While economic recovery from the COVID-19 shutdowns picks up steam, it’s been significantly slower in blue states than red ones. The jobs are coming back, but the workers aren’t. The straightforward reason: Big government policies have again stifled progress.
Wealthy Democrat-heavy states like California, Connecticut and New York remain over 8%, much higher than Republican-led ones, such as Nebraska, South Dakota and Utah, all of which are under 3%. Of the top 10 states with the best job rates, nine have Republican governors. Why such a discrepancy?
For one, Republican governors rolled back restrictions on the economy much faster than their liberal counterparts. The unemployment rates across states mostly correlate with the length of pandemic lockdowns their governments imposed.
The American Institute for Economic Research’s Dan Mitchell, who’s covered New York’s monetary misery, found “a clear relationship between joblessness and the degree to which states pursue big-government policies.”
This is undoubtedly a major driver behind the differing unemployment rates. The only Democrat-controlled state in the 10 states with the best unemployment rates is Wisconsin, where the state Supreme Court nullified Gov. Tony Evers’ overbearing lockdown measures.
To make matters even worse, injurious regulations didn’t lead to better COVID-19 outcomes, despite their grave economic costs.
When congressional Democrats rushed through trillions in “COVID-relief” emergency spending in March, it created an additional welfare system that paid many people more money not to work.
The average beneficiary is making over $17 an hour, and even more in high-benefit states. This discourages Americans from returning to jobs, including well-paying ones, which leads to labor shortages and a labor force participation rate that won’t rise.
Republican states like Mississippi, Montana, South Carolina and Texas began responsibly rejecting the federal welfare expansion en masse, restoring economic sanity to their states’ safety nets.
With blue states like Massachusetts and Minnesota stubbornly giving benefits until at least September, the unemployment discrepancy will undeniably amplify.
Understandably, states have rivalries, and red and blue “teams” are prominent, but the entire country’s economy must recover fully from the pandemic. An unequal recovery in red and blue states need not be a partisan victory to celebrate, though it’s still instructive to explain how collectivist policy is the culprit.