How Income Inequality Led to Tighter Presidential Elections

On November 6 1984 Americans overwhelmingly reelected incumbent president Ronald Reagan over Democratic challenger Walter Mondale. It was a beatdown of epic proportions. Reagan carried 49 states and won by over an 18% margin of the popular vote. It’s the kind of presidential victory that seems unimaginable to us in 2022 when every election comes down to a handful of tightly contested swing states and fewer people switch parties.

Democrat Libby Vince says, “with the current policies and platforms of the Republican party, I cannot foresee an issue that I would see them on the right side, and the Democrats on the wrong side.”

That is a common sentiment now but it wasn’t always like that, what happened in 1984 was not unusual in the 1900s.

Out of the 25 elections between 1900 to 1996 ten of them were won by over 15% of the popular vote. To put that in sports terms, they were blowouts. Another 10 were won by over 5% of the popular vote, again in sports terms, these were comfortable wins.

In fact, out of the 25 elections in the 1900s, only two were won by less than 2% of the popular vote and three were won by less than 5%. To put that into perspective, that has happened the exact same number of times since 2000.

Why is that, were Americans more willing to root for the Lakers one day and the Celtics the next?

The answer to this question may lie in another set of presidential elections. The six elections from 1876 to 1896 bear a striking resemblance to the last six. Four of those elections were decided by less than 2% of the popular vote. In two elections a candidate won the popular vote but lost the election. That wouldn’t happen again until 2000 and 2016.

History professor Joshua Ashenmiller says, “After reconstruction, white southerners, almost to a person, voted for the Democratic party…The Republican party was the party of Lincoln, they're the party they blamed for starting the Civil War, they're the party they blamed for destroying the South during the Civil War, and they’re the party they blamed for trying to enforce racial equality after the Civil War.”

1876 to 1896 is when reconstruction ends and the industrial age begins. The northern economy experienced an influx of immigration and growth as the southern economy struggled. Leading to a convergence of social issues, identity politics and an uneven economy.

“If you were an immigrant in a northern city like New York or Chicago, you tended to vote Democratic because the Democratic Party was the party that was helping immigrants find jobs, find places to live, and get social services. So, kind of like today, it was wrapped up in people's identity,” says Ashenmiller.

Two things happened in 1920 that would change the path of American history and lead to more lopsided election results though.

First, the 19th Amendment gave women the right to vote, immediately and dramatically increasing the number of eligible voters.

Second, coming out of the Industrial Revolution and the Gilded Age which saw massive income inequality, 1920 was the first year this trend started to reverse. A trend that would continue until 1980.

Jacob R. Gunderson a political science doctorate student cites a study in his 2019 paper titled, When Does Income Inequality Cause Polarization? that suggests polarization and income inequality are related under “permissive electoral systems”. Some would argue that the United States fits that description, meaning parties move further from the median voter and toward the extremes when there are high levels of income inequality, as there are now and as there were during the Industrial Revolution.

This bears out in our presidential elections. From 1920-1980 income inequality shrinks significantly in the United States. 11 of the 16 presidential elections during that time period are won by 9.8% of the popular vote or more. Also, the average election is won by 13.6% of the popular vote.

Elections from 2000-2020 were won by an average of 3.42% of the popular vote. Elections between 1876 and 1896 were won by an average popular vote of only 1.96%. In both cases, the country is facing unprecedented levels of income inequality and, in both cases, elections become very tight.

Jodi Balma a political science professor says, “One of the things that got us out of the Great Depression is we taxed the hell out of wealthy people during World War II, a 90% marginal tax rate… And it was a huge deal that Reagan came in and dropped that”.

It’s important to point out that every election is different and there are exceptions to the rule. But the question remains will we ever see a presidential election trend as we did in the 1900s in the United States again? It seems unlikely given where we’re at not just with income inequality but also with the rise of siloed news media.

One way a blowout election could happen is if an ex-Republican president, with a fervent base of about 25-30% of the electorate ran as a third-party candidate. Theodore Roosevelt did it in 1912, splitting the Republican vote with William Howard Taft, handing democrat Woodrow Wilson an 18.6% margin of victory in the popular vote over Roosevelt. A blowout, with an asterisk.  

Speaking to this possibility Ashenmiller says, “I'm a historian, I don't study the future. I mean, it could happen.”