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GOP-Governed and Right-To-Work States Saved the Economy’s Bacon in 2011

Blue and union-dominated states were mostly mediocre, or worse. Indiana has noticed.

by
Tom Blumer

Bio

January 30, 2012 - 12:07 am
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The government’s State and Local Employment and Unemployment report for December released on Tuesday showed that many red states, including most of the “newly-reds” where Republican governors replaced or succeeded Democrats after the 2010 elections, made meaningful progress in job growth and unemployment rate reduction last year. Many blue states didn’t do nearly as well. 2011 again saw right-to-work states significantly outperform those which are not.

Let’s start with the four states where the unemployment rate increased. The worst performer by far was Illinois (all amounts and rates in this column are seasonally adjusted):

Bottom4StatesUnempRateChanges2012

The unemployment rate in President Barack Obama’s home state, which began 2011 below that of nearby Indiana, Missouri, Kentucky, Ohio, and Michigan, ended the year higher than each — yes, even higher than Michigan, the previous decade’s basket case. Illinois only gained 8,000 jobs during the year’s final ten months after gaining 45,000 during the first two.

Who besides entrenched public-sector union-beholden tax-and-spend Democrats didn’t see this coming? In January, the state increased its personal and corporate tax rates by 66% and 45%, respectively; yet its bond rating, recently downgraded, is the nation’s worst. Despite increased tax collections, Illinois continues to be chronically late in paying billions of dollars owed to vendors and medical providers. Promised public-sector union givebacks have been trivial.

Mississippi appears to have been more hurt by the fallout from the BP Gulf oil spill than its neighbors, while Hawaii’s unemployment rate is still pretty low and was at least accompanied by half-decent job growth. That isn’t true of North Carolina, whose puny job growth and stagnant unemployment rate indicate that Democratic Governor Beverly Perdue, who on Thursday announced that she will not run for reelection, didn’t do much in 2011 besides make national news for suggesting that this year’s congressional elections should be suspended.

Now let’s look at the largest unemployment-rate reductions:

FiveBiggestStateUnempRateDdrops2011.png

The top four states listed have Republican governors. Nevada’s comedown beats going in the other direction, but job growth was pathetic, and there is obviously much need for improvement (that the Silver State’s legislature is Democrat-dominated doesn’t help). Newly-reds Michigan and Florida, whose governors are in long-term cleanup mode following the walking, talking disasters known as Jennifer Granholm and Charlie Crist, respectively, saw nice job growth in addition to their rate reductions. Newly-red New Mexico’s 23% rate drop (2.0% divided by 8.6%) was the largest in the country.

Having already noted Nevada, let’s address the other two of the three states with the highest year-end unemployment rates:

ThreeHighestStateUnempRates1211

Democrat-dominated California, whose residents are already among America’s most heavily taxed, where the business tax climate is third-worst in the nation, and where overpaid public-sector unions run rampant, made some progress in 2011. But Governor Jerry Brown, who has placed tax increases on this November’s ballot and is ramping up already out-of-control regulation, seems hell-bent on ruining any future prospects for improvement. Rhode Island’s fiscal situation became so perilous last year that in November it finally enacted meaningful public-sector pension reform. Here’s hoping they can make what some are calling “The Rhode Island Miracle” stick.

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