Red State Rising

Richard Florida is a urban theorist, famous for his book “The Rise of the Creative Class”. The book argues that since liberal cities with a large concentration of high-tech industries such as San Francisco and Boston have plenty of street musicians and gay bars, street musicians and gay bars must be causing the high-tech sector.

Because of its politically correct message, the book is popular among politicians and in the media. But due to the unsubstantiated claims of causality and shaky statistical evidence, it is not very well respected among economists. Harvard professor Edward Glaser reviewed Florida’s statistical analysis, and found that Florida’s correlations vanish or even reverse signs once you simply take the level of education in a city into account.

Richard Florida is back with an attack on conservative America in The Atlantic. He writes:

“Conservatism, more and more, is the ideology of the economically left behind. The current economic crisis only appears to have deepened conservatism’s hold on America’s states.”…” American politics is increasingly disconnected from its economic engine [liberal states]. And this deepening political divide has become perhaps the biggest bottleneck on the road to long-run prosperity.”

Is conservatism the ideology of losers? Is the Republican Party the party of those who cannot make it on their own in the marketplace, and are hence bitter? Are liberal states the “economic engine” of America?

Well, let us start with the fact that a “state” doesn’t take an ideological position, individuals do. Although rich states tend to vote Democrat, within states the richer you the more likely you are to vote Republican. So while Mississippi is poor, the poorest groups in Mississippi are Democrats. This is true for whites as well as minorities. This paradox been established by Columbia University’s Andrew Gelman (whom Florida cites, so he can’t be unaware of it).

Overall, the within state tendency of the economically successful to vote Republican is far stronger than the between state tendency of rich states to vote Democrat. In the United States, it is still true that the economically successful are more likely to vote for free-enterprise Republican and the unsuccessful to vote for welfare-state Democrats.

In 2008 in Georgia 70% of the voters who earned less than $30.000 voted for Obama, whereas only 40% of Georgia voters who earn more than $100.000 voted for Obama. The affluent in Georgia are Republican, whilst Democrat voters are those who are dragging down the state average. In Mississippi 66% voters who earned less than $30.000 voted for Obama, compared to only 23% of high income voters.

In poor white West Virginia, Obama got 62% of those making less than $30.000 but just 39% of those making more than $100.000. In other words, those WV Appalachian “Rednecks” that the media loves to demonize and portray as Republicans on closer observation turn out to vote Democrat. I could go on, the pattern is the same across all Red Stats.

This paradox that poor states vote Republican while poor Americans vote Democrat may be too subtle to understand for journalists, foreigners and causal observers of politics. We should however expect a professor writing in the Atlantic to make the effort. But of course we know why he didn’t. The liberal audience of the Atlantic likes to be told that they belong to the party of wealth and success, while Republican voters are losers. Why spoil a good story with facts?

Let’s go from states to the national averages. This is how individuals voted in 2010.

Of American voters who earn less than $30.000 per year 40% voted Republican, and the rest for Democrats.

Of Americans voters who earn more than $200.000 per year 64% voted Republican!

Does the Atlantic seriously want to claim that people who makes more than 200k per year are “economically left behind”?

None of this is really new, although Professor Florida apparently needs the reminder. Let’s more forward to Florida’s claim that liberal areas are the “economic engine” of America.

Red States, by which are mean states that voted for Bush in 2004, are on average poorer than Blue states, mainly due to having more poor Democrats.

However, during the last few decades the less regulated and taxed Red States have had faster growth than Blue states. According to the Bureau of Economic Analyses Regional Economic Accounts Between 1970 and 2010, real output increased by an average of 3.4% per year in Red States compared to 2.6% per year in Blue States. The real per capita growth rate of personal income in the Red States was 2.0% per year, compared to 1.8% per year in Blue States.

The graph below shows the convergence of per capita income. Note that this does not adjust for the cost of living, which is lower in Red States. One reason Red States have been growing faster is that they started at lower levels and are converging. Another likely explanation is pro-growth economic policies.

Job numbers in Republican states are even more impressive. Red States have been creating far more new jobs than Blue States. Part of this is that Red States have had enjoyed a better economic climate and consequently have been attracting more people over this period. Americans are voting with their feat, leaving Blue States for Red States.

The most striking number is that between 1990 and 2009 the Red half of America created 24 million new jobs, compared to only 12 million new jobs in Blue States. This means that Red States created two thirds of all new jobs in the United States between 1990 and 2009. These are the very states which Richard Florida claimed were increasingly falling behind. The Blue States, which Florida calls the “economic engine” of the United States, not only had lower income growth, but only added half as many new jobs as Red States.

Richard Florida’s claims in the Atlantic may confirm liberal stereotypes, but have little support in economic data.

Comments are closed.