Category: The Rise of Populism

Overview

In the early 2000s, manufacturing-intensive communities in the United States entered a period of economic upheaval that would reshape their labor markets over the next two decades. China’s dramatic rise as the world’s leading exporter of manufactured goods, abetted by receipt of Permanent Normal Trade Relations from the United States in 2000 and accession to the World Trade Organization in 2001, exerted immense pressure on manufacturing in the United States and many other high-income countries.¹ Entire industries—textiles, furniture, and home electronics among them—struggled to compete with surges of low-cost imports.

In the United States, the China trade shock accounts for approximately one-quarter of the decline in manufacturing jobs between 2000 and 2007.² Although the aggregate loss of U.S. manufacturing jobs attributable to China’s changing competitive position in those 7 years—approximately 1.5 million to 2 million manufacturing jobs lost—is modest relative to the overall size of the U.S. labor market, these impacts are highly geographically concentrated, meaning that they loom large in places that specialize in producing the goods in which China rapidly gained global market share.

While economists anticipated manufacturing workers in heavily China-shocked locations to encounter some difficulties in adjusting to changing labor market conditions over the course of their careers, the extent of the disruption and the slow and faltering pace of adjustment proved far more severe than expected. The economic distress brought on by the China trade shock reshaped the lives of U.S. workers and families in trade-exposed regions along multiple dimensions. Earnings for low-wage workers fell.³ Children became more likely to live in poor, single-parent households.⁴ And deaths of despair among working age-adults—primarily due to drug overdoses among men—increased.⁵

The profound economic and social consequences of the China trade shock shaped U.S. political preferences and electoral results. Across the country, trade-exposed regions became more likely to elect politicians from the right wing of the Republican party, often at the expense of moderate Democrats.⁶ The same trends are evident in European countries, where local exposure to Chinese import competition similarly favored nationalist and isolationist parties.⁷

This essay provides an empirically grounded perspective on how the China trade shock of the early 2000s shaped the evolution of trade-exposed local labor markets in the United States during the ensuing two decades, from the onset of the 21st century to the year prior to the COVID-19 pandemic of 2020. Much of the extant research on the China trade shock focuses on the first decade of the 2000s, when China’s goods exports to the United States and other high-income countries surged. Chinese exports to the United States stabilized (at high levels) after approximately 2010, however, thereby affording a sufficient time window to characterize how trade-exposed local labor markets and workers adapt to changed circumstances.

Examining changes in the labor market composition of communities affected by the China trade shock alongside the evolving prospects of their incumbent workers, relative to less affected communities across the United States, provides economic context for understanding how individual experiences of globalization may contribute to the rise in right-wing populism. To provide this long-term perspective, we draw on annual worker-level data on earnings, employment, and geographic movement from the U.S. Census Bureau’s Longitudinal Employer-Household Dynamic data, which we augment with data from several other sources.

These data facilitate two vantage points for understanding the adaptation of U.S. workers and their local labor markets to the China trade shock. The first characterizes how trade-exposed places adapted, meaning how employment, industrial structure, and earnings evolved in these locations. The second characterizes how trade-exposed people adapted, referring to paths of employment, earnings, and the geographic and sectoral mobility of workers who were employed in highly exposed labor markets in the year 2000. These two perspectives suggest distinctly different conclusions about the nature and extent of the recovery from the shock.

The first key finding of our study—and an unexpected one—from the perspective of places is that starting approximately one decade after the onset of the China trade shock in the early 2000s, trade-exposed local labor markets began to recover robustly. This recovery was enabled by the entry of a demographically distinct set of workers from the previous groups of incumbent workers. These entrants were disproportionately younger (under age 18 at the time of the shock onset), female, U.S.-born Hispanic, foreign-born non-Hispanic, and college-educated workers.

These new local labor market entrants disproportionately flowed into nonmanufacturing employment, typically into low-wage sectors with lower earnings than the manufacturing industries displaced by the China trade shock. This rapid, post-2010 transformation of the industrial and demographic structure of trade-exposed labor markets arguably reflects a manifestation of what the economist Joseph Schumpeter termed “creative destruction.”

The second key finding, from the vantage point of people, is that we find no similar worker-level dynamism. Although employment in manufacturing drops steeply and persistently in the two decades after the China trade shock, this contraction is due to the decline in workers entering manufacturing, not due to greater mobility out of manufacturing jobs by incumbent workers to other labor markets or sectors.

Indeed, only a small share of incumbent manufacturing workers moved to nonmanufacturing jobs, while another subset of these workers simply exited the labor market altogether. The majority, however, remain in manufacturing until retirement, albeit with diminished earnings growth. And opposite to the widely held expectation that incumbent workers in trade-exposed places would relocate to growing labor markets elsewhere, we instead find reduced outmigration of incumbent workers, perhaps reflecting the difficulty of relocating their households under economic duress.

Seen from the perspective of incumbent workers—particularly, U.S.-born, noncollege, White males, who are heavily overrepresented in manufacturing—the adjustment therefore looks static and largely unsuccessful, as another essay in our series also explores.⁸ These workers age in place as the labor market changes dramatically around them.

In short, labor market adaptation to the China trade shock appears generational. Incumbent manufacturing workers remained largely frozen in the declining manufacturing sector in their original locations, while a fresh set of workers—mostly younger, demographically distinct, and, in many cases, immigrants—entered employment in nonmanufacturing sectors of these local economies. At the level of local labor markets, this looks like a long-run adjustment, but it is easy to see how the dynamic of incumbent manufacturing workers slowly adjusting to living in rapidly changing places might give rise to divisive politics. We return to this point at the close of this essay.

U.S. manufacturing did not recover from the China trade shock

Manufacturing industries historically provided relatively high-paying job opportunities for workers without 4-year college degrees, whom we refer to as noncollege workers for brevity. Forty-three percent of noncollege manufacturing workers in 2000 were in the top one-third of all wage earners, as compared to only 23 percent of noncollege workers in nonmanufacturing jobs.⁹ Throughout the 2000s, manufacturing as a share of all jobs sharply declined: At the outset of 2000, manufacturing encompassed 13.2 percent of total U.S. employment. By the close of 2019, that share was 8.4 percent.¹⁰

To characterize the relationship between exposure to trade shocks and labor market adjustments, our analysis reports the estimated impact of a one-unit (one standard deviation) trade shock between 2000 and 2007 (the height of the China shock, prior to the Great Recession of 2007–2009) on the manufacturing employment in U.S. commuting zones over varying time horizons. This impact is expressed as a percentage of the total local working-age populations in these commuting zones in 2000.

The role of the China trade shock in the decline in manufacturing employment is large, persistent, and cumulative. Between 2000 and 2019, manufacturing employment as a share of places’ initial working-age populations fell by an average of 1.4 percentage points per standard deviation of import exposure—amounting to the net displacement of 1 in 7 manufacturing workers. More than one-third of manufacturing workers (36 percent) were exposed to a shock of at least this size. (See Figure 1.)

Figure 1

Economic theory suggests four main channels by which workers will adjust to adverse trade shocks. Workers will flow into and out of employment. They will flow across sectors, from manufacturing and nonmanufacturing jobs. They will flow to jobs in different labor markets that are presumably less exposed to trade shocks. And older workers will flow into retirement, replaced by young adults reaching working age. None of these four channels appear to have operated as robustly as economic theory expected in response to the China trade shock.

What’s more, the inflow of immigrant workers is the opposite of what economic theory predicts. In general, economists expect places experiencing economic duress to attract relatively few new job-seeking entrants. And in the case of U.S.-born White and Black workers, this is precisely what we find. But after 2010, trade-exposed local labor markets saw large influxes of U.S.-born Hispanic adults and foreign-born adults (primarily non-Hispanics).

Foreign-born workers, who tend to be much more geographically mobile than U.S.-born workers, tend to flow toward places with strong job growth in new, expanding industries, such as biotech, digital technology, and business and professional services. This is what occurred in the 1980s, 1990s, and 2000s. The commuting zones whose manufacturing industries had been hollowed out by the China trade shock after 2000 by and large lacked a footprint in the most innovative sectors, making them unlikely job magnets. We suspect, however, that trade-exposed places offer a “brownfield” opportunity, in which rents were low, commercial properties were readily available, and where a growing retiree population—supported by earned Social Security retirement and Medicare benefits—had substantial need for care and hospitality services.  

Our first finding is that as older manufacturing workers aged into retirement, new workers were not hired to replace them. That is, local labor markets exposed to the China trade shock did not register a subsequent manufacturing rebound. Instead, these labor markets experienced a continuous manufacturing decline through at least 2019, the end point of our sample.

A sharp decline in young workers entering manufacturing is the primary numerical contributor to the long-term decline in manufacturing employment, responsible for 56 percent of the contraction from 2000 through 2019. Among adult workers, the decline is due to reduced inflows into manufacturing employment of young, White and Black, non-college-educated men and women.

Economic theory also anticipates that workers exposed to adverse local labor market conditions would relocate to other labor markets to seek employment. For trade-exposed manufacturing workers in the first two decades of the 21st century, however, this is not what the data show. Rather than relocating to less trade-exposed labor markets, these workers became more likely to stay in their original locations. Some manufacturing workers did move, of course, to other labor markets in both exposed and nonexposed labor markets. But the geographic mobility of manufacturing workers in trade-exposed local labor markets fell, relative to comparable workers residing in nonexposed markets after the onset of the China trade shock.

Manufacturing workers’ geographic mobility in response to the trade shock also differed substantially by race and gender. In particular, the entirety of the increase in staying in trade-exposed labor markets was due to the reduced mobility of White male workers, who were and remain today the largest demographic group in the manufacturing sector.

What might explain this immobility? There are several plausible explanations. Place-based conceptions of personal identity are one explanation.¹¹ Financial constraints or kinship ties that may deter workers from leaving are another.¹² Tax-and-transfer payments, or income supports, provided to manufacturing workers, in combination with shock-induced lower costs of living may have incentivized workers to remain.¹³ The concurrent trade shock exposure of similar labor markets may also have reduced the attractiveness of moving.¹⁴

Unsurprisingly, workers from other locations also became increasingly less likely to migrate into manufacturing in trade-exposed labor markets. Thus, cross-market worker migration did reduce employment in trade-exposed locations. But it did so by deterring worker inflows by even more than it deterred outflows. The movement of manufacturing workers out of the labor force contributes modestly (by about one-third) to the numerical decline of manufacturing employment. Yet this impact dissipates by 2019 so that it is not much greater over the long run in trade-exposed versus nonexposed labor markets.

Earnings also were adversely impacted. Through 2019, earnings of trade-exposed manufacturing workers remained depressed relative to comparable workers in nonexposed locations. These outcomes, however, differed substantially according to workers’ initial earnings levels. Manufacturing workers initially in the bottom third of the U.S. wage distribution experienced a sharp reduction in employment. Workers initially in the middle third of the earnings distribution also experienced a reduction in employment, as well as an increase in their likelihood of falling into the bottom third of earnings. Workers initially in the highest third of earnings sustained a slight decline in employment, but by 2019, they essentially regained their ground relative to comparable workers in nonexposed locations.

Finally, while economic theory anticipates that trade-exposed manufacturing workers would transition to nonmanufacturing jobs, relatively few do so. This does not mean jobs aren’t reallocated within firms across sectors. Recent research documents that 40 percent of trade-induced job reallocation from manufacturing to nonmanufacturing stems from shifts within firms across locations.¹⁵

Our findings indicate, however, that manufacturing workers are not reallocated in tandem with these jobs. Though trade-exposed manufacturing firms may increase nonmanufacturing employment in less-exposed locations, these expansions do not, for the most part, directly re-employ workers displaced by the trade shock.¹⁶

This is ultimately not altogether surprising. Much of the job losses at these firms occurred in low-wage, less-educated areas in the South, where production work was concentrated. Much of the reallocation into nonmanufacturing by these same firms occurred in high-wage, high-education areas where design, management, and marketing were concentrated.

Local labor market adjustments are generational

Although the employment and earnings prospects of workers who were initially employed in 2000 in trade-exposed labor markets declined, the labor markets in which they are located began to reconstitute in the first decade after the initial onset of the China trade shock. More specifically, increases in nonmanufacturing employment fully offset the numerical decline in manufacturing employment by 2013. From that year forward, employment grew more rapidly in trade-exposed labor markets, compared to nonexposed ones. Despite this rebound in the number of jobs, however, the employment-to-population ratio remained depressed in these locations as population growth outpaced employment growth. (See Figure 2.)

Figure 2

The employment growth seen in Figure 2 after 2010 stems from two tributaries. Between 2001 and 2019, trade-shocked labor markets received steadily increasing inflows of workers who were already of working age (18 and over) in the year 2000 but not employed in the United States. As it turns out, these workers were largely immigrant adults who disproportionately found their first U.S. jobs in trade-exposed labor markets.

The second tributary of new workers—and the most significant driver of long-term growth in nonmanufacturing employment—was the entry in trade-exposed labor markets of young adults who reached working age approximately a decade after the initial shock in 2000. Many of these new entrants were U.S.-born Hispanics, but approximately one-quarter are immigrants.¹⁷

By contrast, the entry of U.S.-born White workers into trade-exposed labor markets fell sharply after the onset of the China trade shock, both in manufacturing and nonmanufacturing industries. The net increase in employment of young labor market entrants thus reflects a dramatic rise in inflows of U.S.-born Hispanics and immigrants, primarily non-Hispanic immigrants, offset in part by declining inflows of U.S.-born White workers. Also noteworthy is that women and college graduates were substantially overrepresented among these new entrants.¹⁸

Although the employment levels of U.S.-born White workers in trade-shocked areas remained largely unchanged between 2000 and 2019, their share of employment in these locations dropped while their average age rose (due to a decline in both the entry and exit of workers in this demographic group). Simultaneously, inflows of younger U.S.-born Hispanics and immigrant workers rapidly reshaped the demographic composition of local workforces.

Job quality in trade-shocked places declines

While manufacturing employment in trade-exposed local labor markets declined continuously after 2000, growing nonmanufacturing employment more than offset these losses from 2010 forward. The retail, health care, and education sectors experienced the largest employment growth, particularly in retail grocery, physician’s offices, Kindergarten-through-12th grade education, and restaurants. (See Figure 3.)

Figure 3

Figure 3 also highlights that as trade shocks remade the industrial composition of trade-exposed labor markets, the gender composition of employment shifted markedly. Despite the overrepresentation of men in manufacturing, trade-induced losses in manufacturing were equally sizable among men and women.¹⁹ But the growth in nonmanufacturing employment had a distinct gender skew: Women’s employment in nonmanufacturing rose by 1.54 percentage points per standard deviation of shock exposure between 2000 and 2019, while men’s employment rose by just 0.57 percentage points. Thus, more than three-quarters of net employment growth in trade-exposed labor markets reflected an increased employment of women.

In the three largest growth subsectors—retail, health, and food and restaurants—women’s employment increased by more than twice that of men. One proximate explanation for this pattern is that the sectors leading the employment recovery were all disproportionately female, though of course men entered these sectors as well. The rise in female employment was disproportionately driven by the entry of adult female immigrants. (See Figure 4.)

Figure 4

Since post-shock employment increases were disproportionately concentrated in traditionally low-paid service-sector industries, it is no surprise that the wage structure in trade-exposed labor markets shifted toward lower pay. As shown in Figure 4, almost all trade-induced job losses in manufacturing are accounted for by a loss of middle and upper-third jobs. Conversely, almost all employment gains in nonmanufacturing are accounted for by bottom-third and (secondarily) middle-third jobs. As such, approximately two-thirds of overall employment growth in trade-exposed labor markets between 2000 and 2019 is accounted for by rising employment in the bottom third of the earnings distribution.

In summary, the post-shock labor force in trade-exposed local labor markets as of 2019 consisted of two distinct groups: a new generation of workers who found employment in low-paid jobs concentrated in the service sector and a cohort of long-term incumbent manufacturing workers whose employment and earnings did not rebound from the manufacturing trade shock that began at least a decade earlier. Despite the eventual rebound in overall employment, the employment-to-population ratio remained depressed, low-pay jobs replaced high-pay jobs, and there remained groups of long-term economic losers in trade-exposed places.

Trade shocks, tariffs, and the U.S. political landscape

By reshaping employment and opportunity, perceptions of the China trade shock may also recast political preferences, including support for right-wing populist candidates and parties. As seen above, White non-college-educated males, a core constituency of President Donald J. Trump, experienced particularly adverse employment outcomes post-shock. For incumbent manufacturing workers in trade-shocked areas, declining economic prospects were closely followed by the arrival of immigrants and broader demographic shifts. (See Figure 5.)

Figure 5

The relative decline in the prevalence of U.S.-born, White, noncollege male workers in trade-exposed labor markets is shown vividly in Figure 5. While the share of U.S.-born White workers in trade-exposed labor markets remained relatively stable in the two decades following the China trade shock, the prevalence of noncollege U.S.-born White men fell steeply—by 8 percentage points for workers ages 40 to 64 and by 5 percentage points for workers ages 18 to 39. White noncollege men thus increasingly found themselves working in more diverse labor markets alongside colleagues of different racial, ethnic, and national backgrounds.

Against this backdrop, it is natural that the Fox News Network, with its appeal to conservative voters, generally aligned against freer immigration and in favor of strengthening U.S. manufacturing and gained media share in trade-exposed markets as ideological affiliations and voting patterns of White voters shift to the right.²⁰ The China trade shock’s polarizing ideological impact is directly manifest in the increased electoral success of Republicans at the expense of moderate Democrats in trade-exposed voting districts over the first two decades of the 21st century.

Investigations into the political effects of surges of Chinese import competition in Europe yield corresponding patterns. In Germany, France, Italy, and other Western European nations, local exposure to Chinese import competition induced electoral shifts to the right.²¹ These studies highlight the relevance of economic experiences, such as trade shocks, in shaping political outcomes.

Under the first Trump administration’s trade war in 2018–2019, its promised manufacturing employment growth from tariffs failed to materialize while consumer prices rose.²² Even though 37 percent of Republican voters agreed with the proposition that the United States is hurt more than China by tariffs, 80 percent remained in favor of tariffs in a 2019 poll.²³ Voters in communities protected by new U.S. import tariffs also became less likely to identify as Democrats and were more likely to support President Trump in the 2020 presidential election.²⁴

In response to the increasing political resonance of trade, Republicans became more likely to interact with trade issues via China-critical communications strategies.²⁵ Trade and trade policies have remained salient political issues through the start of the second Trump administration. Surging imports of critical value-added goods from China—such as electric vehicles, solar panels, and semiconductor chips—present a not insignificant risk of a second China trade shock. The political and economic consequences will depend not only on the actions of foreign exporters, but also on how the United States responds.

Conclusion

The persistent earnings losses and employment displacement triggered by the China trade shock did not just alter local labor markets—they also reshaped political behavior, as declining job prospects, demographic shifts, and foregone mobility fueled a concentrated and understandably bitter electoral response. While net employment in trade-exposed places eventually rebounded by 2019, incumbent manufacturing workers’ economic prospects did not. Trade-shocked places adapted through generational adjustments made possible by immigrants and young workers entering the labor force.

An at-first-blush appealing response to these findings, and the continuing impact of the China trade shock over the past 4 years, is that governments should invest in place-based policies that assist displaced workers to adapt by investing in their communities. As our results imply, however, place-based trade-adjustment policies carry complex targeting effects—offering stability for incumbent workers who are less likely to relocate while simultaneously shaping opportunities for new local labor market entrants.

To the extent that workers’ experiences of the economic adjustment process contribute to political polarization, place-based policies that mitigate local trade-shock-induced distress may plausibly temper its scope and trajectory.²⁶ Even as the economic consequences of the China trade shock constrained the geographic mobility of incumbent workers—narrowing the physical and economic boundaries of their lives—the political reverberations of this same shock extend nationally, as concentrated disaffection becomes increasingly consequential in a polarized and closely contested electoral landscape.

About the authors

David Autor is the Daniel and Gail Rubenfeld Professor of Economics at the Massachusetts Institute of Technology. He is co-director of the National Bureau of Economic Research’s Labor Studies Program and co-leader of both the MIT Work of the Future Task Force and the MIT J-PAL Work of the Future experimental initiative.

David Dorn is a professor of globalization and labor markets at the University of Zurich and affiliated professor at the UBS Center of Economics in Society. He was previously a tenured associate professor at the Center for Monetary and Financial Studies in Madrid, a visiting professor at Harvard University, and a visiting scholar at Boston University, the Massachusetts Institute of Technology, and the University of Chicago.

Gordon H. Hanson is the Peter Wertheim Professor of Urban Policy at the Harvard Kennedy School. He is a research associate at the National Bureau of Economic Research, a member of the Council on Foreign Relations and co-editor of the Journal of Economic Perspectives. *

*The authors note that the U.S. Census Bureau has ensured appropriate access and use of confidential data and has reviewed these results for disclosure avoidance protection (Project 7511151: CBDRB-FY24-CES014-008, CBDRB-FY24-0253, CBDRB-FY24-0328, CBDRB- FY24-0391, CBDRB-FY24-0433, CBDRB-FY25-0060). They also note that the main findings presented in this essay were originally reported in “Places versus People: The Ins and Outs of Labor Market Adjustment to Globalization” by David Autor, David Dorn, Gordon H. Hanson, Maggie R. Jones, and Bradley Setzler (2025).²⁷

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Overview

Donald Trump’s victory in the 2024 U.S. presidential election set off an animated debate among Democrats over what went wrong with their policymaking, messaging, and campaigning. Specifically, Democrats puzzled over why the working class abandoned the historical party of workers in ever-larger numbers, seemingly in favor of President Trump’s populist message.

Much of this debate has centered on the electoral failings of “Bidenomics,” the economic policy approach pursued by the Biden-Harris administration. Some pundits argue that Bidenomics did not sufficiently re-balance the U.S. economy to address the hardships of the working class, while others criticize it for stimulating higher inflation through increased spending, thereby hurting the very working-class voters that the president desperately sought to win over.⁷³

Looking for a path forward, the need to settle on an economic agenda for governing after President Trump’s second term in office is surely an important endeavor. But as a formula for countering the appeal of right-wing populism, it misses much of the point.

Importantly, the rise of populism and its electoral successes are not confined to the United States or a few of its recent elections. In fact, over the past two decades, a slew of other advanced democracies around the world also witnessed a resurgence of populism, a political movement defined by its opposition to elites and its claim to represent the “true people.”

From the Brexit vote in the United Kingdom and the surge of the National Rally in France, to Italian President Georgia Meloni of the Brothers of Italy’s takeover and the rise of the AfD in Germany, right-wing populism has emerged as a powerful force, disrupting political norms and reshaping electoral landscapes. To effectively counter President Trump’s widespread appeal in the United States thus requires a better understanding of the underlying causes of this (predominantly right-wing) populist wave around the globe. Yet despite its global character, the antecedents of modern right-wing populism remain a subject of deep disagreement.

A central point of contention is whether economic or cultural factors instigated the populist wave. Economic-centered arguments emphasize the role of globalization, automation, and global financial crises in generating widespread dislocation and economic insecurity, fueling a sense of resentment upon which populists have capitalized. In contrast, cultural explanations for the success of populism focus on societal changes. Higher rates of immigration and growing diversity, they argue, in addition to urbanization and a shift to more progressive values on cultural issues, have generated a backlash among those who perceive such developments as a threat to their identity and way of life. Seizing on this discontent, populist parties attracted growing numbers of voters.

The dichotomy of explanations is problematic because the two forces—economic and social-cultural—are intertwined. But understanding the relative importance of the different causes and correctly identifying the roots of popular disaffection is key because it carries weighty implications for the positions and policies that elected officials should pursue to effectively counter the appeal of right-wing populism both in the United States and abroad.

I contend that the role of economic insecurity in explaining populism is quite different from the one attributed to it in conventional wisdom. While economic factors are sometimes important in explaining electoral outcomes on the margin, they do not account for the broad support for right-wing populist issues, candidates, and parties. That support should instead be understood predominantly as a result of anxiety about cultural and demographic shifts and people’s sense that core aspects of their identity are under threat. These cultural dimensions are connected to economic transformations and policies, but voters’ attitudes and preferences cannot simply be attributed to their economic circumstances alone.

In thinking about the path to counter the appeal of right-wing populist candidates and parties, there’s a need to distinguish between two different questions. The first is what center-left parties should do to win in the next election. The second is how center-left policymakers can counter populism to durably regain the trust and votes of the working class and those without a college degree.

As I shall explain, these two questions may require different answers.  The first question will greatly depend on the failings of the second Trump administration and the short-term openings it will provide the opposition. In this short essay I will use evidence from other advanced democracies to address pertinent, long-term implications of the latter.

The economic argument and its limitations

Economic explanations for the rise of right-wing populism have dominated much of the scholarly and public discourse. These arguments often trace populism’s roots to dislocation and economic insecurity caused by globalization (primarily via trade policies and immigration), technological change, and financial crises.⁷⁴

For instance, the so-called China trade shock—a massive surge in imports following China’s accession to the World Trade Organization in 2001—hurt manufacturing industries in advanced economies around the world, leading to significant job losses and economic pain in some regions.⁷⁵ Studies have shown that these hard-hit regions showed higher levels of support for President Trump in his first presidential bid in 2016 and for populist candidates in Europe over the past two decades.⁷⁶

Yet the focus on such economic drivers conflates two distinct concepts that I term explanatory significance and outcome significance. Explanatory significance refers to the role of a given factor in accounting for the overall phenomenon, while outcome significance is the marginal impact of a given driver in bringing about an observed outcome.

The adverse effects of the China trade shock, for instance, are estimated to have led to a shift of about 4 percentage points in the UK’s Brexit referendum⁷⁷—just enough to secure the Leave camp’s narrow victory. In that sense, this shock had high outcome significance in that it determined the eventual election result. Yet it does little to explain why 52 percent of Britons decided to support Brexit. In that sense, those 4 percentage points have low explanatory significance for the phenomenon of interest (the support for Leave overall). This distinction is important to our understanding of the broader impact that economic insecurity plays in the populist vote.

Indeed, examination of the empirical evidence from other countries and elections indicates that the explanatory significance of economic factors, taken by themselves, is rather limited. The most in-depth empirical analyses of individual-level data consistently reveal that economic insecurity accounts for only a modest share of the populist vote. In a 2017 comprehensive study of 25 countries, for example, researchers found that an increase of one standard deviation in economic insecurity was associated with a 0.3 percentage point increase in the likelihood of voting for a populist party. Even when taking account of additional indirect influences of economic insecurity, this represents only about 7.4 percent of the overall share of the populist vote.⁷⁸ Other studies that assess the effect of trade-induced economic insecurity on regional voting in Europe have revealed similarly modest effects.⁷⁹

The limits of economic insecurity as an explanation for the populist surge also are evident when one examines the descriptive characteristics of the populist support base. Consider, for example, that if the data show that only 20 percent of the supporters of a populist party fit the definition of working class, then an explanation centered on “working-class economic anxiety” in that country can account for at most 20 percent of the party’s support.⁸⁰

This descriptive analysis is what my colleagues and I have done using detailed survey data from Europe.⁸¹ Figure 1 below compares the share of voters that match the profile of “economically insecure” in 10 European countries, which we defined using four alternative measures: people’s subjective reports of economic hardship; being unemployed or working in the manufacturing sector; having no college degree and a low income; or only having a low income.⁸² We then separately examine support of right-wing populist parties versus support of other political parties. (See Figure 1.)

Figure 1

As expected, Figure 1 shows that higher numbers of populist voters were economically insecure than among those who voted for other parties. This is the case regardless of which measure of insecurity one uses. Yet, crucially, the data also show that in absolute terms, the economically insecure represent, at best, a limited share of the populist support base, typically ranging between 15 percent to 35 percent across countries. Low-income voters without a college degree, for example, account for, on average, only a fifth of the populist support base. Taken together, these findings indicate that economic insecurity, while not trivial, is far from being a dominant factor driving the broad support of the populist right.

Some will argue that while economic insecurity itself may be a limited factor, fears over the economic repercussions of immigration—on the availability of jobs, say, or declining wages—are crucial to driving support for right-wing populism. This view, again, does not hold empirically. While immigration itself is largely driven by market forces, voters’ opposition to immigration is only weakly rooted in economic considerations. Instead, research consistently finds that apprehension about immigration is driven far more strongly by cultural factors and identitarian concerns⁸³—a topic which I turn to next.

The cultural roots of populism

Culture-centered explanations of populism’s global rise highlight the role of long-term societal changes in generating resentment among certain groups of voters. Based on a systematic review of the research literature, my colleagues and I identified five distinct “storylines” that capture the main cultural explanations put forth:⁸⁴

• Intergenerational backlash: Elderly people who feel that traditional values have been trampled and overtaken by a post-materialist culture and politics
• Ethnocultural estrangement: Native-born citizens who fear that demographic changes and incoming waves of migration are changing their country’s cultural identity
• Rural resentment: Residents who feel excluded and looked down upon by urban elites and by policymakers who represent the interests and lifestyles of those living in big cities
• Social status anxiety: Primarily White men anxious about a decline in the privileged social status that their race, gender, or occupational standing have traditionally afforded them
• Community disintegration: People who feel isolated and alienated by the absence of a cohesive local community to which they can belong or rely upon

After disentangling these different accounts and laying out the social developments that underlie each of them, we assessed their usefulness across several Western democracies in accounting for support for populist parties or politicians, compared to other political parties. Figure 2 below shows that there is notable variation across the countries we studied in the patterns associated with each of these five explanations, but two drivers emerge consistently as both highly prevalent and unique among the populist base: ethnocultural estrangement and rural resentment.

Specifically, the data show that voters who match the profile associated with ethnocultural estrangement—empirically measured as native-born citizens who feel that their culture is being eroded by immigration—are particularly receptive to populist rhetoric. Additionally, resentment among rural voters is the second factor that appears to contribute most to electoral support for populist parties. This resentment stems from the growing divide between urban and rural communities, not only in terms of material resources but also in cultural recognition. It reflects a sentiment among rural residents that their interests are ignored by the decision-making elites, and that their sensibilities are looked down upon by city dwellers. (See Figure 2.)

Figure 2

As Figure 2 shows, in France, Poland, the Netherlands, and Germany, between 30 percent and 40 percent of populist voters match the descriptions for ethnocultural estrangement and rural resentment, compared to between 10 percent and 25 percent of voters for nonpopulists. The difference is even starker in Switzerland and Sweden.

As the United States was not part of the surveys we used to analyze European populist support, we used different data to assess the strength of the five cultural explanations, and hence the results are not entirely comparable to those from Europe. Nonetheless, the same two explanations—ethnocultural estrangement and rural resentment—were, again, the best indicators for distinguishing between people who voted for President Trump in 2016 and those who did not.

Interestingly, in the U.S. case, we also find evidence consistent with the intergenerational backlash theory, in which older voters turn to populism to defend the core values that have long informed their worldview and that they feel are being overwhelmed or eroded by modern-day culture and politics.⁸⁵ We find that older people with more traditionalist values were indeed substantially more likely than other age groups to vote for President Trump.

Countering populism by addressing its cultural roots

“Liberty, equality, fraternity” is the often-used motto of the social democratic ideal. The progressive agenda has, in recent years, been defined by its preoccupation with the first two values—liberty and equality—through the prism of social justice. A focus on the third value—fraternity, or solidarity, as it is now more commonly referred to—provides an overarching goal that can tie together an effective and enduring progressive platform for countering populism’s growing appeal.

No doubt, designing policies that address cultural anxieties is a woolier challenge than addressing economic insecurity. Nonetheless, aiming for this objective is crucial. Considering the strong relationship between support for right-wing populism and sentiments associated with ethnocultural estrangement and rural resentment, the policies I discuss below primarily center on these two drivers. This is not an exhaustive list of proposals, however, as other policies could work in tandem with these to confront the different cultural factors discussed above.

Alleviating anxiety about immigration

A pertinent finding in my research is that people make a clear distinction not only between authorized and unauthorized immigration, but also between the authorized immigrants already residing in a country (the “stock”) and those expected to arrive in the future (the “flow”). Specifically, the data show that Americans tend to be more accepting of the stock but exhibit far less support for the future inflow of migrants.⁸⁶

To gain credibility in controlling immigration therefore does not mean adopting a sweeping agenda that is hostile to all immigration. Standing for a stricter approach toward the flow of immigrants—by supporting stronger border control, for instance—even while opposing harsh treatment of immigrants already residing within the country—by, for example, defending the Deferred Action for Childhood Arrivals program, which protects young undocumented people who were brought to the United States as children, known as “Dreamers,” from deportation—could make progress in reducing the political potency of immigration.

Research points to several other potential interventions that also may help to do so. Evidence from the United States, for example, shows that a large door-to-door canvassing campaign that consisted of “the nonjudgmental exchange of narratives” was highly effective in reducing exclusionary attitudes toward unauthorized immigrants—and did so in a lasting manner.⁸⁷ There also is some evidence that inducing native-born citizens to have personal contact with immigrants can reduce hostility toward them.⁸⁸

The limitation of these approaches is that they are labor-intensive and relatively costly, and the body of evidence supporting them is still small. But, potentially, programs such as national service opportunities or workplace organizing initiatives provide apt settings for such interactions, so further consideration of this approach is warranted. Indeed, a study in Norway shows that military service is effective—via shared rooming with ethnic minorities—at increasing trust in immigrants.⁸⁹

Information campaigns, in which citizens are given relevant information and facts about immigration—such as their actual numbers or contribution to the local economy—are easier to scale-up nationally and are cheaper to carry out. Examples of this approach include the Canadian government’s “#ImmigrationMatters” campaign. Launched in 2018, it used social media, television, and print media advertisements to promote content designed to dispel common myths about immigration and promote positive engagement between native citizens and new migrants. Germany, Australia, and Sweden also have advanced such campaigns.

To date, however, evidence indicates that the impact of information campaigns is dependent on context. In some cases the effect of providing information on the attitudes of native citizens was substantial, while in other instances, it had little impact.⁹⁰ Yet given the outsized role that immigration-related concerns play in the appeal of right-wing populism, an all-of-the-above approach should be a priority for center-left policymakers.

Revitalizing rural communities

Addressing rural resentment no doubt requires targeted investments in exurban areas to create high-quality jobs and enhance access to government services. Crucially, however, research indicates that economic revitalization of these areas is not enough.

Indeed, the closure of village halls, libraries, post offices, and parks has hollowed out many rural communities, removing key hubs where people once gathered in their communities. Evidence from the United Kingdom links this social fragmentation to rising political discontent, showing, for example, that communities that lost local pubs exhibited higher support for populist candidates.⁹¹

To revive rural life thus requires investment in the conditions that strengthen communities and their social cohesiveness. Several policy measures can help, including:

• Supporting community-owned businesses and cooperatives: Case studies from the UK and the European Union show that such community-run enterprises provide important services, help save local enterprises, and foster greater social cohesion, trust, and civic engagement.⁹²
• Investing in digital connectivity: Improving broadband access in rural areas enables residents to maintain social relationships and engage with the broader society, partly mitigating a sense of isolation.⁹³
• Provide funding and assistance for revitalization of downtown areas: A recent study of U.S. rural communities found that revitalizing Main Streets not only spurred local economic recovery but also created more “vibrant, reflective, and cohesive” social environments.⁹⁴ Evidence also indicates that investments in streetscape improvements, small business support, and inclusive events, such as farmers’ markets and cultural celebrations, draw people to downtown areas and help achieve these goals.
• Investing in so-called third places: Investing in these physical spaces that naturally encourage interaction—hence their name “third places,” as in neither home nor work—means providing funding for building or sustaining community centers, cultural or religious centers, and parks. The goal is to improve opportunities for socializing that underpin societal cohesion.

Investment in rural communities should therefore be an important focus of center-left policymakers. Strengthening these communities will require investment in expanding local economic activity and, crucially, also in creating conditions that facilitate social interactions and strengthen rural civic life. Beyond the economic and social dividends of this approach, it could also help assuage resentments that drive many rural voters to right-wing populism.

Other policy options to counter right-wing populism

The cross-country analysis I and my colleagues performed also confirms the role of anxieties about declines in social status as a driver of populist support in some countries. These anxieties may be partly attributed to concerns about changing demography and the erosion of traditional social roles, but they also could be due to labor market changes and rising employment precarity. 

The anxieties about social standing might be addressed through a combination of a targeted industrial policies and active labor market programs designed to create “good jobs” for lower- and middle-class workers.⁹⁵ Greater emphasis also should be placed on policies that promote a sense of dignity in the workplace. And strengthening workers’ voice through union representation and collective bargaining may help make workers feel that their concerns are heard and addressed by employers and policymakers alike.

Beyond these options, center-left policymakers and politicians should not forget that sentiment does not equate policy. Allaying people’s anxiety about, say, immigration, does not begin and end with putting forth tough and detailed policies regarding entry quotas, visa eligibility criteria, or numbers of border patrol agents.

Speaking to people’s anxieties also requires acknowledging their gravity and selecting candidates that can genuinely express concern—and even anger—about the factors underlying these anxieties and convey a commitment to address them. After all, it is hardly the case that right-wing populist parties have effective solutions to the core problems modern societies currently face; their appeal is much about the sentiment they convey when talking about the problems. Combating populism therefore requires using some of its own effective communication methods.

Conclusion

While grievances stemming from economic dislocation and insecurity contribute to populist support and can be a decisive to the outcome of specific elections, they do not explain why it has garnered such broad appeal across diverse contexts. My research and others suggest that the appeal of right-wing populism is, to a large degree, rooted in culture and identity-based grievances. How center-left policymakers should address these grievances is a question without easy answers, but they should not over-emphasize economic factors simply because it is easier to conceive of a policy remedy for them.

The rise of right-wing populism in the United States and other advanced democracies reflects a profound political shift. To counter this movement effectively, center-left parties must recognize people’s anxieties about issues of identity, social belonging, and cultural change, and focus on policies and messages that speak to these issues in addition to addressing their concerns about rising economic insecurity.

The list of policy solutions provided above is neither exhaustive nor sufficient in itself to counter right-wing populism, but it does sketch out a number of important directions to consider. By crafting an agenda based on solidarity that speaks to voters’ concerns about identity and purpose, in terms of both the policy and the sentiment it conveys, the center-left can chart a more effective path toward countering populism and regaining the trust of the electorate in elections to come.

About the author

Yotam Margalit is the Brian Mulroney Chair in Government at the School of Political Science and International Affairs at Tel Aviv University and a professor in the Department of Political Economy at King’s College London. He has written extensively on the politics of globalization, the rise of populism, and the political repercussions of economic crises.

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Overview

In wealthy nations around the world, the rise of the knowledge economy has increased political and economic divides that fuel right-wing populism. These divides generally have a strong geographic dimension, and the United States is no exception. Dense metro locales—advantaged in the knowledge economy—have shifted toward the Democratic Party. More sparsely populated nonmetro places—disadvantaged by this profound economic transformation—have shifted toward the Republican Party.

This growing geospatial divide mirrors and motivates many others, cleaving voters across lines of education, occupation, race, ethnicity, religion, age, and immigration status. It divides those who welcome a global knowledge economy and increased social diversity from those who feel threatened by them. In turn, this divide fuels the two political parties’ increasingly distinct appeals, strategies, and orientations toward democracy.

Many of these trends mirror shifts taking place in other affluent democracies. Yet the United States is distinctive in three fundamental respects. First, the U.S. system of representation is both highly territorial and biased in favor of nonmetro places, most starkly in the U.S. Senate. Second, the United States has an extremely rigid two-party system—an unusual feature that has enabled the remarkable right-wing takeover of the Republican Party. Finally, the large role of money in U.S. politics creates a powerful pull toward the interests of economic elites that has affected the two parties differently. These three factors have greatly intensified educational and geospatial polarization and encouraged culturally grounded conflict.

In particular, America’s version of right-wing populism is far more “plutocratic” than its counterparts abroad.⁹⁶ Viewed alongside right-wing populist parties in other rich democracies, the Republican Party’s revanchist racial and cultural appeals and “anti-system” attacks on government are familiar. Its aggressively inegalitarian and deregulatory policy stances are not. These economic stances are to the right not just of typical right-wing populist parties, but also of typical Republican voters. The result is an even greater incentive for the party to foster affective “us-versus-them” divisions over race and culture—even as it cloaks its economic policies in similar terms, such as attacks on foreign countries, lazy government workers, and an undeserving racialized poor.⁹⁷

We have called the Janus-faced effects of the knowledge economy the “density paradox.”⁹⁸ The paradox is that while density enhances economic productivity in America’s transformed political economy, it is bad for electoral representation in the nation’s territorially based electoral system. To win durable governing power, Democrats need to gain and retain the allegiance of voters outside of metropolitan America, including in places unsettled by the transition from industrial to knowledge production.

Former President Joe Biden and congressional Democrats entered office in January 2021 seeking to tackle both sides of the density paradox. Strategic investments would boost prosperity in deindustrialized and nonmetro America; enhanced labor power would ensure this prosperity reached workers without a college degree. The idea was that workers who felt that they and their communities were more economically secure would be less vulnerable to right-wing populist appeals, and organized labor would help create alternative identities for populations who might otherwise find these appeals convincing. This was the promise of Biden’s “deliverism”—desirable policy would lead to Democratic power-building.

During the Biden administration, major new investments were launched through the Bipartisan Infrastructure Act, CHIPS and Science Act, and Inflation Reduction Act. Many of them flowed to nonmetro America. Between 2021 and late 2024, red counties received more than 73 percent of announced private strategic-sector investments—more than twice their share of economic output.⁹⁹ These policies, alongside a vigorous fiscal response to the COVID-19 pandemic, fueled a faster recovery in the United States than seen in other rich countries—and lower-wage workers and slower-growth regions benefited. Coming out of the pandemic, the most distressed U.S. counties experienced increased job growth, particularly in strategic sectors.

Yet the hopes for “deliverism” were dashed in the 2024 general election. Democrats did not gain ground in nonmetro America, nor among White working-class voters, and a right-wing populist party seized power. What happened, and what lessons should be taken for the future?

In this essay, we first describe the shifting coalitional bases of America’s two major parties and how they are related to political-economic geography. Then, we consider how this has fed into the transformation of the Republican Party and the rise of plutocratic populism. Finally, we examine the economic and political effects of Democrats’ response during the Biden administration, focusing on their implications for future political and policy strategies to reduce regional inequalities and blunt the effectiveness of right-wing populism.

The density divide and U.S. right-wing populism

The Democratic and Republican parties look very different than they did even a decade ago. In two key respects, however, they have changed in parallel. First, both parties have become cross-class coalitions based on shared geography, as well as shared identities. Second, this geographic clustering has produced powerful feedback loops that have exacerbated us-versus-them polarization. These feedback effects, however, have had the most profound impact on the Republican Party.

Figure 1 tells the story of intensifying place-based divergence. It shows the average density (top panel) and median income (bottom panel) of congressional districts won by Democrats and Republicans.¹⁰⁰ As the figure shows, Democratic congressional districts have become denser and higher-income, while the reverse is true for Republicans. (See Figure 1.)

Figure 1

While these results go only through 2022, the 2024 election did not change the trends. Democrats did lose ground in metro districts at the presidential level, yet 2024 saw continuing divergence in the characteristics of districts won by each party. And notwithstanding the fall-off in the Democratic presidential vote share in metro areas in 2024 (mostly driven by reduced turnout), nonmetro areas continued to shift away from the party. 

The places where Democrats dominate elections are generally both denser and more prosperous than the rest of the United States. They are also highly unequal. The Democrats’ multiracial coalition therefore includes both sides of the widening U.S. economic divide. So, too, does the Republican coalition, which represents many of the poorest regions of the country but has its own affluent voters, as well as a significant subset of the superrich who make outsized investments in the party.

Place-based party divisions, in turn, drive powerful feedback loops. Given winner-take-all elections, a polarized partisan map magnifies the effect of relatively small party edges and encourages both parties to accentuate appeals that map onto the economic and cultural divisions that cleave these places from each other.¹⁰¹ The decline of competitive seats makes intra-party primary challenges more important, reinforcing this polarization.

Finally, social media and legacy media intensify this division by creating within-party echo chambers based on national party divisions, rather than local issues. Gone are the days when particular states, House districts, or even state legislative districts featured ticket-splitting or fostered their own regional party brand. Geographically, it is polarization all the way down.

Asymmetric polarization

For at least four reasons, these forces have had more disruptive effects on the right than the left. First, the Republican Party is advantaged by the territorially based electoral and governing institutions in the United States, which reward parties not just for winning majorities but for winning majorities in particular places. As a result, Republicans have had a built-in edge in the U.S. Senate and, to a lesser extent, the Electoral College and the U.S. House of Representatives. Notably, Republicans have not represented states containing a majority of the nation’s population since the 1990s, while frequently garnering a majority of U.S. Senate seats.

Moreover, the bias is growing as the split-ticket voting that kept Democrats competitive in less populous states has disappeared. Meanwhile, the concentration of Democratic voters in metro areas hinders the translation of votes into seats in both the U.S. House and in statehouse elections—a disadvantage reinforced by aggressive Republican gerrymandering. An important consequence is that Republicans have greater electoral running room to take more extreme stances.

Second, the Republican Party’s voting base is more homogenous. Even with the shift of younger voters and working-class Latinos and Black men toward the party, Republican voters are disproportionately White, working class (with less than a college degree), conservative Christian, and in their mid-40s or older. Democratic voters, by contrast, are more demographically and ideologically diverse.

Third, compared with other parts of the media environment, right-wing media and social media are more influential, extreme, and insulated. Beyond the well-documented influence of Fox News, the online media environment—YouTube, Rumble, Twitch, Kick, Spotify, Facebook, Instagram, and TikTok—is dominated by right-leaning shows, which create powerful feedback loops influencing not only voters but also candidates and elected officials.¹⁰²

Finally, the intense organized groups associated with the Republican Party—the religious right, gun rights activists, backlash-oriented advocacy groups, and deep-pocketed donors aligned with them—have invested more and more effectively in policing Republican moderation, including through primary challenges.

The result is a vicious cycle of growing extremism that now threatens U.S. democracy itself. Hailing from safe districts and states, where primary challenges are the greatest threat, Republican officials in the U.S. Congress have little incentive to challenge executive overreach and defend the authority of the legislature. Meanwhile, leaders of solidly red states add to this threat by undermining voting rights, aggressively gerrymandering to reduce electoral accountability, and pursuing partisan policies that reflect national party priorities rather than their states’ distinctive economic interests and citizen preferences.

The rural health crisis in red states is what happens when party priorities outweigh popular preferences. As public health professor Michael Shepherd and his colleagues argue, the Republican party has been able to pursue policies unpopular among—and indeed harmful to—its own constituents because it has effectively blamed Democrats and the federal government and because it has successfully elevated culture-war issues.¹⁰³ As Republicans in Congress hurtle toward major Medicaid cutbacks to finance tax cuts mostly favorable to the affluent, the party’s combination of plutocratic policy priorities and right-wing populist rhetoric remain on full display.

Plutocratic populism 1.0 and 2.0

We describe this dangerous amalgam as “plutocratic populism.”¹⁰⁴ Put crudely, Republicans have mobilized voters outside of metro areas with appeals animated by religious, racial, and anti-immigrant backlash—the rhetorical fare of right-wing populism worldwide—while the policies they have pursued in office have been strikingly oriented toward deregulation, cuts in social programs that benefit the less affluent, and tax cuts for corporations and the wealthy. This distinguishes the peculiar American right-wing hybrid from most of its European counterparts.

Crucially, plutocratic populism also magnifies the party’s incentives to engage in anti-system behavior. Despite escalating extremism, billionaire-financed organizations have lavishly funded and backed U.S. right-wing populism. This direct source of radicalization, in turn, fosters an indirect one: The plutocratic policies that these investments encourage have so little support among Republican voters that party elites must further stoke populist backlash to animate the base.

The distinctive brand of U.S. right-wing populism has gone through two phases separated by President Donald Trump’s loss in the 2020 presidential election. Plutocratic populism 1.0 was more plutocratic than populist. Mobilizing against President Barack Obama after the 2008 election, the plutocratic elements of the party—the Federalist Society, the Koch brothers and their Americans for Prosperity advocacy group; the state-level “troika” of the AFP, American Legislative Exchange Council, and State Policy Network; and an increasingly partisan U.S. Chamber of Commerce—were in the driver’s seat when it came to Republican policymaking and power-building, and Democrats struggled to respond.

These organized forces attacked public-sector unions. They stacked courts with business-friendly judges. They went into overdrive with gerrymandering. And tax cuts and deregulation reigned supreme. The plutocrats paved the way for the rise of President Trump, whom most of these groups initially opposed. In 2016, President Trump ran against both the political left and the plutocratic right. In office, though, he outsourced policy to then-U.S. House Speaker Paul Ryan (R-WI) and staffed his White House with Americans for Prosperity alumni. His big legislative achievement were the 2017 tax cuts, which skewed toward corporations and the superrich. And he pushed through three U.S. Supreme Court appointments that yielded the most business-friendly majority since the court sought to thwart President Franklin D. Roosevelt’s New Deal.

In 2025, however, plutocratic populism 1.0 gave way to plutocratic populism 2.0. The Trumpist shift of the Republican Party, which accelerated after the insurrection at the Capitol in Washington on January 6, 2021, is driven by right-wing media, the party’s intense voting base, and a distinct subsection of the organizational right that sees cultural and racial backlash as the party’s superpower. President Trump has had years to identify loyalists, and these loyalists are seeking not just to dismantle disfavored parts of the administrative state but also to weaponize the whole system.

Some plutocrats, among them tech entrepreneurs Elon Musk (the richest person in the world) and David Sacks and their tech colleague and co-investor Peter Thiel, are strongly aligned with the Trumpist-dominated Republican Party. Far more of the plutocratic alignment with the Trump administration, however, stems from a combination of self-interested policy aims (deregulation and tax cuts) and acute fears of retribution by President Trump and his administration. Organized plutocrats once sought to dominate the party’s center of power; now, the party’s center of power seeks to dominate them. In this pay-to-play world, control has shifted toward the MAGA side of the Republican Party and to President Trump himself, with dangerous implications not just for Democrats but also for democracy.

If economic populism means policies to benefit those left behind, plutocratic populism 2.0 is no more economically populist than version 1.0. Indeed, in this respect, it is even less populist. Tariffs that disproportionately hurt those on modest incomes, cuts to spending on social programs, tax cuts for the wealthy, extensive deregulation, and an emerging system of favors and corruption for the well-positioned add up to a massively inegalitarian package of policies.

Yet this package is now coupled with an even more extreme set of anti-system strategies—including attacks on public-sector unions, elite educational institutions, and the expert-informed institutions that once guided public investments in health, science, and technology. Designed to quell dissent and mobilize supporters, these actions make it much harder for critics to break through, undermine normal mechanisms of electoral accountability, and create institutional opportunities for unpopular policy changes that few could have contemplated during President Trump’s first term in office.

Assessing President Biden’s record

This troubling transformation raises a fundamental question: Could plutocratic populism 2.0 have been stopped? A key goal of the Biden administration was to lessen growing place-based divisions and soften the appeal of right-wing populism. Why this strategy failed to produce quick or large electoral effects in 2024—and what this means for political and policy strategy now—is our final topic.

The first step in charting a path toward winning nonmetro working-class voters away from right-wing populism is a sober assessment of the Biden administration’s strategy for remaking policy to strengthen appeals to these voters. It is now common to say that the strategy of improving job opportunities, well-being, and opportunities for unionization—sometimes known as “deliverism”—failed.¹⁰⁵ The evidence, however, points to a more complex evaluation.

Electoral performance in the global context

The starting point for that evaluation is the recognition that in 2024, the incumbent Democratic administration faced a historically challenging global political environment. In Europe, governments of the left (Germany) and center (France) lost considerable ground. But so did parties of the right, with the British Conservatives posting their worst showing in their much longer history. Similarly, in Asia, the long-dominant center-right Liberal Democratic Party in Japan suffered its second-worst results ever. Post-COVID disaffection and, more specifically, a bout of pandemic-induced global inflation provoked electoral punishment for incumbent parties almost everywhere.¹⁰⁶

Gauged against that backdrop, the Democrats’ electoral performance in 2024 actually looks relatively good. Although Vice President Kamala Harris lost ground almost everywhere, compared with Joe Biden in 2020, she came close to victory in the presidential contest. She lost the popular vote by just 1.5 percentage points—one of the closest results in recent U.S. history. And while some might note, rightly, that President Trump himself was a weak candidate, Democrats actually gained a couple of seats in the U.S. House and narrowly lost the U.S. Senate, despite an unfavorable map (victims of the density divide). Breaking recent patterns, four Democrats—in Arizona, Michigan, Nevada, and Wisconsin—won or held Senate seats in states that President Trump carried.

Democrats—and their presidential standard-bearer in particular—clearly paid an electoral price for high inflation. The damage likely would have been much worse, however, if the United States had not managed, in considerable part through vigorous (and, until 2021, bipartisan) stimulus, to generate an economic recovery in growth, productivity, and employment that far outpaced those of other rich democracies.

An incomplete agenda and implementation

The 2024 election represented a particularly difficult test for the Biden administration’s theory of coalition expansion in another respect, too. The institutional gridlock the administration confronted blocked very significant parts of its “deliverism” ambitions. Its proposed Build Back Better legislation had to shrink drastically to pass through the evenly divided U.S. Senate. Moreover, the parts that passed were often the least visible, direct, and politically traceable, such as tax credits to businesses to create new good jobs, which workers likely credit to the private sector, not government. And conservative courts blocked important administrative initiatives on student loan forgiveness and other issues.

Perhaps most deserving of emphasis is the manner in which halting implementation of the Biden administration’s infrastructure investments exacerbated these challenges. Many highly touted and costly investments struggled to break ground. By early 2025, only four states had worked through the administrative process for expanding rural broadband access. Only a handful of the promised charging stations intended to increase the attractiveness of electric vehicles had actually been installed. Even something seemingly straightforward—the $35 cap on insulin prices for Medicare patients—did not go into effect until 2025. The same was true for the highly popular initiatives to negotiate Medicare prices on important drugs.

Thus, the electoral trial of 2024 was a test of an incomplete version of the Biden agenda, sluggishly implemented, and facing the voters under quite unfavorable circumstances that were largely outside the administration’s control. These are among the reasons why a positive feedback loop between policy initiatives, voter attitudes, and election results largely failed to emerge.

We can see the limits of feedback in the 2024 election results. Figure 2 below focuses on two electoral battleground states—Pennsylvania and Wisconsin—with strong industrial histories and where the effects of the Biden administration investments might have been expected to show up in the election results. The figure shows four clusters of places in these two states, based on their changing mix of industrial and knowledge economy activity.¹⁰⁷

Knowledge economy metro areas have shifted toward the Democratic Party, especially after 2010, while rural deindustrializing areas have shifted toward the Republican Party. On the periphery of metro America, suburban areas that are adjacent to metro knowledge hubs have moved toward Democrats, while those that have experienced deindustrialization without such knowledge economy ties have moved toward Republicans—in both cases less sharply than metro and rural areas, respectively.¹⁰⁸ (See Figure 2.)

Figure 2

What is clear from Figure 2 is that these trends did not change appreciably in 2024 in either state. The geographic divisions that exploded between the Obama and (first) Trump presidencies appear quite locked in today. Certainly, the Biden administration did not achieve a much higher vote share in 2024 than in 2020 in the nonmetro places marked by deindustrialization.

Newfound limits of policy feedback

While no doubt disappointing to Biden administration officials, the limited feedback effects of its initiatives are consistent with recent scholarship on political behavior. This research mostly finds much weaker positive behavioral effects of policy initiatives than seen in prior research. The most extensive studies have focused on the Affordable Care Act, and they generally show that initial impacts in the mid-2010s were negative. Only after an extended period did public attitudes turn positive—tellingly, in the wake of Republican efforts to repeal the program early in the first Trump administration.¹⁰⁹

At the heart of this discouraging record is disillusionment with government, especially among the White working class and in rural areas. Informational environments that mute or distort messages of new programs reinforce this distrust. The growth of partisanship as a political identity—combined with much more intense dislike of the party one does not identify with—has made it considerably more difficult to shake up voter attachments through policy action.¹¹⁰

In thinking about the difficult task of persuasion, it is worth emphasizing that disenchantment has been a long-term process, now reinforced by many social and cultural factors. It is unrealistic to think that policy change alone is going to produce a dramatic and rapid reversal. But there is reason to think that policy can help. More important, unlike many other things that will matter, policy is something over which decision-makers can exercise control.

Despite the grave risks facing our democracy, there is reason to believe that those seeking to contain right-wing populism may have an opportunity to exercise such control in the future. How they should approach this potential opportunity is our final topic.

Prospects for Democrats’ future progress

The cautious case for believing that results could be more favorable next time builds on three fundamental points. First, as has been common in recent U.S. history, considerable political momentum may emerge from backlash to the current administration and its policies. Second, while that administration and its policies have greatly undermined the public sector, backlash-driven campaigns for change are likely to emphasize the need to improve government capacities at the state and local levels, as well as the federal level. Finally, against this backdrop, lesson-drawing from the Biden record could increase the prospects that future initiatives targeting the economic well-being of working-class voters are visible, legible, effective, and popular.

Disillusionment with government and strengthening political attachment to the Republican Party among working-class voters undermined deliverism. Already, however, there are signs that the economic policies of the new Republican administration may be weakening those attachments, especially among the least committed Republican voters. Neither the Musk-led attacks on federal government agencies nor President Trump’s trade wars are popular. The prominence of an unpopular billionaire (Elon Musk) in the new administration undercuts the Trump administration’s populist bona fides.

Crucially, as noted, many of the administration’s policies are likely to be quite damaging to working-class and especially rural voters. This creates important opportunities to reach out to voters who have flocked to the banner of right-wing populism.

Disapproval of the president on the economy is already high and growing—a contrast with his first term in office, when the economy was often his most popular issue.¹¹¹ And this is before the negative impact on employment and prices of these policies kick in. It is also prior to the possible passage of the Republican budget reconciliation package of high-income tax cuts combined with sizable cuts in Medicaid and food assistance, which is also likely to be quite unpopular.

Indeed, when asked in a recent poll whether voters favored cutting Medicaid to pay for tax cuts, 70 percent of voters were opposed, compared to 20 percent in favor, with swing voters opposed 67 percent to 21 percent, and even Trump voters opposed 51percent to 36 percent.¹¹² Just as was true after 2004 and 2016, an unpopular Republican presidency may create considerable political opportunities.¹¹³

Lessons for future policymaking

The challenge in reaching those drawn to right-wing populism through economic policies is to put in place initiatives that generate material benefits and expanded opportunity and that are perceived to be doing so as close to implementation as possible. Democrats from 2021 to 2024 did moderately well on the first half of this equation, providing short-term stimulus and long-term investments that fueled job creation in many “left behind” areas. They fell short, however, on the second half.

As Equitable Growth’s Alexander Hertel-Fernandez and Shayna Strom discuss in their essay in this series,¹¹⁴ deliverism failed to incorporate many of the cautions and caveats coming from recent political science scholarship. These implications are not all negative—policy feedback can break through partisan polarization—but they point to critical necessary conditions. Three in particular stand out:

• Policies need to be visible and traceable. Decades-old scholarship about how voters assess policies still holds.¹¹⁵ If voters do not perceive that a policy has affected them and/or do not know to whom to give credit or blame for that policy, new initiatives are unlikely to generate the kind of positive feedback loop that policymakers are looking for.

• Policies should reinforce a sense of dignity and status tied to democratic citizenship, as well as provide benefits. Particularly in a political climate marked by disaffection, positive reactions to policies are in part a matter of symbolism. They involve not just material benefits but also moral recognition—a sense that recipients are seen and their efforts appreciated.

• Policies are more likely to succeed when they activate organized supporters. In challenging and often hostile information environments, voters need organized allies who have the resources and credibility to enhance visibility and traceability. Even where voters experience governance directly, they often rely on trusted sources to develop their interpretations of those policies.

Although it is outside our purview, we wish to acknowledge that the challenge of creating these favorable perceptions is in considerable part one of communications. Making new programs visible to voters—especially the most skeptical ones—in today’s information environment is extremely difficult. Policy news seldom reaches the disengaged, and many of the disaffected are in partisan informational spaces disinclined to provide favorable or accurate coverage.

Even less-partisan media sources have incentives to play up the negative or controversial in their reporting. Having effective, empathetic organized messengers can help. So can new efforts to penetrate informational spaces popular with the politically disengaged.

Improving state capacity

For those focusing on the tools of governance, the priority is policy initiatives that lend themselves to clear and straightforward narratives of benefit for U.S. families. Enacting and funding initiatives is not enough. These initiatives also must rapidly translate into actual changes in lived experience that can be persuasively attributed to government action.

Without wading too far into the debate about so-called abundance framings, the case that procedural obstacles are far too often a roadblock to expeditious and effective policy change is extremely strong.¹¹⁶ The costs of building all kinds of infrastructure, as well as housing in many states, is now far higher in the United States than in comparable countries. And turning programs into facts on the ground takes far longer than it once did.

More broadly, various limitations of government capacity have become a major obstacle to turning ambitious policy plans into reality. In too many cases, intended beneficiaries confront a bewildering, sometimes overwhelming, set of roadblocks. Deliverism cannot work if the end results are not, in fact, delivered.

One reason for political optimism about future policy opportunities is that momentum is building to both reduce obstacles to implementation and bolster capacity for robust government action. Recognition of these roadblocks has grown among policy analysts and decision-makers. Generational turnover among policymakers, advocates, and thought leaders has encouraged a critical reevaluation of the benefits and costs of procedural barriers. A future set of initiatives targeted at working-class voters must be packaged with reforms to ensure that laws are not only passed but also implemented, and implemented quickly.

Elements of a new agenda

Ideas for place-based reforms and policies to boost working-class economic security and power abound—including a number that were part of the original Build Back Better legislation but did not make it into the Inflation Reduction Act. We close, therefore, not by laying out a laundry list of possible policies but by emphasizing what we think the key themes of these efforts should be. We focus on initiatives designed to address geographic polarization, the decline of working-class support for the center left, and the widespread mistrust of government and sense of economic dislocation that contribute to this decline.

The first theme is tackling the concentration of market power. The nation’s affordability crisis rests in considerable part on growing consolidation in sectors as diverse as telecommunications, meat processing, and pharmacies. The concentration of market power has led to both economic and political challenges. It is highly implicated in the decline of rural America. As the sociologist Robert Manduca has shown, “The waves of corporate consolidation over the past four decades have deprived many cities and towns of the corporate headquarters and local businesses that used to be a source of high paying jobs and demand for professional business …. [and] a strong predictor of community and civic health.”¹¹⁷

Market power often leads directly to political power. Rent-seeking interests have become an important part of the plutocratic populist coalition. Cases in point include big oil companies, the cryptocurrency industry, and many sectors of the tech economy. Addressing market concentration thus can both lead to direct material improvements for aggrieved voters and help to rebalance political power.

Equally important are efforts to reduce prices and boost supply in key sectors through the removal of process-related obstacles. In some crucial regulated markets—especially housing, but also education, electricity, and health care—regulatory reforms could lead to lower prices. This kind of regulatory reform is popular, effective, frees up public funds for other purposes, and generates higher productivity in the service sectors that now account for the bulk of employment.

The case for addressing these market power and price challenges is strengthened by recent evidence suggesting that there may be greater popular support for “predistributive” programs, such as antitrust actions and support for labor unions, than for redistributive ones, such as trade adjustment assistance and anti-poverty spending.¹¹⁸ At a time when suspicion of redistributive programs has grown among working-class voters, programs that boost market incomes and make key consumption goods less costly may be more attractive options.

Conclusion

Policy reforms along these lines—pursuing, for example, visible measures to reduce costs for health care and education while spurring expanded and more affordable construction of housing and infrastructure to meet demand, increase productivity, and create jobs—would have two important impacts on the spatial inequalities that have helped generate support for right-wing populism. First, by helping to address the affordability crisis in high-productivity areas, such policies would increase mobility to the places with greatest economic opportunity while slowing the population drain of the non-college-educated from those areas.

Second, out-migration of labor from disadvantaged areas should increase demand for workers among those who remain in areas left behind.¹¹⁹ Other authors in this series of essays show that non-college-educated workers in these areas tend to stay put and experience low economic mobility or drop out of the job market altogether when economic shocks occur. Predistributive policies could help address these ills and slow the population drain from those areas.

Even with such policies, it will remain important to target resources directly to disadvantaged communities to address both social dislocation and political disaffection. Realism will be needed in these efforts. Voters in distressed communities are deeply skeptical that government initiatives can make their lives better. That skepticism has developed over decades, is reinforced by the decline of local businesses and labor unions, and will not fade overnight, especially given the political homogeneity of many of these communities and the influence of nationalized media. Change will take time.

Still, in our nation’s closely balanced politics, where the plutocratic populist Republican Party has struggled to produce even razor-thin majorities, modest improvements could have decisive political effects. Reducing the sway of right-wing populism will require that Democrats and their allies focus on emerging political opportunities and the careful design of interventions that can seize those opportunities as they develop. Density is not destiny, and lessening the nation’s geographic divide is critical to rebalancing and strengthening U.S. democracy.

About the authors

Jacob Hacker is the Stanley B. Resor Professor of Political Science at Yale University. He is the co-director of the Ludwig Program in Public Sector Leadership at Yale Law School, director of the American Political Economy eXchange at the Institution for Social and Policy Studies, and co-director of the multi-university Consortium on American Political Economy.

Paul Pierson is the John Gross Distinguished Professor of Political Science at the University of California, Berkeley. He is the director of the Berkeley Economy and Society Initiative and co-director of the multi-university Consortium on American Political Economy.

Acknowledgments

We would like to thank Alex Hertel-Fernandez for extremely helpful comments and the entire Equitable Growth production team for excellent and expeditious editorial and production work. Very special thanks to Lucas Kruezer, a predoctoral fellow at Yale’s American Political Economy eXchange, for the brilliant data work behind the two figures.

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Overview

Around the globe, people are increasingly dissatisfied with the state of democratic capitalism. In the United States and other rich democracies, economic policy has too often in recent decades produced rising economic inequality across individuals, as well as regions within countries, stagnant economic growth and innovation, rising costs of essential goods and services such as housing, health care, and education, greater economic insecurity, and declining job quality and stability.

Voters have communicated their discontent with a surge of support for populist parties, politicians, and political causes that challenge incumbent elites and profess to speak directly to the needs of “real” people. In some countries, the populist insurgency has a left-wing character, but in most cases to date, voters have gravitated to populism’s right-wing variants such as the AfD in Germany, the National Rally in France, Fidesz in Hungary, the Sweden Democrats, and the UK Independence Party.

This essay is the first in a series Equitable Growth will publish by a number of experts exploring the implications of right-wing populism for those making and following U.S. economic policies. In this essay—and throughout the broader essay series—we stress three intellectual contributions of the overall series.

First, we argue that the surge in support for right-wing populism merits attention not just from political pundits and strategists, but also from policy leaders who research, design, and implement economic policies. Put simply, the downstream effects of economic policy for politics and democracy merit far more attention than they have been getting in policy design and implementation.

Second, we argue that meeting this new view of economic policymaking will require drawing from a broader set of scholarship than traditionally has been engaged in the U.S. economic policy process. That includes economics but also expands to cover work in political science and sociology.

And third, we argue that U.S. policymakers, who often are used to thinking about American exceptionalism, need to learn from the broader global shifts in support for right-wing populism around the globe. This means placing the U.S. experience with right-wing populism into the broader context of the global shift toward this movement, and to look for potential causes and levers to dampen support both abroad and at home.

The essay series thus lays out the case for why U.S. policymakers should approach economic policy with an eye to its downstream political effects on democracy, as well as descriptions of what this approach could look like across different policy domains.¹²⁰ The essays take different approaches. Some focus on diagnosing how economic policy has produced conditions that fostered support for right-wing populism. Others propose new economic policy levers for mitigating the appeal of right-wing populism.  

No series could cover all of the possible connections between economic policy and right-wing populism. Instead, our goal is to offer a model of an approach to the design of economic policies that takes seriously how people experience the economy and society’s need for democracy. The essay series will cover a variety of important policy areas and invite further scholarly engagement. Importantly, we seek to model the kind of approach we think is necessary from research and policymaking, one that incorporates more disciplinary perspectives (especially from political science and sociology) and one that considers the United States in a comparative context, learning from the experiences of other countries around the world.

It is important to note that the turn toward right-wing populism in the United States not only threatens democratic institutions and systems but also puts Americans’ economic well-being at risk. Economic policy can work to counteract this trend and bolster U.S. democracy—but is less likely to do so as it has traditionally been developed. At a time when the broader policy community is still debating the implications of the 2024 presidential election results and the extent to which it was a referendum on former President Joe Biden’s economic policies, we hope that this essay series will broaden the debate about the future of economic policy and politics in the United States at a moment of democratic crisis.

Defining right-wing populism and reviewing its recent surge in support

There are numerous dueling definitions of right-wing populism.¹²¹ We adopt the definition offered by comparative political scientist Sheri Berman at Barnard College. This definition captures the core features of most right-wing populist movements: appeals and positions that emphasize “a Manichean, us-versus-them worldview in which the ‘us refers to the ‘people,’ defined often in ethnic or communal terms and seen as engaged in a zero-sum battle with ‘them,’ defined most often as liberal elites, the establishment, and minorities and/or immigrants’.”¹²² Equally important to the “us-versus-them” nature of right-wing populism, according to Berman, is its “disdain for many of the basic norms and institutions of liberal democracy, such as free speech, freedom of the press, recognition of the legitimacy of opposition, and acceptance of the separation of powers in general and limits on the executive in particular.”¹²³

Data from the Timbro Authoritarian Populist Index,¹²⁴ which tracks the electoral support that left-wing and right-wing populist parties have received in 31 European countries, show changing dynamics between European political parties between 1945 and 2023. More specifically, we can see that left-wing populism has fallen from its immediate post-World War II peak, while right-wing populist candidates and parties have steadily grown their mass electoral support. Support for right-wing populist politicians has now surpassed other traditional center-right parties (notably the Christian Democrats) and now is on par with stalwarts of the left (notably Social Democratic and Labor parties) and traditional conservative parties. (See Figure 1.)

Figure 1

The United States is no exception to this trend. The Great Recession of 2007–2009 and its aftermath saw the rise of the Tea Party,¹²⁵ a right-wing populist movement that fused a variety of sometimes-contradictory views.¹²⁶ These included opposition to financial bailouts for homeowners and financial leaders perceived to be undeserving, nativist appeals against immigrants, support for protection of traditional social benefit programs for deserving citizens (especially Social Security and Medicare), and skepticism of new government initiatives to control climate change and expand health care to those perceived to be undeserving such as young people and communities of color.

The Tea Party, in turn, laid the foundation for the surprise 2016 Republican Party nomination, 2016 election, and eventual reelection of Donald J. Trump to the presidency in 2024.¹²⁷ Departing from decades of Republican orthodoxy,¹²⁸ Trump’s presidential campaigns—though generally not his first-term governing agenda—pivoted to a right-wing populist platform, stressing protectionism, protection of core social programs for deserving Americans, and ethnonational attacks on immigrants.

Much ink has been spilled between pundits, scholars, and political strategists over the sources of President Trump’s rise and reelection in 2024.¹²⁹ But far too often, such takes have been based on the U.S. experience alone, pointing to idiosyncratic aspects or choices of the candidates in question and failing to recognize how right-wing populist shifts in the United States are part of broader global trends—trends linked to changes in economic policies over the past five decades.

Democracy and experience of the economy as goals for economic policy design

Why should policymakers—especially those focused on economic policy—care about the surge in right-wing populism in the United States and around the globe? Traditionally, economic policymakers have not tended to think about the downstream political implications of their policies, focusing instead on putting forward policies that maximize preferred economic outcomes.¹³⁰

While this essay series is not primarily aimed at critiquing economic policymakers, it also exists in the context of a broader debate that economic policymakers and economists have been having about the appropriate way to make economic policy. Recently, economists have struggled with their own sense of relevance in a Biden and Trump world.¹³¹ This essay series suggests that focusing policy purely on economic outcomes, as many economists have traditionally done, and the very real economic trade-offs policymakers must grapple with,¹³² is crucial but not sufficient at this moment in history.

The rise in right-wing populism across the globe requires economic policymakers, including in the United States, to think about how their proposals shape not just economicoutcomes in a narrow sense but also people’s experiences of the economy, filtered through their social identities, narratives, and social institutions and organizations.¹³³ To put a finer point on it, thinking about economic outcomes also requires thinking about democracy. Doing so is essential because of the threat that right-wing populism poses to both the U.S. economy and democracy.

The track record of right-wing populists in power is clear. Across countries, these leaders and parties tend to pursue policies that erode the rule of law, attack the foundations of an independent civil society, including universities¹³⁴ and the civil service,¹³⁵ and entrench personalistic control over the levers of government. This is how right-wing populists assume unchecked control over government processes and decisions previously guided by the rule of law and independent expertise.¹³⁶ Together, these interventions dampen economic growth and innovation and undermine the pillars of inclusive prosperity.¹³⁷ Thus, even for policy leaders who typically only focus on economic outcomes, considering the downstream political consequences of economic policy matters because of the substantial negative economic threats of right-wing populism.

How economic policy can help explain support for right-wing populism

As the essays in this series will argue, economic policy plays an important role both in helping to explain the rise of right-wing populism in the United States and other rich democracies and in providing a lever to dampen support for populist candidates, causes, and parties.

To say that economic policy matters for the appeal of right-wing populism, however, is not to say that support for right-wing populism depends on a simple tally of the economic benefits and costs that individuals have experienced. Indeed, the large literature in economics, sociology, and political science on the origins of right-wing populism suggests that objective economic circumstances are only a modest predictor, at best, of right-wing populist support.¹³⁸ Nor is it to say that economic policy is the only driver of support for right-wing populism, which includes many other factors we do not cover in this paper and may not be amenable to change through policymaking.

Instead, what we argue is that support for right-wing populism involves a more nuanced interaction between economic and cultural factors—interactions to which economic policymakers and researchers should be much more attuned than they have been as they think about policy design. Just as important to note, some hypothesized sources of support for right-wing populism—such as some forms of economic insecurity—can explain small shifts that may be relevant in the context of a close election, while other hypothesized mechanisms offer greater explanatory power working on deeper mechanisms.¹³⁹

Below, we detail some of the variety of the scholarship that documents links between past changes in economic policy and support for right-wing populism in ways that merge economic and cultural dimensions and consider a range of important outcomes related to right-wing populist support.

Economic dislocations and the unresponsiveness of government social programs

Even as individual-level objective economic security is not consistently related to support for right-wing populist causes and candidates, there is stronger evidence linking the perceived failure of social policies, especially in the face of economic dislocations and shocks, to shifts to right-wing populism. As one study documented, regions in the United Kingdom that were exposed to austerity-induced cutbacks in social programs were more dissatisfied with UK politics and more supportive of Brexit.¹⁴⁰

In a similar vein, an analysis of elections from 1990 to 2017 across rich democracies found that populist parties did better when incumbent parties made cuts to social spending, especially unemployment benefits, and populist parties fared worse when countries spent more on such benefits—evidence that compensating individuals and communities facing economic shocks can blunt demand for right-wing populism.¹⁴¹ And a third study found that government austerity, especially cutbacks to income support programs, pulls economically vulnerable regions and individuals to the populist right.¹⁴²

Trade is an especially important dislocation that may drive support for right-wing populism,¹⁴³ particularly when individuals feel their livelihood has been threatened by competition with other countries and especially when politicians can activate latent resentments and concerns about threats to the status of affected workers.¹⁴⁴ There is some evidence from the United States that greater government support for trade-affected communities can mitigate these polarizing effects of trade.¹⁴⁵

Beyond trade, scholars have also found that transitions to cleaner energy sources to address climate change can spur right-wing populist backlash among the populations who are most negatively affected by the costs of the transition, such as increased energy costs.¹⁴⁶

Community and regional decline

In a similar vein, feelings of grievance from living in a “left-behind” region, especially regions hollowed out by deindustrialization and trade, can generate resentments that fuel support for right-wing populism.¹⁴⁷ In Sweden, for example, research documented how depopulating areas experience negative spirals, with declines in local services sparking further out-migration.¹⁴⁸ As conditions worsen, voters in those regions feel ignored by mainstream political parties, and savvy right-wing populist politicians have found strong electoral success in playing up resentments against urban areas.

That work from Sweden resonates with research on the United States, which found that rural and exurban areas feel neglected by politicians and public policies—even when their objective economic circumstances are similar to those in other regions. Those resentments can then fuel appeals made by right-wing populist candidates and parties.¹⁴⁹

Cost-of-living shocks and inter-group competition

Although much attention on the appeal of right-wing populists has focused on rural versus urban cleavages, geographic differences even within urban areas matter. New research suggests that concerns about shocks to individuals’ cost of living—especially housing—can spur greater support for right-wing populism, especially when individuals feel they are in direct competition with immigrants for scarce resources.

Studying German rental markets, scholars recently documented that increases in local rent prices drive support for the populist right in urban areas, particularly among low-income voters who lack the resources to fully absorb potential rent increases and where individuals fear dislocation and threats to their social status.¹⁵⁰ Similarly, in Austria, researchers found that individuals’ support for right-wing populist candidates and parties increases when they are more exposed to potential competition with immigrants over limited housing stock, exacerbating a sense of competition over scarce and valuable resources.¹⁵¹ And looking across Scandinavian countries, research found that homeowners left behind in surges of housing prices became strongholds of right-wing populist parties.¹⁵²

Macrofinance, economic crises, and inequitable bailouts for economic elites

Another relevant area fusing economic and social concerns involves financial crises, and in particular the Great Recession of 2007–2009. Although business cycles do not appear to be strongly predictive of shifts toward the populist right, the experience of enduring financial crises, especially when paired with fiscal austerity-based responses by an incumbent government, have formed the basis for right-wing populist mobilization.

In the United States, for example, it was the 2007 financial crisis—and specifically the housing crisis and the subsequently proposed bailout measures—that fueled the proximate rise of the Tea Party movement within the Republican Party.¹⁵³ Looking across more countries, scholars have argued that the “financial crises of the past 30 years have been a catalyst of right-wing populist politics. Many of the now-prominent right-wing populist parties in Europe, such as the Lega Nord in Italy, the Alternative for Germany, the Norwegian Progress Party or the Finn’s Party are ‘children of financial crises,’ having made their breakthrough in national politics in the years following a financial crash.”¹⁵⁴

Loss of status

Another relevant dimension involves status, dignity, and fairness. Everyone has different forms of status across the various domains of our lives, derived from our identities as students, workers, family members, friends, volunteers, congregants, or hobbyists.

As we previewed above, scholars have found that when individuals’ sense of their social standing in their community falls, especially in ways that feel unfair, they become more receptive to appeals made by right-wing populists,¹⁵⁵ who provide alternative forms of status, identifying the sources of declining status in out-groups (such as immigrants) and elites (such as corrupt politicians or cultural leaders). It is important to note that the loss of status and dignity is not just a proxy for economic class; the same study, using the European Social Survey (covering 25 European countries), demonstrated that income level, educational achievement, and occupational class “explain only a limited amount of the variance in subjective social status.”¹⁵⁶

For instance, one researcher found that, looking across 11 Western European countries, when households experience greater labor market risk—though not actual unemployment—those households turn toward the populist right, reflecting threats to households’ social standing.¹⁵⁷ Another study found that loss of economic status above and beyond absolute changes in individuals’ incomes predicts support for the populist right.¹⁵⁸

Researchers of right-wing populism have dubbed this mechanism “nostalgic deprivation,” capturing “the discrepancy between voters’ subjective understandings of their current status and their perceptions about past positionality.”¹⁵⁹

Dignity at work

While declining social status has many causes,¹⁶⁰ one important way that people evaluate their social standing is through the meaning they find from their jobs.¹⁶¹ Threats to job security and quality—such as deskilling, automation, or offshoring—appear in research to be closely related to perceptions of economic unfairness,¹⁶² which, in turn, is linked to support for populist right-wing candidates.

By comparison, policies or institutions that improve workers’ jobs and status in the workplace can mitigate the appeals of right-wing populism. Unionized workers have objectively better working conditions and also report higher levels of social standing, dampening support for the populist right.¹⁶³ In some cases, unions may also create social identities for workers that can build greater solidarity with others—including immigrants and other minority outgroups—in ways that diminish the appeals of right-wing populists.¹⁶⁴

Conversely, declines in unionization may help explain rising support for the populist right, even in countries with previously high levels of union membership. Research on Sweden, for example, suggests that sharp declines in unionization through the mid-1990s can help explain the increase in support for right-wing populist voting among working-class Swedish workers.¹⁶⁵

A new approach to economic policymaking: Going beyond ‘deliverism’ to craft policy that resonates with people

While in office, former President Biden pursued a set of economic policies that broke from traditional approaches for economic governance, recognizing the ways that trade, antitrust, and consumer regulatory policies have, over decades, often eroded working- and middle-class jobs and advantaged concentrated economic interests over workers.¹⁶⁶ President Biden and his team sought to leverage historic new infrastructure investments to create high-quality new jobs in stagnating communities across the country. Building on new scholarship in economics and law, this bundle of approaches pursued by the Biden-Harris administration came to be dubbed “Bidenomics.”

The thinking behind Bidenomics and the framework we have laid out in this essay are quite aligned. Specifically, they both highlight how past economic policy decisions around trade and regulation have hollowed out working-class communities across the country and both focus on strengthening unions as an economic and democratic imperative, on checking outsized corporate influence on the economy and politics to boost government responsiveness to working- and middle-class workers and their families, and on investing in good jobs in specific communities and places, not just transferring money to people.

But there are some important ways in which our framework either goes beyond the Bidenomics approach or departs from it. Perhaps most notably, much of the Biden-Harris administration assumed that good economic policy decisions would speak for themselves. When presidential administrations make policy, they inevitably have a heuristic they use to quickly check whether a given policy design meets their internal goals. The Biden-Harris administration’s shorthand was sometimes dubbed “deliverism”—a strategy to achieve political support by producing concrete material gains for the public—and policies were evaluated internally in part by whether they fit the goals of deliverism.¹⁶⁷

In fact, as has been widely reported, deliverism underlaid a lot of the administration’s strategy around the enhanced Child Tax Credit in the American Rescue Plan. This policy delivered hundreds of dollars in monthly benefits to more than 60 million children for one year. The administration hoped that the public would appreciate the benefits of the short-term CTC expansion and then demand that Congress continue those benefits in the longer term.

Yet the expansion of the Child Tax Credit failed to build a popular constituency for the program. Recipients of the tax credit were no more supportive of the Biden administration’s policies than nonrecipients, and Congress ultimately did not permanently expand those benefits.¹⁶⁸

Part of what this essay series suggests is that expecting good economic policy to translate to good economic outcomes, which, in turn, will translate to political support for democracy, is misguided. As we described above, a large literature in the social sciences suggests that we cannot expect changes in individuals’ material conditions, on their own, to produce changes in an individual’s political views and actions—let alone changing their attachment to democracy—especially on such a short-term basis.

For policies to register political impacts, policymakers must craft policies that can resonate in individuals’ lives, and especially with their identities and the narratives that structure their worldviews over time. As one of us recently argued in Democracy Journal,¹⁶⁹ this will require significant changes to policy development, implementation, and messaging and narrative—and also will take time. People need to “see” themselves in the design and delivery of policies.¹⁷⁰

New criteria for economic policymaking

More research and experimentation is needed to help flesh out what a comprehensive approach to policymaking would look like when it takes into account people’s experiences of the economy, their identities and narratives, and support for democracy. But drawing from the essays in this series, as well as our reading of the social science literature on right-wing populism and economic policy, we sketch out several criteria for policymakers to consider.

First, economic policies need to affirm and activate people’s identities, especially their agency, dignity, and social standing. Too much of the U.S.-centric work on the appeal of right-wing populism creates a false dichotomy between whether voters were racist or xenophobic or whether they were responding to material shifts in economic conditions.

As this essay proposes, a more productive perspective—and one that aligns with existing research from around the world—is that what matters for many voters is a sense of agency and dignity in their own lives. The task then for policymakers is to craft policies that affirm social standing, agency, and dignity, especially for individuals whose standing might feel threatened by changing economic, demographic, or social changes, thus tackling “nostalgic deprivation.”¹⁷¹

One especially important source of identity involves community and place, and as such economic policies need to recognize that community and place matter to voters—especially in the U.S. political context, with its territorially defined system of political representation.¹⁷² Past research on support for right-wing populism in the United States and abroad stresses how important perceptions of community decline are for generating resentment against government agencies, as well as demographic groups perceived to be undeserving, such as immigrants, young people, or others who are seen as benefiting from government interventions while one’s own community is neglected.

For many years, economic policy has stressed the importance of “people over places,” encouraging fiscal transfers to individuals experiencing economic hardship and supporting policies that could help move individuals from economically distressed regions to more productive areas. Yet such policies fly in the face of the dense social connections and practical realities that moor individuals to specific places and ignore the ways that communities’ perceptions of neglect fuel right-wing populist appeals. Policymakers need to focus on programs that can reinvest in communities experiencing economic and social decline and, in the process, provide alternative narratives about the standing of individuals living and working in those communities. 

A potential starting point for policies that reinforce, activate, and support social identities and dignity is shifting the balance of economic policy. Our current system often focuses predominantly or exclusively on “compensating the losers”¹⁷³ of trade, automation, globalization, and other economic shifts through government transfers after these individuals experience dislocations. We propose a modification, to an approach that more heavily weights predistribution—changing the balance of economic power, resources, and outcomes before tax-and-transfer policies by intervening directly in markets to reduce inequality.

One example of this approach is increasing the minimum wage rather than increasing tax credits available to those workers, thus shifting underlying economic and political resources and power.¹⁷⁴ In tandem with this predistribution approach, policymakers might also prioritize efforts that rebuild good jobs in specific communities, attacking the root problem from multiple angles.

Last, people need to perceive that the government is meeting their needs and not simply acting on behalf of economic elites. Past research from the United States and abroad makes clear the toxic brew generated by a sense that the government is not acting on one’s behalf, especially during periods of economic risk or dislocation. The contribution of financial crises, in which the government is seen as bailing out financial institutions while neglecting the economic strains faced by working and middle-class Americans, is one example of this dynamic, as is the finding that more generous Unemployment Insurance buffered the effect of economic crises on support for right-wing populists across European democracies.

This will require economic policies that adequately meet the economic risks faced by citizens, of course. But policies also must go beyond simple risk-buffering to actively show citizens the role that the government is playing in their lives. This means that policies must be visible, tangible, and traceable back to the government.¹⁷⁵

In the United States, this has always been a daunting task, given the growing complexity of government (across, for instance, different agencies and levels of government), the decline of traditional and trusted media outlets covering government, and partisan polarization. To the extent that policymakers can break through these barriers, research suggests the need for policies to build on the trusted relationships that citizens hold with civic organizations, such as unions, churches, or community-based groups.

Conclusion

Our framework suggests a new way of thinking about the 2024 election results and its implications for Bidenomics battles over the future of progressive economic policy. Moreover, our arguments are relevant now, as policymakers consider whether to focus on a politics of “abundance” that focuses on removing constraints on new production, manufacturing, and innovation.¹⁷⁶

Our framework suggests that the abundance approach could reduce the sense of competition over scarce goods and services—such as housing or health care—that can fuel right-wing populism. At the same time, we urge an important note of caution: Without adequate attention to how the gains of abundance are shared—and even more, how the gains of abundance are perceivedto be shared and with whom—how abundance policies build a sense of community, dignity, and identity, and the organizational underpinnings of abundance policies, an abundance approach that prioritizes production at all costs risks generating populist backlash.¹⁷⁷

Broadly speaking, the urgent need for a new approach to economic policymaking is clear, as the U.S. democratic system—and other capitalist democracies around the world—face existential threats from rising right-wing populist movements. The framework proposed in this essay and the evidence from the broader essay series that will follow are not comprehensive; indeed, our hope is that this initiative can help spur further research, experimentation, and policy development in the months to come. Such work will be essential to building policies that not only deliver more inclusive and stable economic growth, but also reinforce the political foundations of democracy in a moment of democratic crisis.

About the authors

Alexander Hertel-Fernandez is associate professor and Vice Dean at the Columbia University School of International and Public Affairs and an Equitable Growth fellow. His research and teaching focuses on the intersection of politics and markets in the United States, especially the politics of policy design, labor, and government influence. He previously served in the Biden-Harris Administration in the U.S. Department of Labor and the Office of Management and Budget and is the author or co-editor of three books, most recently The American Political Economy (Cambridge, 2021).

Shayna Strom is the president and CEO of the Washington Center for Equitable Growth. Previously, Strom served as the chief deputy national political director at the American Civil Liberties Union. She also has had a significant government career, including serving on the Biden-Harris transition team, working for 4 years in the Obama White House Office of Management and Budget, and serving as counsel on the Senate Judiciary Committee for Sen. Al Franken (D-MN). Strom has taught at Johns Hopkins University, Sarah Lawrence College, and the Biden Institute at the University of Delaware.

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