09/02/2026
Pocketbook issues are often assumed to drive elections. But new research suggests it’s more specific than just “the economy, stupid.”
A National Bureau of Economic Research working paper by Haas Professor Francesco Trebbi and Georgetown’s Juan Felipe Riaño finds that inflation itself wasn’t what cost incumbents votes in 2024. It was falling real wages.
Using county-level data, the researchers found that once real wage growth is accounted for, counties with higher inflation actually shifted less toward Republicans—a reversal traced to wealthier, more urbanized counties where prices rose fastest but wages kept pace.
The implication for 2026: the same dynamic that helped Republicans in 2024 could work against them now.
”They are the incumbents now and real wages have been growing at half the pace of real GDP over the last two years,” Trebbi notes.
The research offers data-driven nuance on the most consequential economic issue in recent elections. Read more: https://newsroom.haas.berkeley.edu/falling-wages-not-rising-prices-drove-the-2024-election/