Posted on Tuesday, October 18, 2022
Current economic trends concern many Texans, according to a report released from the University of Houston and Texas Southern University. How individual survey participants saw inflation expectations was heavily influenced by their income level and political allegiance, the study showed.
In the “Texas Trends 2022 – Inflation Expectations” survey, the TSU Barbara Jordan–Mickey Leland School of Public Affairs and UH Hobby School of Public Affairs found almost half (45.6%) the survey’s respondents predicted significant price increases will continue over the next decade. By comparison, fewer than a quarter (22.8%) saw inflation being resolved over the next decade.
The statistics suggest many households may be expecting to stare down a money crunch.
“Only 12.9% of participants in the survey believed their income next year will outpace inflation. At 87.1%, the clear majority expected their purchasing power to diminish, especially for food, gas and electricity,” said Agustín Vallejo, post-doctoral fellow at the UH Hobby School of Public Affairs.
But not all survey participants saw themselves on the losing end of inflation. Opinions could be divided along several distinctions, including income and political affiliation.
“Expectations were sharply different when you looked at households’ income levels. Most respondents earning less than $39,999 expected inflation to grow faster than their salaries will keep pace. But the majority of those earning more than $200,000 believe their purchasing power will grow, cancelling the pain of price rises,” said Pablo Pinto, director of the Center for Public Policy and professor at the UH Hobby School of Public Affairs.
Divisions along political affiliation were noted, too. In general, most respondents who identified themselves as Republican negatively viewed the balance of inflation versus income. But most respondents who identified as Democrat were more optimistic in their predictions, with a majority believing inflation will level off and salaries will at least keep pace.
“This is not a surprise, actually. History suggests the same pattern manifests according to which political party has majority control in the country. With President Biden being a Democrat, the theory expects the opposing party – Republicans, currently – to feel the country is heading off course and economic worries are ahead,” said M.C. Sunny Wong, professor at the UH Hobby School of Public Affairs.
The theory held true when Barack Obama, a Democrat, was in the White House. “Studies then showed more people in Republican-dominated states expected inflation to build with a Democrat as president. But when Republican Donald Trump was elected, Democrats became the pessimists about inflation. It seems to be the way history unfolds,” said Carroll G. Robinson, associate professor of political science at Texas Southern University.
More analyses of these and related issues are covered the “Texas Trends 2022 – Inflation Expectations” report.
Category: News Media