Red states see far faster post-COVID economic recovery than blue states


Red states including Florida see far faster post-COVID economic recovery and have more people in work than before the start of the pandemic, as blue rivals flounder

  • A Moody’s Analytics study shows that Republican-led states are adding far more jobs than their Democratic counterparts
  • One reason for red state revival is migration, with millions ditching blue states  during the Covid-19 pandemic 
  • Florida, which saw the most Covid-19 migrants, recorded a budget surplus of $20 billion for the year with some of that money going to raising teacher salaries
  • Over in Texas, cities are more than 50% office space occupancy meanwhile in San Francisco and Los Angeles, more than 60% of offices are empty 

Republican-led states are continuing to outperform their Democrat rivals economically, and now have more people in work than there were before COVID.

Analysis by Mood’s found that red states – those that have voted for a GOP president in the last two elections – are up 341,000 jobs in total, compared to February 2020.

But it was a different story in blue states, which are still collectively 1.3 million workers down on totals taken just before the pandemic began two-and-a-half years ago.  

According to a Moody’s Analytics study, 11 of the top 15 states for economic output, employment, retail sales and new home listings are Republican, with Florida leading the way. 

On the other hand, eight of the bottom ten are Democratic run states. 

A major reason for the shift is the mass migration of the US workforce that occurred during the pandemic, reports the Wall Street Journal. Between February 2021 and February 2022, 46 million Americans moved, the most in a year since 2010. 

GOP presidential hopeful Ron DeSantis will likely be pointing Florida's amazing economic recovery post Covid-19 when primary season kicks in

GOP presidential hopeful Ron DeSantis will likely be pointing Florida’s amazing economic recovery post Covid-19 when primary season kicks in 

California Governor Gavin Newsom has overseen some of the most draconian Covid-19 restrictions over the past two years

California Governor Gavin Newsom has overseen some of the most draconian Covid-19 restrictions over the past two years 

In many cases, this was the result of remote work allowing Americans to seek out cheaper housing and a better quality of life in states away from the pricier coastal areas.

Others likely fled to GOP-led states because of their lighter or non-existent lockdown measures, with school and business closures angering millions of Americans 

The states that saw the most new residents are Florida, Texas and North Carolina, all three of which went for ex-President Donald Trump in the 2020 election. The states that lost the most taxpayers, California, New York and Illinois, all went for Biden. 

In addition to being Republican, all of the states that gained residents were also states with fewer Covid-19 restrictions, with Florida being the primary example.

The seven states that never issued work from home orders, Arkansas, Iowa, Nebraska, North Dakota, South Dakota, Wyoming and Utah, all have Republican governors. 

Politico reported in June 2021, that the states with the highest levels of unemployment, California, Connecticut and Hawaii, all still had Covid restrictions in place. 

At the same time, states that had least eased their restrictions, Montana, New Hampshire, Arkansas, South Dakota, Utah, Missouri and Nebraska, which are all red states, were recording pre-pandemic levels of economic activity. 

During this period, the sluggish economies of blue states such as California, New York and Hawaii, could be partly attributed to a lack of tourism. 

Whereas states such as Utah and Nebraska count food processing and manufacturing as their most profitable industries, both were sorely needed during the pandemic. 

By the end of 2021, the states experiencing the highest rates of of Covid-19 related deaths were red and the lowest were blue. 

But California witnessed similar trends to Florida, and debate continues over whether lockdowns and mask mandates actually made much difference.  

Cape Coral, Florida, was one of the most popular destinations for those who left the US's bigger cities during the Covid-19 pandemic

Cape Coral, Florida, was one of the most popular destinations for those who left the US’s bigger cities during the Covid-19 pandemic

The ability to work from home as a result of Covid is also thought to be a major motivating factor in encouraging people to move. 

The Journal notes in their reporting that the long term migration effects of the Supreme Court’s decision to overturn Roe v Wade remains to be seen. 

On May 20, Florida Governor Ron DeSantis announced that his state will record its record budget surplus of over $20 billion for the financial year ending June 30. 

The potential 2024 GOP presidential candidate said in announcing the surplus: ‘By keeping our economy open, maintaining a low tax environment, and being fiscally responsible, Florida’s budget reserves have never been stronger.’

He continued: ‘While Washington, D.C., has consistently gotten things wrong, Florida has consistently done things right.’ 

The governor’s office says that some of the surplus will be used to raise teacher salaries and to improves schools in the state. 

Much of it will also be held to tide Floridians over during the next economic downturn.  

Arkansas, a thoroughly Republican state, recorded a surplus of $1.6 billion for the most recent financial year, a new record. The previous record was set in 2020 when it was $946 million. 

The last time Arkansas voted blue in a presidential election was when its native son, Bill Clinton, ran for reelection in 1996.  

Another sign of robust economic recover is in Texas where cities such as Houston and Austin have seen more than 50% office space occupancy. 

On the other hand, 60% of office space in each of Los Angeles, San Francisco and San Jose remains unoccupied. 

The Wall Street Journal goes on to note that the states that gained the most residents have lower income tax rates than those who lost residents. 

In April 2022, Tennessee, a red state, recorded its all-time lowest unemployment rate of 3.2% while the economy rose by 8.6% in 2021. The state’s Republican Governor Bill Lee is raising teacher pay, hiring more law enforcement and freezing tuition at state colleges. 

For the second year in a row, Arkansas is posting a record budget surplus. The state hasn't voted for a Democrat as president since Bill Clinton's reelection in 1996

For the second year in a row, Arkansas is posting a record budget surplus. The state hasn’t voted for a Democrat as president since Bill Clinton’s reelection in 1996

In total, 12 states with Republican legislatures reported record-low unemployment, according to the US Bureau of Labor Statistics.  

Those statistics says that nine states, Arizona, Arkansas, Florida, Georgia, Idaho, Montana, Tennessee, Texas and Utah, are recording having more jobs that than pre-pandemic. 

The same release showed that through March 2022, nine of the top 10 states for jobs recovered since the coronavirus pandemic began are led by Republican governors, and all 10 states have Republican-controlled legislatures. 

An example of a state economy under stress comes from New York, where with $1.4 billion for child care promised, the New York Times reported that the Democratic lawmakers were concerned about paying for their pledge without federal assistance. 

A Redfin study found that Cape Coral, Florida, was one of the most popular destinations for those who moved during the pandemic.

The city’s population has risen nearly 10% in 2021 and 2022 with the majority of migrants coming from Chicago.

San Francisco that lost the most residents of any city during the pandemic, according to the study. The majority of those who left the city stayed in California, settling in the Sacramento-area.

While Los Angeles lost more than 50,000 residents, with the majority relocating to San Diego.

New York City lost 80,000 residents with the most settling in Miami.

Source

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