Inflation weighs down Democrats heading into 2022

Michigan voters concerned about rising costs, scarce labor

 A sign reading “Elf Wanted” is seen in a store window in downtown Rochester, Mich., earlier this month. (Paul M. Krawzak/CQ Roll Call)
A sign reading “Elf Wanted” is seen in a store window in downtown Rochester, Mich., earlier this month. (Paul M. Krawzak/CQ Roll Call)
Posted November 18, 2021 at 5:30am

ROCHESTER HILLS, Mich. — It’s the busiest time of year for Craig Gubert’s holiday decorating business, and he can’t find workers.

Gubert, 47, was shopping last week at Target for his company Lights Up, which festoons homes and businesses with Christmas lights. A registered Democrat who describes himself as “not too political,” he wasn’t ready to cast blame for his economic woes.

But a labor shortage and the steepest inflation in three decades is being felt acutely in this corner of southeast Michigan, based on interviews with about three dozen residents of Oakland County — the state’s second-most populous after neighboring Wayne County, home to Detroit.

Gubert described a phenomenon economists call “ghosting,” in which job applicants are hired but vanish before their start date. “I’m getting lots of people applying, accepting the job and then not showing up,” he said.

That’s despite offers of higher pay, which Gubert said is “probably my biggest cost increase for my business.” That’s OK, he said, because “I can increase my cost to my customers a little bit.”

Costs are certainly up. Inflation over the past 12 months in the Detroit area, which includes Oakland County, was 5.5 percent. That’s a little under the national average of 6.2 percent, according to the Labor Department, but still the highest since 1990.

Diana Petros, a nanny who lives here, estimates her grocery bills have gone from around $70 a few months ago to over $100 recently. “I feel like I can’t buy as much as I need anymore,” she said.

Petros, 23, said she leans “more towards the middle” politically — like much of this swing-voting suburb about 25 miles north of downtown Detroit.

Over the past three presidential elections, Rochester Hills voters have shifted 13 points towards Democrats, from a 10-point win for Republican Mitt Romney — now a senator from Utah — to a 3-point win for Democrat Joe Biden eight years later, with a 6-point victory for Republican Donald Trump in between.

Oakland County as a whole is more liberal, but the trend is similar — Biden expanded on 8-point wins for Hillary Clinton and Barack Obama to a 14-point victory over Trump last year.

Senate races in Oakland County haven’t been close recently, but Rochester Hills has been tight: Democrat Debbie Stabenow eked out slim margins in her last two races and fellow Democrat Gary Peters lost by less than 1 point last year and almost 3 points in 2014.

Second-term Democratic Rep. Elissa Slotkin, who represents about 90 percent of Rochester Hills, has had better luck, widening her winning margin from 2 points in 2018 to 7 points last year. Haley Stevens, another sophomore who flipped a GOP seat, was born in and lives in Rochester Hills. She represents the remaining sliver of its voters but hasn’t fared quite as well, losing that part of town by 74 votes in 2018 and 216 last year.

Redistricting limbo

Stevens and Slotkin are on the GOP’s target list for 2022, but Michigan is losing one of its 14 House districts to reapportionment next year and it’s unclear if either of them will be vying to represent Rochester Hills in the next Congress after a state commission redraws the map.

Slotkin lives in Holly, in the northwest corner of Oakland County, but she could end up running in a district focused around Lansing if Rochester Hills becomes part of another district, possibly one that takes in much of the area now represented by Democrat Andy Levin.

Levin couldn’t be reached for comment. But a Macomb County-based district under consideration by the commission may be more of a natural fit for him, despite the addition of more conservative areas currently represented by GOP freshman Rep. Lisa McClain.

The Levin name remains political gold in that part of the state. Levin’s father is former Rep. Sander Levin who held the seat from 1983 until his retirement after the 2018 elections. His uncle is former Michigan Sen. Carl Levin who died earlier this year.

While Trump won Macomb twice by large margins, House Democrats have outperformed Biden and Clinton there largely due to big wins by the Levins, representing over half the county’s voters.

‘Spending way too much’

Wherever the Democrats in the delegation run, their party’s control of both chambers and the White House means they’ll be responsible for the economy on the campaign trail. If it’s up, they’ll benefit, and if it’s down, or voters think it’s down, they’ll suffer.

Richard Leary, a retired engineer from Troy who was also shopping at the Rochester Hills Target, said inflation was a “significant issue” affecting his political outlook even though he believes he’s better insulated since his home and car have been paid off.

“The current administration is spending way too much money and that could have an effect more down the road in keeping the inflation fires stoked,” said Leary, 68. He voted for Trump in 2016 but became disenchanted with the party’s direction and backed Biden last year, as well as Stevens.

Leary said he supported the infrastructure bill (now law) but not the larger budget reconciliation package the House is debating this week. He cited “massive spending” and debt that would be left to his three grandchildren. Leary also faults Democrats for trying to shut down the 68-year-old Enbridge Line 5 oil and gas pipeline, which critics say would further increase already soaring energy costs.

A bicyclist rides through downtown Rochester earlier this month. (Paul M. Krawzak/CQ Roll Call)

Leary said he likes Stevens because “she’s done a good job” and hasn’t been “quite so taken over maybe by the liberal views” of others. But he said that he could vote for a mainstream GOP candidate, and that he’d be less likely to vote Democratic if the candidate were someone to the left of Stevens — such as Levin.

Leaning Republican

Steven Nguyen, 21, whose family owns a Rochester Hills nail salon, attends Oakland University, where he’s studying, of all things, supply chain management. He says the worker shortage is hurting the family business.

“There’s a lot of people that are just living off unemployment,” he said. “We’re having so much trouble finding employees.”

Nguyen wouldn’t say how he voted last year but described himself as a libertarian and said Trump “did a good job” handling the economy. Nguyen said he’s disappointed with Biden and “right now I’m leaning more towards Republican” in the midterms and in 2024.

Labor shortages and inflation can go hand in hand. Workers command higher pay that gets passed on to consumers, and empty positions mean canceled orders, delayed deliveries and greater scarcity — and therefore higher prices.

The number of job openings eased off its July record but was a still-lofty 10.4 million in September, the Labor Department said — and the number of people quitting their jobs hit a new record that month.

Gabriel Ehrlich, an economic forecaster at the University of Michigan, said a lingering fear of COVID-19 is keeping away workers from jobs that could expose them or those who have caregiving obligations. But he added that “a lot of income support from the government” also plays a role.

“I do think that people will come back both as COVID improves and as people spend through that savings,” said Ehrlich, a former Congressional Budget Office analyst. For now, Ehrlich said, the worker shortage is “a sign people are confident there are going to be other jobs out there.”

A recent Gallup poll found the number of Americans naming inflation the country’s No. 1 problem was at its highest since 2008. And while such concerns aren’t nearly as widespread as in the 1970s and early 1980s, no one knows whether the inflation threat will ultimately prove “transitory” as Biden supporters have described it.

Ronald L. Tracy, an economist at Oakland University, sees a parallel between the high inflation that contributed to the downfall of Jimmy Carter’s presidency and now.

“When people and firms start expecting inflation, it changes the game, and that is where I see potential similarities to the very late ’70s into the early ’80s,” he said. “I don’t believe we’re going to see inflation dropping quickly.”

Jim Cruitt is a retired computer systems analyst from Rochester Hills who describes himself as an “independent leaning left.” He said that from what he’s heard, the reconciliation bill “has a lot of good points.” But, he added, “You’ve got to moderate that so it doesn’t go crazy.”

“Inflation might be a problem,” Cruitt said. “But we’ll have to wait and see.”

For her part, Stevens says the reconciliation package would lower household costs for things such as prescription drugs and child care, and help get people back into the workforce rather than boost inflation.

“I had one individual in my district tell me, ‘Hey, I am so eager to get back to work, I can’t wait to get back to work,’” Stevens said. But the constituent would be paid $15 an hour in the job and said, “I can’t get anyone to watch the kids for under $16 an hour.”

‘I woke up’

Democrats’ string of good fortune in Oakland County has been fueled by large pockets of support in urban areas like Pontiac and suburbs, including Farmington Hills and Southfield. That’s masked some erosion of backing among another traditional party base: union voters.

John, 55, lives in Bloomfield Hills, an affluent GOP-leaning city in Stevens’ district that would likely end up in a redrawn version she wants to run in. A Ford Motor Co. worker who wouldn’t give his last name, John pointed to the United Auto Workers emblem on his jacket as the reason he used to vote Democratic — before Trump came along.

“I woke up,” he said. 

Of his fellow union members, “It’s a divided house, I can honestly say, which it never was before,” John said. “In the last five years, things have changed a lot.”

Biden, who visited a General Motors Corp. plant in Detroit on Wednesday to tout his infrastructure law, likes to take credit for helping to save the U.S. auto industry during his time as Obama’s vice president. Many argue the industry wouldn’t be back on its feet without loans from the government in 2009. 

But John said Biden’s policies today, again involving a healthy dose of government aid, aren’t bringing him back into the fold.

“I can’t stand how things are,” he said, citing rising prices and labor shortages. “This is just something that has spun out of control.”

Peter Cohn contributed to this report.