Red States Leave Blue States Eating Their Economic Dust in the Post-Pandemic World

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Red states –those that lean Republican—are performing better economically and gaining more residents than blue states, where economic performance lags behind and residents are fleeing in droves, according to the Wall Street Journal. Let’s start with the job numbers:

Since February 2020, the share of all U.S. jobs located in red states has grown by more than half a percentage point, according to an analysis of Labor Department data by the Brookings Institution think tank. Red states have added 341,000 jobs over that time, while blue states were still short 1.3 million jobs as of May.

GOP governors should get some of the credit:

Given numbers such as these, it’s perplexing that California Governor Gavin Newsom would choose this month to air re-election ads in Florida, of all places, telling residents there that they’re welcome to move to the Golden State. The idea is ludicrous on its face, as Ron DeSantis’ Florida is performing much better than California in a variety of measures.

Let’s look at migration patterns. Forty-six million people moved to a different zip code in the 12 months leading up to February 2022:

The states that gained the most, led by Florida, Texas and North Carolina, are almost all red, as defined by the Cook Political Report based on how states voted in the past two presidential elections. The states that lost the most residents are almost all blue, led by California, New York and Illinois.

Hardly an advertisement for moving to sunny, crime-ridden Cali or bullet-ridden Chicago. It gets worse:

To track each state’s progress toward normal since the pandemic began, Moody’s Analytics developed an index of 13 metrics, including the value of goods and services produced, employment, retail sales and new-home listings. Eleven of the 15 states with the highest readings through mid-June were red. Eight of the bottom 10 were blue.

People are noticing, and moving out of their blue states en masse. “I almost feel like the pandemic differs from any other time I’ve seen. There’s definitely a flight to lifestyle,” said Chris Camacho, chief executive of the Greater Phoenix Economic Council, a private consulting group that recruits businesses to Arizona. “Individuals were choosing where to live.”

Hundreds of companies are moving from California to escape high living costs, rampant crime, and burdensome taxes.  According to the Hoover Institute at Stanford, the number of companies leaving the Golden State doubled in 2021.  Some of the most notable: The Joe Rogan Experience, The Daily Wire, Gordon Ramsay North America, Tesla, Oracle, Hewlett Packard Enterprise, Pabst Brewing, NortonLifeLock, and many, many more. The message is clear: Blue state policies are driving companies away.

California isn’t feeling blue alone; companies are ditching J.B. Pritzker’s Illinois as well: Hedge-fund company Citadel said recently it would move its headquarters from Chicago to Miami, and Caterpillar Inc. plans to head out to Texas.

New York is feeling the heat, too. In a “once-in-a-century shock to the city’s population,” 479,826 people left New York Between 2019 and 2020, while only 231,439 people moved in. The IRS estimates that those escaping took $19.8 billion in tax revenue with them.

Taxes seem to play a huge role in these exoduses, as the WSJ points out:

The states that gained the most migrants levied an average maximum income-tax rate of 3.8% on individuals. Four—Florida, Texas, Tennessee and Nevada—charged no income tax at all. The 10 states that lost the most residents to moves have an average tax rate of 8.0%.

The Journal attributes much of the flight from red states to blue to a desire among workers to work remotely, which is no doubt a valid point. But these workers could work remotely in California, Illinois, or New York, yet they’re not. Instead, they’re choosing to get out of Dodge and seek greener pastures in Texas and Florida.

The reasons, in the end, are actually quite simple: Blue states like California have ridiculous, punitive taxes (they just raised the gas tax, for instance), uncontrollable crime, homelessness, extreme positions on abortion, and dictatorial COVID policies. (Did you know that three years into this, Newsom still has Cali in a “state of emergency?” Ridiculous.)

Many people in blue states grew up in them, love them, and don’t want to leave. Unfortunately, blue-state policies are pushing them out.