Blue states vs. Red states: It is more than cultural; it is economic

16 Feb 2017 2:59 PM | Mike Lillich (Administrator)

By Oren Levin-Waldman


First published online in the Yonkers Tribune


Something strange happened on the way to the 2016 presidential election. Many states that previously voted blue — Democratic — flipped and voted red — Republican. And yet the demographics of blue states and red states are quite revealing. On the face of it, it would appear that more workers in red states tend to be less educated and/or skilled, and are in occupations and industries that have perhaps been left behind by the forces of globalism.

I

t is already understood that President Trump won mostly white blue collar voters in fly-over states. Many of these states in what is often referred to as the rust-belt were once home to a thriving manufacturing base. Promises that manufacturing could be lured back certainly resonated with these voters. Though it would be convenient to suggest vast cultural differences between blue states and red states, many of the differences are demographic.


In 2015 blue states had higher rates of income inequality than did red states. Educational attainment in blue states was also higher. Although red states had a higher percentage of workers that attained less than a 12th grade education than did blue states, they also had 5.8 percent more high school graduates and 6.0 percent more people with associates degrees than did blue states. But blue states had 5.4 percent more people with a B.A. degree than did red states and 33.5 percent more people with graduate and professional degrees.


The greater number of people in blue states with higher education would appear to explain why there may be greater inequality in blue states. It is certainly consistent with the neoclassical argument that rising income inequality is due to technical change biased towards those possessing skills. But industrial and occupational compositions suggest that blue states would indeed require more skilled workers. And to the extent that the old manufacturing base is being replaced by industries and occupations requiring greater skills, it would certainly explain a large portion of the electorate feeling left behind in today’s global economy.


In terms of occupations, blue states had 23.2 percent more people employed in Professional and Technical occupations and 17.2 percent employed as Managers, Officials, and Proprietors. Red states, however, had 15.4 percent more people employed as craftsmen, 15.9 percent more people employed as operatives and 15.8 percent more people employed as laborers than did red states.


In terms of industries, red states had 30.8 percent more people in Agriculture, Forestry, Fishing and 900 percent more people in mining than did blue states. Red states also had 16.1 percent more people in construction than did blue states. Blue states, however, had 17.9 percent more people working in Finance, Insurance, Real Estate, 40 percent more in Entertainment and Recreation Services, and 12.9 percent more in Professional and Related industries than did red states.


On one level it would appear that red states had more people employed in rural type industries and occupations, while blue states had more people employed in urban type industries and occupations. On another level, however, it is clear that blue states have more people in higher paying industries and industries perhaps requiring more skills. In other words, it might be possible to conclude that Democratic politicians arguing for open borders and more investment into training programs were merely speaking to their base whom they assume are in many respects already adjusted to the realities of a global economy.


It is also worth noting that there is actually more poverty in red states than in blue states. Red states had 6.7 percent more people receiving food stamps than did blue states, and 17.9 percent more people living below the poverty level. On the other hand, despite low levels of union membership generally, blue states had 100 percent more union members than did red states. High unionization in blue states is certainly no surprise. Many red states, particularly in the deep South, are right-to-work states which prohibit closed shops, thereby making unionization more difficult.


Still, these demographics reveal serious differences between blue and red states that go beyond the standard liberal-conservative divide. The economic bases are still different, and perhaps not in ways dissimilar to differences that existed between the industrial North and the agrarian South prior to the New Deal. New Deal planners in the 1930s sought to modernize the Southern economy that was seen as lagging behind the North. Workers earned less and were less educated. Then a national minimum wage was seen as a needed step in the economic development of the South. Southern states, of course, resisted, all federal policies because they were seen as interfering with their way of life.


There is no question that globalization is destroying a familiar life style for many. To flippantly dismiss the economic hardship and dispossession of those in the red states as simply not understanding the essential ingredients for progress really isn’t helpful. There is no easy answer here. And if truth be told, candidates for national office don’t really need to hire opinion pollsters; they need to study these types of demographics to understand the mood of today’s voter. Had the Democrats done that, they probably would have won.


Are there solutions that we can glean from any of this? Labor economists who have long argued that there is a high school premium, and that because fewer people have been graduating high school over the last few decades, will no doubt argue for more investment in education and training programs. But as I have said in this space many times before, we still need a rebuilding of our labor market institutions. To invest in education and skills training — to invest in human capital — takes time. Workers need immediate relief.


In the meantime, the work that they are left with needs to be accorded greater dignity. This can only come about through measures to lift their wages. It was unions that gave dignity to otherwise low-skilled factory work during the late Nineteenth and early Twentieth centuries. And it is unions that can confer dignity on low-skilled service work, even if it means organizing workers on an industry-wide basis rather than a firm-wide basis. And for those not covered by unions, they need to have higher minimum wages.


Of course, given the interdependence in the economy, the greater demand for goods and services in the economy spurred by greater purchasing power, particularly for those at the bottom, will spur growth and perhaps lead to the opening of new manufacturing enterprises here in the U.S. Granted that voters in red states may not have understood economics, but they certainly understood that nobody had been listening to them and taking their plight seriously.


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