Ahead of the 2024 election, MTPR will bring you coverage on issues we’ve heard are most important to voters — including the cost of living. MTPR’s Austin Amestoy did some digging to find out how much the cost of living has changed over the last four years, how much influence politicians have over your pocketbook, and how voters can weigh these issues at the ballot box. He joins News Director Corin Cates-Carney to share what he learned.
Corin Cates-Carney: Montanans have told us the economy, the cost of just about everything is important to them as they cast their votes this year. Austin, you spoke to some folks about this, what did they have to say?
Austin Amestoy: Let’s start with Missoula resident Diane Savage Connor. She lives in a single-level home and retired five years ago. She tells me she had to pick up hours nannying last fall just to afford her property tax bill.
Diane Savage Connor: I’ve always been very frugal, because I was a stay-at-home mom and had to live on one income. I just figure, as long as I’m healthy enough to work, I might as well keep earning money.
Austin Amestoy: Property tax increases, groceries and power — Montanans are spending more money than they used to on basic needs. I also spoke to Annie Meyers from Helena about this. She and her boyfriend have struggled to find an affordable place to live in the city.
Annie Meyers: It’s just exploded. I’ve never — I mean, even when I first moved out, you could find something pretty decent for under a grand, and now that just doesn’t exist.
Corin Cates-Carney: Put some numbers on this for us. We’ve heard a lot about inflation rates rising, home values going up over the last few years. What did you find about how much consumer prices have changed?
Austin Amestoy: We can really trace the recent spike in prices back to May 2020. Economist Patrick Barkey pulled some stats on how much some prices have increased since then. He leads the Bureau of Business and Economic Research at the University of Montana.
Patrick Barkey: Well, for food, it’s between 20% and 30% higher. For energy, 40% to 50% higher. Some services, a lot more; many services, not much more at all. So, you get into some variability.
Corin Cates-Carney: Those are some pretty stark increases.
Austin Amestoy: Yeah, and that can lead to a lot of finger pointing in campaign rhetoric. So, let’s cut through the noise and talk about some of the big causes behind price spikes over the last four years, who actually has the power to impact the economy, and how Montanans can be informed “economic voters.”
Corin Cates-Carney: Sounds like a great roadmap. Take us back to May 2020, Austin — what started driving consumer prices up?
Austin Amestoy: Right at the onset of the pandemic, governments ordered people to stay home, businesses closed for a couple weeks, and global transportation more or less froze. That initial shutdown was long enough to really disrupt the flow of goods. That meant that high-demand products started increasing in price due to short supply, and those shortages cascaded across the market. Montana State University economist Christiana Stoddard used the example of the computer chip shortage.
Christiana Stoddard: That made new cars really expensive. New cars were getting really expensive, so people started substituting with used cars; used cars got really expensive. So, these supply chain things impacted many more markets than just a single one.
Austin Amestoy: Then the labor market thinned out as workers resigned in waves. To court new employees, many businesses raised wages, and to afford higher wages, many raised their prices.
One important note here, though — Montana labor department data show that many resident's wages in the state have grown faster than consumer prices have. Average pay in 2023 was 32% higher in Montana than in 2018. Only three states’ wages grew faster.
Corin Cates-Carney: So, does that mean Montanans aren’t feeling the pinch of inflation as bad as people living in other states?
Austin Amestoy: I asked Barkey that question, and he told me it’s complicated. While many Montanans’ wages have likely outpaced inflation, that doesn’t mean it’s true for everyone.
As all of this was happening, Congress during the pandemic passed a series of relief packages to try to keep the economy afloat.
Corin Cates-Carney: Right. Listeners might remember some of those names: the CARES Act, the Paycheck Protection Program, the American Rescue Plan Act. The first two were signed by then-President Donald Trump. The latter was signed by President Joe Biden.
Austin Amestoy: And, according to pandemicoversight.gov, the grand total of those spending packages crested $5 trillion.
So, to recap: pandemic shutdowns disrupted supply chains, consumer demand for some products couldn’t keep up with supply, and Congress flushed the economy with cash.
Stoddard says this is where the finger pointing often begins when it comes to inflation.
Christiana Stoddard: Many people want it to be like, ‘Oh, it’s the government causing it by having these stimulus checks,’ or, ‘Oh, inflation isn’t real. It’s all supply chain issues.’ But, the reality was, it was a combination of all of those things.
Corin Cates-Carney: OK, so the story behind rising prices is complicated. Is it possible to sharpen the focus on who is responsible for those increases?
Austin Amestoy: Well, let’s start with the easy answer: no single president or member of Congress caused your grocery bill to go up. But their collective actions may have had an impact.
Stoddard told me the national economy is sort of like a house:
Christiana Stoddard: I think sitting presidents can do better or worse jobs of the home maintenance. I think they can be more or less assertive about eliminating the termites. But, the overall structure of the house — they don’t have that much control over.
Austin Amestoy: Many economists also place some blame on Congress for approving too much new spending in the years following the pandemic. UM economist Patrick Barkey also points to the Federal Reserve, which can help cool inflation by raising interest rates. He and other economists think it acted too slowly to prevent prices from rising.
Corin Cates-Carney: But, it still sounds like the big takeaway for listeners is that economists generally don’t blame one president or one policy for the price hikes we’ve felt.
Austin Amestoy: That is the big takeaway, yeah.
Corin Cates-Carney: So if we can’t hold one person or policy accountable for the rising prices, how can people thinking about the economy use this information when it comes time to vote? How much sway do elected officials in Montana have over prices?
Austin Amestoy: That brings us to our third expert.
Bryce Ward: I’m Bryce Ward, I live in Missoula, Montana, and I’m an economist.
Austin Amestoy: I asked him that second question, about whether elected Montanans can influence prices. He told me to picture a small boat out at sea.
Bryce Ward: Montana is the boat. We do not control the ocean — whether there’s storms, which way the currents are going, which way the wind is going — but, we do get to control our boat.
Corin Cates-Carney: So, the U.S. economy is pretty much out of Montana’s control, but politicians here can help us navigate it. Is that what Ward means?
Austin Amestoy: Exactly, Corin. And he says there are some specific expenses our elected leaders here do have some influence over. Two big ones are housing policy and property taxes, both of which are in the limelight right now.
Corin Cates-Carney: Right — and if listeners want to catch up on why home values and residential property taxes spiked last fall, they can find a separate story you did earlier this year at mtpr.org.
Austin Amestoy: Yep, that story is called “Making sense of Montana’s property tax blame game.” For now, though, I want to leave listeners with a tool Ward talked about that may help you be a more confident economic voter. He called it “the three Ps.’”
Bryce Ward: Does the person that you’re potentially voting for agree with you on what the problems are?
Austin Amestoy: First, Ward suggests identifying the things you consider economic problems — maybe gas prices, housing supply, or property tax rates, for example. Research your candidates to see if they also identify those as problems. Then:
Bryce Ward: What do they think the priorities are amongst the things that are problems?
Austin Amestoy: Priorities. How much does the candidate you’re considering voting for prioritize those issues? If they seem low priority, they may not follow through. Finally:
Bryce Ward: “What are the policies they’re going to try to do to address the problem?”
Austin Amestoy: The big one — policy. The economists I spoke with said individual policies are where candidates can most influence specific aspects of the cost of living. Take some time to research your candidates’ policy positions, and see where they intersect with your priorities.
MTPR can help you find candidates' policy views — we asked the major statewide and federal candidates for their positions on a few economic problems, and we’ll have those linked to this story on our website.
Bottom line, Corin, the economists I spoke with say being an informed “economic voter” takes more research than just listening to who the campaign ads are blaming for your grocery or property tax bills. Problems, priorities and policies — the three Ps are a good place to start.
Corin Cates-Carney: Thanks for the reporting and tips, Austin.
Austin Amestoy: Happy to do it.
