A “Millennial View” on Red States, Blue States

A “Millennial View” on Red States, Blue States

I’ve often been reminded that you can easily figure out what you really want by examining the choices you tend to make. In economics class, this was called “revealed preferences.”

 

There has been a lot of discussion recently about what some Americans are revealing by moving between states. Politicians ought to take note.

 

Stephen Moore wrote in the Washington Times on September 27[1] that 2014 Census data shows that the biggest increases in in-migration were in these red states: North Dakota, Nevada, South Carolina, Colorado, Florida, Arizona, and Texas. The biggest losers were Alaska, New York, Illinois, Connecticut, New Mexico, New Jersey, and Kansas.

 

In case you think it might be a fluke, a broader study called “Rich States, Poor States” found that on average, 1000 people PER DAY are moving from blue states to red.

 

And finally, the data is confirmed by the IRS, which recently saw Texas and Florida gain new income (from in-migrants) over $5B each in just a year, while New York and Illinois each lost over $3B.

 

The interpretation of the data was this: states with lower income taxes, right to work laws, lower minimum wages, and in general fewer restrictions on business and personal prosperity are in general more attractive to the average middle class person who pays taxes. They see a better chance of saving for their futures in a place that makes it easier to do so – not just because they can keep more of what they earn, but because the job prospects are better in a place that is friendlier to business. Indeed, a CNBC study found that red states had an advantage not only in job creation, but also personal income growth, since the Great Recession.[2]

 

And in turn, this migration is only set to increase red state prosperity. Think about it; as Glenn Reynolds said in a recent USA Today column, “states with high benefits will accumulate more people who draw on them, while shedding the taxpayers they need to support them…. High-tax, high-benefit states will eventually go bankrupt because they won’t retain enough taxpayers to support their welfare spending.”[3]

 

To keep up economic growth, you need to be attractive as a state to people who will productively contribute to the economy. Until blue states learn that, people will keep voting with their feet.

 

Molly M., Olney, MD

[1] http://www.washingtontimes.com/news/2015/sep/27/stephen-moore-migration-changing-economy-of-us-sou/

[2] http://www.cnbc.com/2015/08/13/are-red-or-blue-states-better-job-creators.html

[3] http://www.usatoday.com/story/opinion/2015/10/08/tax-irs-politics-migrant-glenn-reynolds-column/73527236/

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