Why the blue area was hit more economically than the red area

The coronavirus recession was more severe in Democratic locations than in Republican locations. Blue states like Massachusetts and California have higher unemployment rates, higher unemployment rates, and significantly lower job listings than red states like Utah and Missouri.

Most of this partisan gap in financial distress turned out to be due to different combinations of work in red and blue places.

The partisan work gap is fairly consistent throughout the pandemic. Employment in the blue states declined further in the first two months, and cumulative employment declines have been significantly worse in the blue states than in the red states since June.

The gap between occupational factions has not been closed because it is rooted in the fundamental economic differences associated with occupations. The worst unemployment was in the leisure and hospitality sector and travel and recreational destinations such as Honolulu, Las Vegas and New Orleans.

The· The most unemployed sector in a pandemic It tends to be located in the blue county. In all industries, 57% of employers live in the county where Hillary Clinton won in 2016. 59% of workers in the accommodation and food service industry in the pandemic-hit sector. 63 percent of art, entertainment and recreation. 66% of the information industry, such as publishing, film and telecommunications, lives in the county where Mrs. Clinton won. In contrast, jobs in most of the less pandemic-damaged sectors, such as utilities, construction, and manufacturing, are biased towards the counties that President Trump acquired in 2016.

In addition, the local economy is struggling where more people can work from home.But Unemployment was mild in the sector Where more people can work from home (technical, financial, professional services, etc.), local businesses such as retail stores and restaurants are lagging behind in where more people can work from home. This helps explain why unemployment is skyrocketing in technology hubs and financial centers such as New York and San Francisco. Looking at all metropolitan areas, employment in metropolitan areas where telecommuting is possible has declined further since February. Also, telecommuting metros tend to lean blue.

The correlation between changes in employment in metropolitan areas from February to September and the margin for the 2016 Trump presidential election is 0.53 (1 for perfect relationship, 0 for irrelevant). ..

In other words, the redr the place, the less unemployment and the stronger the relationship. However, when adjusted for the combination of local occupations and industries, the correlation drops to 0.22.

Other factors related to partisanship are also systematically related to unemployment during a pandemic. Employment is further declining in larger metropolitan areas and higher cost metropolitan areas. Perhaps because people move away from the city and perhaps more affordable, or companies struggle in places with high rents and rural wages. Adding metropolitan population and living expenses to the analysis along with the job mix further reduces the correlation between employment changes and voting margins to 0.17.

This means that more than two-thirds of the Partisan gap can be explained by local employment composition, population size, and living expenses. These factors explain most of the gaps between parties in other economic measures, such as rising unemployment and fewer jobs on Indeed.

The relatively small partisan gap in the remaining economic outcomes can be the result of restrictions or differences in individual behavior. Throughout the pandemic, there were clearly partisan differences in concerns about outbreaks, wearing masks, and social distance. Studies show that individual choices have brought more than a blockade policy to declining economic activity, and places with few restrictions remained unemployed.

The coronavirus recession is unusual in that service employment (such as restaurants) is lower than that of the commodity sector (such as factories). All other recent recessions have adversely affected commodity-related industries, which tend to be more concentrated in Republican-friendly locations.

Long-term government forecasts show a much different situation. Faster employment growth is expected in sectors that are more concentrated in the bluer areas. However, if more people continue to work in remote areas and some move to more affordable areas after a pandemic, rising living costs in blue areas can be a drag on growth. Still, the future looks far more promising for the blue states economy than it is today.

Jed Kolko is’s Chief Economist. You can follow him on Twitter. @JedKolko..

Source link

Back to top button