Job-Creation Gap Widens Economic Red State-Blue State Divide
The U.S. isn’t just politically divided -- it’s also economically divided.
New research says the two go hand-in-glove together.
There are the haves and the have-nots. Increasingly, the red states, which tend to vote Republican, are trailing far behind the blue states, which tend to vote Democrat, according to a recently published study. Worse still, the divide is getting wider.
This economic chasm helps explain president Trump’s rise to power, and why he could hold on to it longer than his detractors think possible.
“Generally, red states or the red areas of the country are lagging blue areas for employment even as the overall economy improves,” says Greg Basile, senior research analyst at the Washington, D.C.-based Institute of International Finance (IIF).
In other words, those record-low unemployment levels haven’t benefited all areas of the country equally.
Basile, along with colleagues at IIF, analyzed data on employment trends in the U.S. and combined the information with which way the population voted.
This is the second time that IIF has conducted the analysis. The first came last year. But this time, instead of just looking at the data from each state, the team dug far further into the weeds.
The analysts wanted a “cleaner representation of the red versus blue divide,” and so identified urban areas in red states that tended to have Democrat leanings. Such blue-leaning metropolitan areas in red states include Dallas and Philadelphia. (There aren't any red-leaning cities in blue-leaning states, the report states.)
In the simplest terms, the second-take analysis focused on the economic differences between urban and rural areas.
The results showed an even wider economic split than did the first take of the analysis.
“We find that the red-blue divide is more pronounced than in our first-pass analysis, with the employment-to-population gap even wider than we had first estimated,” states the IIF report "The Red-Blue Labor Market Split."
“There is no sign that the labor market, which is so buoyant at the national level, is helping to heal this divide. If anything, the divide is growing.”
Put another way, the urban-rural economic rift is even larger than the state-by-state difference.
It seems that the matter comes down to where various industries are located.
“The tribal political divisions of red versus blue is perhaps better understood as an intensification of the digital divide,” says Joe Brusuelas, chief economist at professional services firm RSM. He explains that the fast-growing technology industry and related business sectors show better productivity and higher wages.
In other words, the new economy (medical sciences, information technology, etc.) is boosting the blue areas of the country but not the red ones, which still rely heavily on traditional manufacturing or agriculture.