Pink states recuperate quicker from COVID pandemic than blue states: report

According to a report, Republican-run states like Florida, Texas, Utah and the Carolinas enjoyed a more rapid economic recovery than Democratic-leaning states, where people and companies left to lower tax havens.

Federal data shows that the red states have seen their part in total US employment increased starting in February 2020, a month before the start of the coronavirus pandemic, according to the Wall Street Journal.

The magazine cites statistics from the Brookings Institution showing that states run by the GOP have added 341,000 jobs over the past two and a half years.

During that same period, the blue states lost about 1.3 million jobs.

Moody’s Analytics also analyzed migration data showing that over a one-year period starting February 2021, 46 million people switched to a different ZIP code.

The states that saw the largest net migration were Florida, Texas and North Carolina – each of which voted for the Republican candidate for president in the last two elections, Donald Trump.

Florida saw huge population growth thanks to migration from Democratic-leaning states.
Florida saw huge population growth thanks to migration from Democratic-leaning states.
EPA

The Lost States largest number of residents California, New York, and Illinois, all controlled by the majority Democratic legislature and Democratic governors.

Analysts say the migration can be explained by the closure of offices and the need to work remotely due to the spread of the coronavirus.

Employees who are no longer constrained to their offices can move to states with warmer climates, cheaper housing, less dense populations, and lower cost of living while continuing to work remotely.

Before working remotely, employees gather to the places where companies’ offices are located. But the pandemic has given workers a choice of where to live, leading to a massive exodus from major seaside cities.

Shoppers browse stores along the boardwalk in Myrtle Beach, South Carolina.
Shoppers browse stores along the boardwalk in Myrtle Beach, South Carolina.
Bloomberg via Getty Images

The researchers found that people also have an incentive to move to areas where home prices are cheaper.

Housing in the 10 states that attracted the most transplants from blue-leaning states cost 23% less than the 10 states that lost the largest number of residents, according to the American Enterprise Institute.

The 10 states that attract the most immigrants have an income tax rate of 3.8% – compared with an 8% income tax rate for the 10 states that have lost the largest number of residents.

Four of the states that win residents – Florida, Texas, Tennessee and Nevada – have no income tax.

Not only employees leaving for the Sun Belt but also their bosses are watching them.

Companies are also moving from blue-leaning states to red states to take advantage of lower tax rates.

Tennessee, which has attracted companies from high-cost states, saw its economy grow 8.6% last year – the highest in the nation. As a result, the state saw an all-time low unemployment rate of 3.2% in April.

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