As the 2016 presidential election season heats up, there are many candidates offering different opinions about the country and the direction it should go. It’s impossible to say at this point who will end up winning the election in 2016. It’s not even clear who the candidates for each party will be. But one thing is clear: The primary elections will be very competitive.
In fact, those primaries are shaping up to be so competitive that they will end up being very costly for the presidential candidates. And that is great news for people across the country. Despite how annoying election ads and phone calls are, campaigns also provide a substantial monetary stimulus to local economies and help boost people’s bank accounts. Here’s how:
PRESIDENTIAL CAMPAIGNS PROVIDE JOB OPPORTUNITIES
There are a number of mechanisms through which the 2016 primary elections can boost bank accounts, but first is the fact that every presidential candidate needs staffers. And the serious staffers, the ones who are actually running the campaign, get paid a lot of money. The top 10 highest-paid campaign staffers for both Barack Obama and Mitt Romney in 2012 all earned more than $100,000 each with some earning close to $200,000, reports The Washington Post.
Regarding staffers’ salaries, this year’s primaries are shaping up very similarly to the 2012 contest. Donald Trump, example, is paying his top staffer $20,000 a month, reports The Wall Street Journal. Fellow Republican presidential candidate Marco Rubio’s campaign manager tops the early salary list at $198,000 a year, reports Politico. Other campaign staffers who top the list include Hillary Clinton’s campaign manager, who earns $121,000 per year, and Bernie Sanders’ campaign manager, who earned about $118,000 per year.
But you don’t have to be a senior staffer to earn cash. If you’re looking for short-term employment, serving as a staffer on a campaign could be a great way to boost your income. Look for open positions on the presidential candidates’ websites. For example, Democratic candidate Sanders has various 2016 campaign job postings on his website, including digital intern, field coordinator and state organizing director roles.
In addition, the primary elections offer even more lucrative opportunities thanks to the rise of Super PACs. While there are more than a dozen presidential campaigns that a person could work for, there are nearly 100 Super PACs tied to the 2016 presidential candidates, according to OpenSecrets.org, and they might have job opportunities as we get closer to 2016.
CAMPAIGN ADVERTISING BOOSTS LOCAL ECONOMY
Of course, even people who don’t work on a presidential campaign still benefit from all of the spending. First of all, campaign staff still need to eat and stay in hotels as they travel, but beyond that the advertising that goes into the primary election is mind-boggling.
The startup costs for a single presidential campaign are around $10 million. After that, candidates need to be prepared to spend as much as $10 million in Iowa, $15 million in New Hampshire, $8 million in South Carolina and $7 million in Nevada, reports Fortune. And, CNBC reports that during the 2012 presidential election race, Obama’s and Romney’s teams spent a combined $10.14 per registered voter. Though you might not receive that money directly, it still ends up boosting the local economy. Indirectly, the money makes its way into your pockets through increased business activity.
Economics also suggests that presidential campaign spending has a bigger effect through an economic multiplier. The basic idea behind a multiplier is that since one person’s spending is another’s income, the net effect of $100 spent ends up being more than $100 as it flows through the economy. The concept is well accepted among economists, and a reasonable estimate of 1.7 suggests that if roughly 12 serious presidential campaigns each spend about $10 per voter, that should generate about $204 per person in total economic benefits early in the 2016 primary election.
THE PRIMARIES CAN IMPACT THE STOCK MARKET
“Over the past century, which party occupies the White House has had no discernible or consistent impact on U.S. equity markets,” wrote Russ Koesterich, BlackRock’s global chief investment strategist. Nonetheless, the 2016 presidential election can still affect the stock market.
Investment firm T. Rowe Price found that “presidential election years have generally coincided with favorable markets, particularly when the incumbent party wins.” And, an S&P Capital IQ report found that since 1948, the S&P 500-stock index rose during 11 Republican conventions, reports MarketWatch. The rationale for these rising markets is that investors liked what they heard coming out of the convention and incorporated that information into stock prices.
Goldman Sachs found that presidential elections help explain a lot of what is going on in the stock market during election years, reports Business Insider. This view is consistent with the research done by a number of professional economists who find that the elections matter to investment returns over time.
Of course, there is no way to be sure whether stocks will go up or down based on the 2016 primary elections. But, investors should pay attention to the candidates, what they’re saying and what polls are suggesting has a good chance of moving on to the general election. Unlike the broader economic benefit for the campaign itself, which is clearly good for the economy, primaries themselves can be either good or bad when it comes to the stock market.
Whether it’s a lucrative weekend job with a campaign, investing in a new stock based on something a candidate said or just keeping a hospitality business open a little later at night to cater to election season tourism, the primary elections can be an economic boon to those who choose to be involved.