NewsWire: 4/12/22
- During the pandemic, “Americans fled cities… and went to red states.” In a WP op-ed, columnist Henry Olsen argues that high housing prices, taxes, and crime has been driving the exodus to GOP country. (The Washington Post)
- NH: Over the last couple of weeks, we have written about the new 2021 population estimates by the Census. And it caught our attention that many of the counties and metros with the largest population gains were in red states. And those with the largest losses were in blue states. (See “73% of US Counties Experienced Natural Decrease in 2021” and "Which Cities Grew the Most in 2021?")
- Now comes an op-ed by Henry Olsen arguing that economic factors drove Americans to migrate to GOP areas. The article mentions an analysis by Mark Perry, an economist at AEI. Perry compares 2021 economic indicators in two sets of states: those ten states with the largest out-migration in 2021 and those ten states with the largest in-migration in 2021. Let's look at these comparisons.
- We start with a list of the states themselves, color-coding them by their vote for the president in 2020: blue for those voting more for Biden than the national average; and red for those doing likewise for Trump.
- Not surprisingly, the top inbound states did not only lean to Trump in 2020; they were also predominantly GOP-controlled at the state level in 2021. Eight out of ten had Republican governors, and nine had Republican legislatures. Conversely, the majority of outbound states were controlled by Democrats.
- OK, let's shift to the personal tax burden and the cost of living. The top inbound states were significantly cheaper to live in. The average top individual income tax rate was much lower (3.8% vs. 8.0%). The median home price was about $80K cheaper. And the cost of electricity (cents per Kilowatt-hour) was 6.11¢ less.
- The inbound states were also more business-friendly. The average top corporate tax rate was much lower (4.1% vs. 8.3%). The average unemployment rate was lower by 1.7 percentage points. And all ten were right-to-work states--as were only two of the outbound states.
- To be sure, there's plenty not covered by these comparisons. Blue-zone partisans may complain that they leave many red-zone failures unmentioned--such as sub-par K-12 public education and social services. Red-zone partisans may reply that there are plenty of other blue-zone maladies still off the list--such as higher regulatory burdens and greater unfunded pension liabilities.
- Yet the basic argument that Henry Olsen and Mark Perry are making doesn't really rest on these particular policy comparisons. It simply rests on the assumption that Americans are already choosing which policy tradeoffs suit them best by voting with their feet. And in recent years that vote has been going to the red zone.
- Ninety years ago, Supreme Court Justice Louis Brandeis declared that "states are the laboratories of democracy." Different states try different things, and we learn which ones work best. Apparently, we're still learning.
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