Latest economic data show red states crushing blue states — and here’s why

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The good news is our economic recovery from the pandemic is finally underway. The bad news is that it’s going a lot slower in blue states than red states — thanks to foolish big-government policies.

This is the inescapable conclusion revealed by the latest jobs and unemployment data.

“The unemployment rate in April nationwide was 6.1%, but this obscures giant variations in the states,” the Wall Street Journal reports. “With some exceptions, those run by Democrats such as California (8.3%) and New York (8.2%) continued to suffer significantly higher unemployment than those led by Republicans such as South Dakota (2.8%) and Montana (3.7%).”

The difference really is unusually glaring. Of the top 10 states with the lowest unemployment rates in April, nine have Republican governors. What’s behind this destructive discrepancy?

Economist Dan Mitchell looked at these figures and concluded that there’s “a clear relationship between joblessness and the degree to which states pursue big-government policies.”

In particular, the unemployment rates different states are experiencing are strongly correlated with the harshness and length of the pandemic lockdowns their state governments imposed. With a few exceptions, Republican governors rolled back restrictions on the economy much faster than their Democratic counterparts.

This is clearly one of the major drivers behind the differing unemployment rates. In fact, the Wall Street Journal notes that the only Democratic-controlled state in the 10 states with the best unemployment rates is Wisconsin, where the state Supreme Court forcibly nullified the governor’s overzealous lockdown measures. This trend in lockdown-state-versus-free-state unemployment can be traced back through February.

To make matters even worse, these sweeping regulations didn’t clearly correspond with better COVID-19 outcomes — despite their drastic economic costs.

There’s one other major policy factor that is likely contributing to the discrepancy.

When Congress rushed through trillions in wasteful and fraud-rife “COVID-relief” emergency spending, it created a broken unemployment welfare system that pays most unemployed people more not to work. The average beneficiary is making the equivalent of $17.13 an hour on benefits. (Many in high-benefit states such as Massachusetts are earning even more!)

This is creating a clear work disincentive, discouraging people from returning even to well-paying $15 an hour jobs — simultaneously giving birth to the dysfunctional twins of a labor shortage and high unemployment levels.

However, Republican-led states such as Texas have started rejecting the federal welfare expansion en masse, restoring economic sanity to their states’ safety nets. With blue states likely to cling to the benefits until they (hopefully) expire in September, this difference will surely exacerbate the unemployment discrepancy.

We should all want to see the entire country recover quickly and fully from the pandemic’s economic fallout. So, the unequal recovery in red and blue states is not a partisan victory to celebrate. It’s a tragedy. But it’s one where foolish progressive policy is directly to blame.

Brad Polumbo (@Brad_Polumbo) is a Washington Examiner contributor and host of the Breaking Boundaries podcast.





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