Blue states are hemorrhaging people, jobs, taxes, seats in Congress and electoral votes.
Laboratories of Democracy – Part I
Americans Are Voting With Their Feet
By: George Noga – March 21, 2021
We have blogged often about the differences between red state and blue state America. The exodus from blue states, already a torrent, became a flood due to the pandemic. Blue-to-red migration affects our demographics, representation in Congress, tax base and electoral votes. Its effects on America truly are profound and far reaching. Our four-part series, Laboratories of Democracy, presents a comprehensive analysis.
Part I – Americans Vote With Their Feet (March 21)
Part II – Sixty Years of Liberal Governance (March 28)
Part III – My Travels in Blue State America (April 4)
Part IV – Bonfire of the Blue State Vanities (April 11)
Laboratories of democracy is deeply rooted in our federalist system wherein states enjoy enormous latitude. They even take opposite positions – such as on legalization of marijuana. If one state tries a new approach and it works, it can be emulated by others; the converse also is true. Laboratories of democracy originated with Supreme Court Justice Louis Brandeis who wrote: “A single state may serve as a laboratory and try novel social and economic experiments without risk to the rest of the country.”
Americans always have voted with their feet – fleeing high tax jurisdictions for lower cost venues. The following is from a 1755 letter published by the Boston Gazette. “The taxes in Boston continue very high. Many inhabitants are gone into the country; the (tax) burden now falls on a smaller number; the rich complain of their rates and are moving into country towns where they are greatly eased. I love my native town but my taxes are so large that I am resolved to move my family into the country.”
Will the last person leaving blue state America please shut off the lights?
High taxes remain a principal impetus behind out migration from blue states. However, this avalanche of depopulation increasingly is about other factors such as quality of life, economic opportunity, civility, culture, jobs, spending, safety, freedom, housing, right-to-work, schools, gun control, corruption, regulation, public health, cost-of-living, energy policies and, most recently, the response to the Covid pandemic.
We begin with the most recent official government data, in some cases extrapolated to the present. Sixteen states (nearly all blue) lost population since 2010. Texas gained 5 million and Florida 3+ million. California began to shrink for the first time. The 2020 census radically alters the balance of power in Congress and the Electoral College by shifting up to ten seats (and electoral votes) from blue to red, a swing of up to 20 seats (votes). The losers (80% blue) are NY (2), CA, RI, PA, WV, OH, MI, IL, MN. The gainers (80% red) are TX (3), FL (2), NC, CO, MT, AZ, OR. Also, population loss reduces federal dollars for many programs that are funded based on population.
Blue states are losing more than people, money and votes; they are hemorrhaging jobs, and tax base and leaving a trail of sinking bond ratings, economic stagnation, fiscal deficits and underfunded pensions. Disproportionately, it is the affluent who are fleeing blue states and taking their tax base with them. In the past five years NY and CA lost and TX and FL gained $50 billion in AGI (adjusted gross income). The eight states with the biggest AGI loss all are blue, while the eight largest gainers all are red. People fleeing blue states earn an average of $20,000 more per year than those arriving. Over 25% of retired blue state teachers have their pension checks sent to red states.
It isn’t just about economics; it’s about freedom and happiness. The top five states in the index of economic freedom are red (SD, ND, TN, ID, OK) while – you guessed it – the five worst states are blue (NY, CA, NJ, HI, VT). People in red states are happier; the Gini coefficient for happiness closely tracks the blue/red divide. The divergent responses of blue/red states to Covid put the blue state exodus on steroids. The ten states with the best jobs data since the pandemic are all red, the ten worst all blue.
We close with a stark comparison. New York spends $180 billion per year, or twice the budget of Florida, although FL has 10% more people. New York City alone spends as much as Florida. Just as the real minimum wage always is zero, so it is with tax rates. Sky-high tax rates generate zero tax revenue from NY taxpayers who flee to FL.
Redistribution is part of progressive DNA and they are redistributing their taxes, jobs, people and political power to red states and we don’t even have to say thank you.