‘Tale of two economies’: Biden struggles to hold off Trump in Georgia

Pay rises in Clayton County, home to Atlanta’s vast airport and highways carrying cargo to and from the state’s bustling ports, were the best in the US over the past year.

Yet Sam Day, an insurance adviser who works in the county’s Southlake Mall, said she was in a “really scary spot”, as the soaring cost of living crimped her disposable income. “It’s hard to save for the future when I’m just struggling to get by day to day.” 

It is a sentiment echoed across the US — and it could be the reason Americans later this year vote out Joe Biden and return Donald Trump to the White House.

The US economy is booming. The S&P 500 is up more than a third since the start of 2021 and hit record highs this year. Unemployment is near record lows. Investment has poured into infrastructure and cleantech projects around the country. And gross domestic product is expanding at the fastest clip of any advanced economy.

But Biden, the president who has overseen this bonanza since defeating Trump in 2020, is getting little credit. Polls show that few voters think they are better off now than four years ago, many remain grumpy about inflation, and most of them distrust Biden’s handling of the economy.

It is all visible in Georgia, one of the swing states that Biden won in 2020 and that could decide the election again in November — but where wide income disparities and anxiety about high food and housing costs are eroding support for the president.

How Georgians feel about their local economy could decide who rules Washington next year, an outcome that will shape politics far beyond US borders.

Line chart showing that increases in prices have outpaced increases in wages in Georgia since 2021

Democrats are hopeful, pointing out that in addition to Biden’s victory in the state in 2020, Georgia also sent two Democrats to the US Senate. Biden’s sweeping climate legislation has spurred a cleantech construction boom that will create jobs — and win votes — across the state, they argue.

Yet RealClearPolitics’ polling average for the state puts Trump 5.7 per cent above the president. And views of the Georgia’s economic progress are as diverse as the state’s economy itself.

Some voters say that far from helping Georgia, Biden’s policies, including the huge Covid-19 stimulus spending, have done harm. Now that people were not “spending like there was no tomorrow”, business had slowed, said Shumon Miah, a Clayton County jeweller.

For many in Atlanta, however, the state’s thumping metropolis, times are good — and the mood about Biden upbeat.

The arrival of multinationals such as Hapag-Lloyd and TK Elevator, which both moved their North American headquarters to Atlanta in 2022, along with film and TV production companies lured by tax breaks, has boosted a city that already boasted homegrown giants Delta Air Lines and Coca-Cola.

“Georgia is a popular place to be,” said Jerry Parrish, chief economist at Metro Atlanta Chamber. “It’s been the top state for business for 10 years in a row.”

You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.

Gathered in a wood-panelled room in Maggiano’s Little Italy, the members of the Rotary Club of Buckhead were optimistic too. Of 26 people the Financial Times polled there, more than three-quarters thought US economic conditions were excellent or good and more than 60 per cent said Biden was doing a good job, a positive result in one of the few districts of Atlanta that voted for Trump in 2020.

Even the burst of inflation on Biden’s watch, to a multi-decade high of 7 per cent in 2022, got a pass.

“The inflation came from many different sources,” said Mac Gordon, who has worked in the film and TV industry for 35 years. “I find it to be sort of ridiculous to blame presidents for specific problems, like high gas prices.”

One explanation for Georgians’ diverging views of the economy is that their experience of it is so varied, given the contrast between Atlanta’s wealthy areas and the state’s poorer ones.

“It’s bifurcated,” said one Rotarian. “Much of South Georgia has been left behind, with an ageing population, a high poverty rate, high crime, drugs, serious health problems, and not enough tax revenue to support proper law enforcement and education.” 

It is a “tale of two economies”, Reginald Chever, a vice-president and regional executive at the Atlanta Fed, said in an interview last month. “There were certainly consumer groups already at a disadvantage. As inflation rose quickly, it put some added strain and pressures on their households.”

Downtown Cartersville, Georgia
Downtown Cartersville, the seat of Bartow County, which is benefiting from a wave of cleantech investment © Ross Landenberger/FT
Buckhead, Atlanta
Buckhead, Atlanta’s most prosperous area © Ross Landenberger/FT

High-skilled jobs paying above average had accounted for most of the growth in Georgia since the pandemic, pointed out Jon Willis, another Atlanta Fed official — a fact that had helped keep consumer spending strong but also widened inequalities.

Biden’s ambition is to fix that by building an economy “from the middle out and bottom up”. The president repeated the phrase at a campaign event this month in Atlanta.

That goal should take shape in Bartow County, north-west of Atlanta, where Hyundai Motor Group and SK On plan to spend more than $5bn building an electric vehicle battery plant. Another South Korean-owned company, Hanwha Qcells, will spend $2.3bn on a solarpanel manufacturing factory. 

Melinda Lemmon, who heads the local Economic Development Agency, said the two plants alone would create 6,000 jobs in a county of 112,000 people. “With quality job opportunities, people can stay here and live and raise a family.”

The White House has hailed this kind of investment and others in Georgia as proof that the industrial strategy embedded in its $369bn Inflation Reduction Act, with hundreds of billions in cleantech subsidies and tax breaks, is working.

But even that is a matter of debate in polarised Georgia.

“There’s no doubt that there’s been a tailwind blowing in Georgia’s direction for some time,” said Mark Muro, a senior fellow at Washington’s Brookings Institution think-tank. It would be difficult to separate the impact of federal from state initiatives “but these federal policies are certainly substantially supportive”. 

Brian Kemp, the state’s Republican governor, said the IRA had simply thrown money at “what was coming anyway”. If anything, he told the Financial Times, the influx of federal stimulus spending had only worsened inflation.

That view resonates in Bartow County, which heavily backed Trump in 2020 — and whose representative in Washington voted against the IRA in Congress. The well-paying green tech jobs sound good, but will only come when the plants open in 2025.

It leaves some locals yet to be convinced that Biden’s economic agenda is making a difference on the ground.

Bar chart showing a rising index of house prices in Georgia

Saturday Carter, who works on the quaint main street in Cartersville, Bartow’s county seat, contrasted her view of federal support for the local economy with aid for Israel.

“The US is just an arms dealer right now for whatever power it’s allied to,” Carter said. “And the money that it spends isn’t really being spent well on its citizens, even though it’s supposed to be.” 

The gloom stemmed from another more local problem, said Jeffrey Turner, the chair of Clayton County’s board of commissioners — the cost of housing.

Jeffrey Turner, the chair of Clayton County’s board of commissioners
Jeffrey Turner, the chair of Clayton County’s board of commissioners © Ross Landenberger/FT
Midtown Atlanta
Midtown Atlanta. The city’s economy has boomed in recent years © Ross Landenberger/FT

“We used to be known as a second-chance market, where people who had maybe faced a foreclosure somewhere else could come and get decent housing at an affordable price,” Turner said. “Our average home price used to be attainable, but that was before everything inflated.” 

That inflation has been stunning. House prices in the county rose by 30 per cent in the two decades before the pandemic. In the two years after, they leapt by 50 per cent.

An effort to build new homes quickly is under way. But the county is struggling to retain young people. “When another agency or government offers them $1 more to work for them they’re gone,” Turner said. “They want to live the good life and when they’re dropping a lot on rent, it’s easier for them just to pick up and go.”

Conscious that the outcome of the US election could depend on Georgia, the two Democrat senators, Raphael Warnock and Jon Ossoff, have been lobbying hard for more federal funding — and to ease the bottlenecks accompanying fast economic growth.

“My job is to ensure that, to the greatest extent possible, there’s robust investment in the kinds of infrastructure that Georgia most needs,” said Ossoff, adding that he spends “a significant amount of time” working with local officials to compete for federal resources.

But they have their work cut out. Inflation has fallen across the US, but many Georgians, even in Democratic strongholds such as Clayton, are still looking fondly back to the pre-pandemic economy — and the president who ran it.

“The only thing I want is Trump back,” said Miah, the jeweller. “When he was here, he ran the country as a business.”


Leave a Comment