging.

As someone who specifically studies underserved populations, what I’m really worried about are the low-income people who have always been on the bottom. We’re talking a lot about the middle class. We’re talking a lot about the working class. That’s important. That’s crucial. It’s clearly played a role in the election. However, we also have to ask the question, “What about the folks who have always been at the bottom?”

Knowledge at Wharton: The Democratic Party expected a lot of those people to come out and vote, and they were the ones who didn’t. In Philadelphia, in inner-city Detroit, in Cleveland, Milwaukee. Those are the people that fall into that category that you’re talking about.

Baker: Yes. When we look at the language that surrounded the election the past year, we’ve heard a lot about jobs. We’ve heard a lot about issues of immigration, issues of employment. But we haven’t been talking about the people at the bottom. That’s really a problem.

In my research, I have new work that’s coming out that shows that older African-American women have lost 97% of their wealth from the beginning of the housing crisis until 2012. And we’re not talking about that. So, what motivation do they have to get to the polls when we’re not talking about the extreme issues of poverty that people are living with and dealing with? Even just on a practical matter, when you’re working multiple jobs and juggling multiple things, their concerns have not been brought to the forefront. I can’t say empirically, but my guess is that’s a disincentive to get to the polls.

“What we’re seeing are a real erosion of assets and wealth. People just don’t have things to protect them in the economy anymore.”

Knowledge at Wharton: We have seen a bounce-back if you look at the monthly job numbers from the U.S. Department of Labor. But we’re still fighting an uphill battle from where we were 10 years ago. We’re at about the same level pay, but the cost of everything has skyrocketed.

Baker: Exactly. Pay has stagnated, while at the same time the cost of living is going up. We talk a lot about wage gaps and pay gaps, but it’s really more about a wealth gap. We’re talking about communities of people, both in those rural areas that came out strong for Trump and also in the city, where historically folks have voted for the Democratic Party. What we’re seeing are a real erosion of assets and wealth. People just don’t have things to protect them in the economy anymore.

Knowledge at Wharton: One of the ballot initiatives that was bounced around in a few states involved an increase in the minimum wage. A couple of states bumped up their minimum wage. What do you think is the level effect of those moves?

Baker: It’s difficult to say because we don’t have enough data moving forward yet to know how much of a bump that’s going to give people. It absolutely helps when people have more money in their paycheck. But again, going back to that housing piece, when people are spending around half of their income on housing, there’s not much left for anything else, even at $12 an hour.

Knowledge at Wharton: Is this going to end up being a lost generation because of the people who had wealth in their 40s and 50s when the recession hit, they’ve had to stay working longer because of this? Are we not going to see this really bounce back until the millennials get to be in their 40s and 50s?

Baker: The optimist in me says, “I hope not.” But at the same time, it doesn’t appear that they’re not going to be a lost generation. I think in a way, they probably are going to be. As a researcher, part of what I look at is not just the individual balance sheet, but who’s relying on that balance sheet. If we’re talking about a single woman or a single man, who is relying on that income? Who are they caring for? Are they caring for aging parents? Do they have kids leaving college? Do they have nieces and nephews that they’re responsible for? When there’s just less there for them to buffer against market risk, we don’t really know how we’re going to pay for it.

“There is no state in the United States where someone can afford median rent on the minimum wage.”

One of the things that I’ve seen in my work, and others have seen as well, is that because folks are working in sectors of the economy that are really hard on the body, they’re being diagnosed with diseases much earlier than they would be otherwise. They’re essentially becoming disabled earlier in life, but before they’re eligible for things like Medicare. When we look at the numbers of who came out strong for Trump, I’m seeing things line up there in terms of whether or not people are aging and whether they have access to medical care and supports that they need.

Knowledge at Wharton: California is probably a world unto its own with the way that housing prices have soared there. Even renting is a challenge there these days.

Baker: We’re seeing similar dynamics in other parts of the country. There is no state in the United States where someone can afford median rent on the minimum wage. It’s not possible. Those issues are at play everywhere.

Right now in the United States, in 151 zip codes, at least 50% of all mortgages are underwater. What we have is a stagnant housing market where people are trapped. They’re owing more on their homes than the property is worth, which is really a problem. As far as the generational aspect of it goes, the question to me is, what’s going to happen to the tax base? When people cannot afford to buy a home, what we’re doing is eroding how much money is left over for other things.