September 16, 2007

Where Did the Good Times Go?

Justin Katz

That question usually implies that the good times have disappeared, but if by "good times" one means "strong economic growth," Greg Kaza would argue that the good times have gone to the Red states:

Political pundits identify 18 bona-fide Blue states, which backed Democrats Al Gore in 2000 and John Kerry in 2004, and 29 clear-cut Red states, which supported Republican President George W. Bush both times out. Blue states are said to be "liberal," and Red states "conservative." But there might be another reason to term certain states "blue": weak employment growth in a period of expansion.

Total Blue-state employment growth has been only 3.3 percent during the current expansion, which began in November 2001, compared with the U.S. rate of 5.5 percent. Meanwhile, total Red-state employment growth has been 7.5 percent, more than double that of the Blue states.

It seems to me that Blue state provincialists have two directions in which to head, if they wish to improve their economic lot in comparison with those on the other side of the primary-color aisle: begin to let go of some of the cherished, but faulty, economic ideas and policy approaches that overwhelm their natural advantages, or attempt to force competing states to play by the same burdensome rules. Somehow, I don't suspect we'll be left in suspense as to their choice.

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FWIW, organized labor is starting to make a strong push to organize government employees in the Sunbelt - particular the South and its "right to work" states ("right to work" meaning states in which individual workers can't be forced to join the union or lose their job ... as you'd expect, RI isn't a "right to work" state and that is one of the reasons why sane companies are "reluctant" to locate here).

If successful, the intent will be to use the unionized public employees and their dues money as a wedge to "persuade" politicians there to make those states more "union friendly" - repeal "right to work," start more "social programs" that require the hiring more unionized government employees, etc. etc. In other words, insert the same type of dysfunction we have in RI into those states.

The net effect, if organized labor is successful, will be to derail the economic growth engine that the Sunbelt states have enjoyed in recent decades (thanks to right to work and low taxes).

No doubt their also calculating that a workforce of more and more employees living off of the government teat will render those states more "blue."

In other words, they'll use the taxpayers dollars to work against the interest of taxpayers, so those states too can "enjoy" the same kind of bad roads, bad schools, lethargic economy and a mob / union / Democrat Party axis of corruption that we have here in RI.

Posted by: Tom W at September 16, 2007 5:28 PM

Now Tom, shouldn't you be rooting for union success in the South to level the playing field for the North?

Posted by: Bob Walsh at September 16, 2007 6:02 PM

Sorry, Bob, but I just can't resist observing your application of the union mentality to regional economic differences: We all ought to be sufficiently bitter and provincial to level the playing field at our height, rather than striving to climb up to theirs. Negotiated mediocrity, the savior of those who refuse to believe that competition will always rear its head.

Posted by: Justin Katz at September 16, 2007 6:09 PM


Remember, these states recruit companies that are pleased to pay lower wages and lesser benefits to workers, so to compete, we would need to sink to their depths, not climb to their heights. Henry Ford was no friend of labor, but even he figured out that if you do not pay your workers enough to buy the products they produce, you are doomed to failure.

If we had no "right to work" states, the Northeast would still dominate on productivty alone, trumping energy and infrastucture costs (which still need to be addressed)

Posted by: Bob Walsh at September 16, 2007 7:00 PM

Well, this is an interesting story, but I think you'd need to see a lot more statistics about these states, and the trends there, before you can really explain what this all means.

And by the way, I am one of those who believes that Bush really did win Florida in 2000, but does it really make sense to lump Florida in as a red state in the same category as Wyoming or Texas, where Bush won by huge margins?

Fun with statistics, I guess . . .

Posted by: brassband at September 16, 2007 7:41 PM

>>Now Tom, shouldn't you be rooting for union success in the South to level the playing field for the North?

So that the exodus of jobs and wealth to Asia can be accelerated?

No thanks.

So that there's no (relatively) low tax refuge in which I can establish residency once I (hopefully) retire and escape RI?

No thanks.

So that the Electoral College gets irretrievably shifted into the Democrat column, and this country ends up like France with its extraordinarily high taxes and permanent double digit unemployment rates and pervasive public sector union strikes?

No thanks.

Posted by: Tom W at September 16, 2007 7:44 PM

Wow. This displays an almost complete lack of understanding of basic arithmetic. Do you really not get it, or are you deliberately smudging the implications?

If I make a dollar and get a 5% raise, I'll get an extra nickel.

If I make ten dollars and get a 2% raise, I'll get and extra 20 cents.

Which would you prefer?

All this means is that the red states are starting from a much lower rate of employment. Sure you want to brag about that?

IOW: if you start from a lower level, it's easier to make a large jump in terms of percentage.

Posted by: klaus at September 29, 2007 3:25 PM

Be others' mathematical skills what they may, Klaus, your logic leaves something to be desired. Just because one side's percentage growth is higher doesn't mean that its actual numbers are proportionately lower.

The median labor force for the red states in November 2001 (Kaza's starting point) was 2,833,400; for the blue states, 2,916,350. That's hardly one dollar versus 10. Moreover, for August 2007, the medians were 3,029,900 (red) versus 3,023,600 (blue).

There are certainly legitimate points to be made against Kaza's analysis, but I suspect you're too keen to bask in your own arrogance to think them through.

Posted by: Justin Katz at September 29, 2007 10:50 PM
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