Midterm Elections and the Labor Market

The whole House of Representatives, a third of the Senate, 36 governorships, and many state legislature seats will be up for grabs in the midterm elections on November 6. The latest polls suggest that Democrats will take the House, while Republicans hold onto the Senate—but anything could change between now and election day, and polls are not always perfect, as the 2016 Presidential Election demonstrated.

With election day around the corner, we wanted to highlight how (and if) the job market could affect the midterm elections—and be affected, in turn, by their outcomes.

Can the strength of the job market affect the outcome of the midterm elections?

The short answer is it won’t. Political scientists have found that, while economic conditions influence the outcome of presidential elections, they matter far less than presidential approval ratings for midterm results. Typically, the president’s party loses seats in both the House and the Senate, regardless of the state of the economy. Over the past 28 midterm elections since 1906, the president’s party lost about 30 House seats and 4 Senate seats on average—and whether unemployment was rising or falling made no real difference.

Losses are notably steeper, however, when the president’s job approval is below 50%. According to Gallup’s tracker, President Trump’s job approval has never risen past 45%. Unsurprisingly, then, FiveThirtyEight’s 2018 election forecast, which aggregates the highest quality polls, predicts that Democrats will pick up a higher-than-average number of seats (their best guess is 38) and regain control of the House.

U.S. House Net Seat Gain or Loss for President’s Party, by Change in Unemployment Rate in Year Prior to the Election

There is no pattern: more impressive reductions in the unemployment rate are not associated with smaller seat losses.

YearPresident/PartyYear-over-year change in unemployment rate prior to electionSeat gain/loss for president's party 
1942Roosevelt/Dem-5.2-45
1922Harding/Rep-4.3-77
1918Wilson/Dem-3.4-22
1906Roosevelt/Rep-2.3-27
1950Truman/Dem-2.2-28
1926Coolidge/Rep-2.1-9
2014Obama/Dem-1.1-13
1994Clinton/Dem-1-54
1978Carter/Dem-0.9-15
2006G.W. Bush/Rep-0.5-30
1962Kennedy/Dem-0.4-4
1966Johnson/Dem-0.4-47
2018Trump/Rep-0.4*?
1998Clinton/Dem-0.25
1986Reagan/Rep-0.1-5
2010Obama/Dem-0.1-63
2002G.W. Bush/Rep0.48
1910Taft/Rep0.7-56
1990G.H.W. Bush/Rep0.8-8
1958Eisenhower/Rep1.1-48
1954Eisenhower/Rep1.8-18
1974Ford/Rep1.8-48
1946Truman/Dem2-54
1970Nixon/Rep2.4-12
1982Reagan/Rep2.5-2
1934Roosevelt/Dem3.29
1914Wilson/Dem3.6-61
1938Roosevelt/Dem4.7-72
1930Hoover/Rep5.7-52

*The civilian unemployment rate was 4.1% in November 2017 and had fallen to 3.7% by September 2018, the last month for which data were available at the time of publication. Sources: Bureau of Labor Statistics and Federal Election Commission.

Could the outcome of the midterm elections affect the job market? 

Data suggests there is no clear relationship between Republican or Democratic control of the House and the change in unemployment in the year following the midterm elections. Changes in the unemployment rate also seem to have little to do with whether the government is unified or divided.

Change in Unemployment Rate in the Following Year, by Political Party in Control of the Presidency and House Following the Midterm Elections

Again, there is no pattern: neither party nor type of government (unified versus divided) is associated with better performance in reducing unemployment.

YearPresidentHouseChange in unemployment rate prior in the year following the election 
1942DemocratDemocrat-2.8
1938DemocratDemocrat-1.8
1934DemocratDemocrat-1.6
1950DemocratDemocrat-0.7
1962DemocratDemocrat0
1978DemocratDemocrat0
1966DemocratDemocrat0.3
1914DemocratDemocrat1.7
2010DemocratRepublican-1.2
2014DemocratRepublican-0.8
1946DemocratRepublican-0.3
1998DemocratRepublican-0.3
1994DemocratRepublican0
1918DemocratRepublican0.9
1982RepublicanDemocrat-2.3
1954RepublicanDemocrat-1.1
1986RepublicanDemocrat-1.1
1958RepublicanDemocrat-0.4
1970RepublicanDemocrat0.1
2006RepublicanDemocrat0.2
1910RepublicanDemocrat0.3
1990RepublicanDemocrat0.8
1974RepublicanDemocrat1.7
1930RepublicanDemocrat7
1922RepublicanRepublican-4.4
2002RepublicanRepublican-0.1
1906RepublicanRepublican1
1926RepublicanRepublican2.2

Sources: Annual unemployment changes following elections prior to 1950 come from the National Bureau of Economic Research (NBER) Annual Estimates of Unemployment in the United States, 1900-1954. Unemployment changes following elections from 1950 onwards come from the Bureau of Labor Statistics, and are calculated from November of the election year to the following November. Election outcomes are classified by party using information from the Federal Election Commission.  

That’s not to say that policy doesn’t matter—it does. And it’s not to say that there aren’t policy differences between the parties—there are.

But many of President Trump’s proposed economic policies are regulatory in nature and do not depend on Congress. For example, he has pursued tariffs and several changes to labor laws through executive actions (or through reversals to President Obama’s executive actions) rather than through legislation. Those kinds of policy changes will continue unabated, no matter who controls the House.

Written by

ZipRecruiter's Labor Economist, Julia conducts job market research and provides unique insights to job seekers, employers, and the ZipRecruiter leadership team.

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