Economic issues will shape the midterm election

One issue has risen above all others in Tuesday’s midterm election: the economy.

Soaring prices at the pump, at the grocery store, in the housing market and on electric bills have stretched families thin. Inflation is outpacing wage growth, and consumer confidence sits near record lows.

Polls consistently show these problems are top of mind for voters. It is the job of candidates to offer solutions, with evidence to back up their claims.

But in today’s hyperpartisan quest for clicks and viral moments, that’s not always what happens.

So this month, I wanted to review what the data tells us about some key economic questions that will shape this election.

Are tariffs making things more expensive?

In July, we examined the impact of the Trump administration’s tariff policy since “Liberation Day” in 2025, which levied new taxes on most imported products while sparking retaliation against American farmers and manufacturers seeking to export products to global markets.

The data showed tariffs increased costs for the average Illinois household by $2,200, shrunk the economy by $5 billion, and eliminated 7,500 manufacturing jobs.

Did DOGE cuts and the “One Big, Beautiful Bill” hurt Illinois?

Last December, we found that federal policy changes from the “One Big Beautiful Bill Act” and Department of Government Efficiency (DOGE) efforts will cost Illinois $8 billion annually by 2029, eliminate 86,000 jobs, and shrink the state's economy by $10 billion.

This includes 400,000 residents losing their healthcare coverage, another 216,000 losing access to food aid, and the loss of billions of dollars in federal funding for energy and infrastructure projects, public health programs, and public schools.

The data underscore a larger economic reality: Policies enacted in Washington can often have measurable consequences here at home. Look no further than the surge in gas, diesel, and fertilizer prices since the onset of war with Iran.

But not every economic outcome is dictated at the national level.

Does Illinois face a housing shortage?

In a recent report, we found that Illinois faces a shortage of 142,000 homes and needs to build 45,000 homes annually over five years to address existing shortages and accommodate future demand.

Limited inventory, higher financing costs, and restrictive zoning laws have placed homeownership increasingly out of reach, particularly for younger families.

Should taxes be raised on incomes over $1 million?

To reduce property tax burdens and invest in public schools, several municipalities are considering non-binding measures to assess support for raising taxes on high-income earners.

Our 2026 report found that a proposed Constitutional Amendment to tax annual net income over $1 million could either fund $1,500 rebates to 3 million homeowners — cutting local property taxes by 20% — or fully fund public schools. Importantly, it showed that states with similar “millionaires' taxes” have experienced comparable economic growth to states without them.

Are data centers worth the cost?

In an October report, we concluded that $57 billion in planned data center development in Illinois could create more than 120,000 total jobs, with most in nonconstruction positions, while creating a substantial boost to both the economy and local property tax revenues.

However, we also showed how standards and guardrails can ensure that data centers cover their energy and infrastructure costs while minimizing their water usage. The challenge for policymakers will be to ensure developments are built responsibly and add value to communities without shifting costs onto homeowners, small businesses, and consumers.

Overall, the data shows that solutions for the top-of-mind economic concerns driving this election will not be found in political partisanship — but rather in sound policy.

We see economic anxiety at every gas pump, checkout counter, and job site. Voters expect solutions, with evidence they can evaluate for themselves. Which candidates are offering pathways to lower costs and more good-paying jobs? Who is championing responsible development and the kind of investments we can see in our communities and feel in our wallets?

Tuesday is a time to demand real answers, not just easy answers. So no matter who you vote for, make sure your voice is heard.

Frank Manzo is an economist at the nonpartisan Illinois Economic Policy Institute.