Democrats Being Party of the Rich Could Cost Them 2024 Election

• Data shows wealthier Americans are now solidly behind the Democratic Party, a generational realignment that has altered power dynamics in D.C.
• The shift has arguably led Democrats to embrace more moderate economic policies, turning off progressive grassroots voters they need to win.
• To gain back working-class votes, some believe major political parties need to make income inequality a key facet of their 2024 platforms.

Republicans' grasp on the upper crust of American society is beginning to slip, while Democrats are increasingly becoming the preferred party of America's elite. And it could cost them their grip on the White House.

Republicans have appealed to America's wealthy with a platform that's long committed itself to lower taxes and fewer regulations for big businesses. However, wealthier Americans are gravitating more toward Democrats, voting blue in the last two presidential elections. And the new appeal to wealthier individuals is creating a divide with a key Democratic voting bloc: blue-collar workers.

The trend threatens to widen existing fissures between party moderates and its traditionally lower-earning and more progressive base, potentially threatening Biden's chances for reelection and Democrats' ability to retake the House of Representatives. Particularly as working-class voters, including working-class voters of color, begin gravitating toward the GOP.

"It used to be that the Republican Party was more or less the party of the well-off and affluent," Anthony Fowler, a professor in the Harris School of Public Policy at the University of Chicago who studies political polarization, told Newsweek. "And it seems like that's shifting."

Demographic data compiled in the 2016 and 2020 elections showed that the top 40 percent of income earners preferred the Democratic candidate for president (Hillary Clinton or Joe Biden) over the Republican (Donald Trump), signifying a sizable coalition shift from where the party was in the previous decade.

Recent data shows the trend is likely baked in. In a CNBC survey, America's millionaires said they are more likely to support Biden over Trump in the upcoming presidential election by double-digit margins. And most of the nation's voters are not wealthy.

Of the more than 122 million registered voters in the 2020 election, roughly half reported family incomes of less than $100,000 per year, according to 2021 estimates by the U.S. Census Bureau. Just under 19.7 million reported household incomes between $100,000 and $150,000. About 23 million had household incomes surpassing $150,000 per year.

And that's just those who responded. Some 21 million registered voters declined to report their income.

Money Matters

From 2000 to 2017, political donations by CEOs of S&P 1500 companies showed a significant preference for Republican candidates, according to a 2019 paper from the National Bureau of Economic Research. Of nearly eight dozen donations of over $1 million made in the 2016 presidential race, just 18 of them were for Democratic candidates, according to one New York Times review of campaign finance data. A later study found that the proportion of Republican-leaning CEOs had actually increased, from 63 percent in 2008 to 71 percent in 2018.

Four years later, however, Democrat Joe Biden benefitted from major contributions from affluent donors in industries like big tech and finance. In the final six months of his campaign, nearly $200 million of his war chest had come from donors giving six figures or more.

It was a notable shift for a party counting figures like Elizabeth Warren and Bernie Sanders who had long raged against the excesses of the country's wealthiest 1 percent. But other observers were less than surprised, seeing it as a natural conclusion for a shift in the party's rhetoric that began in the early 1990s.

By the 2010s, polling showed Democratic candidates' electoral appeal among affluent voters had reached above-majority levels. When voters went to the polls in the 2020 election, Biden would outperform Clinton's performance among the nation's most affluent voters by six points and would dominate Trump's returns among upper-middle-class voters by double-digit margins.

Business-Friendly Liberals

Historic data shows Democratic presidential administrations typically experience higher S&P 500 averages than Republican administrations. Of the top 10 job-creating presidents in U.S. history, six have been Democrats, lending support to the theory Democratic administrations tend to be better for business than Republican ones.

However, their party's grassroots tend to support policies that run counter to the interests of the ultra-rich. According to averages of Gallup polling compiled since 2008, approximately seven in 10 Democrats and Democratic-leaning independents support heavier taxes on the rich, compared to a consistent third or less of Republicans. And that gap among voters has been growing.

Meanwhile, Democrats that have succeeded in their presidential bids over the past few decades have rarely embodied the policies favored by progressives like Sanders and New York Representative Alexandria Ocasio-Cortez.

And while Biden has embraced progressive policy positions on student loan debt and a federal minimum wage of $15 an hour for federal employees, Democrats overall have shown an aversion to other policies that are gaining favor among party activists, Yale Ph.D. candidate and progressive journalist Sam Zacher argued in a recent paper examining the party's increasing favorability among the upper class.

One American study of the Democratic Party platform that Zacher cited found that while the platform over the years increased its mentions of welfare policies, other policies—like taxes on the rich and higher corporate tax rates—have not received similar mention. Even recent progressive initiatives like the COVID-era relief programs are being rolled back under a recently enacted debt ceiling deal between Democrats and Republicans.

In other efforts designed to appeal to the rich, Democrats created a sizeable rift not just between party moderates and progressives, but between themselves and the working class, who have recently gravitated to the GOP.

In the 2016 election, approximately 60 percent of white working-class voters voted for Trump, according to a Vanderbilt University study. Four years later, demographic data showed Trump's vote share in lower-income counties across the U.S. increased by several points, while Biden ran up the tally in higher-educated (and more affluent) urban and suburban counties.

Other data shows the working class squarely in conservatives' domain as well. Republicans represent 64 percent of congressional districts with median incomes below the national median, while nine of the 10 wealthiest congressional districts are represented by Democrats, according to data compiled by Democratic Ohio Representative Marcy Kaptur's office. To some degree, Fowler said, the trend is likely explainable in both parties' rhetoric: Democrats used to embrace the working class until they didn't.

"Qualitatively it seemed like there was a pretty big change between 2012 and 2016 in terms of what the parties were talking about," Fowler told Newsweek. "You had Obama doing a pretty good job going to working-class places in Pennsylvania and Indiana and so forth. By 2016, it almost seemed like it had slipped. Hillary Clinton didn't make much of an effort to reach out to those working-class voters. Trump is not an everyman by any stretch of the imagination, but he was going to be reaching out to those voters and winning them over."

Sounding the Alarm

Zacher told Newsweek that while the party's richest and more working-class voters are likely to have areas of policy that bind them together, Democrats will continue to lose working-class white voters to Republicans as well as progressive spoiler candidates if they don't take action to decrease the cost of living and expand educational opportunities.

Mainstream Democrats seem aware of the fact, too. In a February address, Biden called on members of the Democratic Party to renew their commitment to the nation's working class, saying the shift was because the working class believed

"A lot of them came to believe we stopped thinking about the working class the way we used to," Biden said at the time.

Republican thought leaders, meanwhile, have seized on the opportunity.

Recent columns published by conservative outlets like The National Review have called for an end to government subsidies for corporations long-considered engines for economic development. Conservative pollsters like Rasmussen have also found an increasing affinity for ending "corporate welfare" among Republican voters across the country.

Millionaire Activism

Once the managing director of one of the world's most preeminent investment companies, former BlackRock executive Morris Pearl now serves as chairman of a group of affluent activists called Patriotic Millionaires, a group committed to raising taxes on the rich.

Though Pearl has personally given tens of thousands of dollars in donations to Democratic candidates and causes in recent years, he told Newsweek that he feels neither party is acting urgently to address income inequality.

Pearl's group recently traveled to a small, deeply conservative town in North Carolina called Whiteville to talk to voters about their main issue—income inequality—as a sort of test run for their policy approach on a more national scale.

The small city of roughly 4,800 is diverse—47 percent white and 41 percent Black, according to 2020 census data—but it's also poor, and poorly educated. Less than one-quarter of the city's population holds a bachelor's degree, while roughly 27 percent lived below the poverty line. It was also highly conservative. In the 2020 presidential election, just under 36 percent of surrounding Columbus County, where Whiteville is located, voted for a Democrat.

Some of their initial findings seemed to point to a Democratic party that had lost ground with the working class.

While many of the people they spoke to initially favored progressive policies—higher taxes on the rich, a higher minimum wage, less power for the uber-rich—most, Pearl told Newsweek, outright refused to support Democratic candidates.

Update 6/19/23, 5:45 a.m. ET: This article was updated with additional information.