Red States, Voters Seeing Bigger Economic Gains Under Trump Than Obama

 Andrew Soergel
  4th-Sep-2018

THE LABOR MARKETS IN red-leaning states and for likely Republican voters have slightly outperformed their blue counterparts since President Donald Trump took office, according to a new study that suggests rebounds in mining and manufacturing are among the factors bolstering the economies of traditional Republican strongholds.

The report, released Wednesday by Indeed chief economist Jed Kolko, ultimately found that differences in performance mostly exist "around the edges" and that "these gains represent a continuation of the long recovery that began early in (former President Barack) Obama's first term."

But the unemployment rate for likely Trump supporters fell by 0.9 percentage points between January 2017 and July 2018. For those likely to have supported Democratic challenger Hillary Clinton, unemployment was down just 0.7 percentage points.

"For both groups, unemployment has been dropping pretty consistently since early 2010," according to the report. "In July 2018, the unemployment rate stood one percentage point higher for likely Clinton supporters than for likely Trump supporters, 4.1 percent versus 3.1 percent, a narrower gap than at the height of the recession."

Kolko's report, which draws on Bureau of Labor Statistics data and in-house demographic models, points to a subtle but apparent shift in economic performance between the first 18 months of the Trump administration and the last 18 months Obama was in office.

For comparison's sake, likely Trump supporters enjoyed only a 0.1 percentage point improvement in terms of unemployment during the final year and a half of Obama's presidency. Likely Clinton supporters saw their rate drop by a full percentage point during that window – a mismatch that now appears to have flipped under Trump.

Job growth, likewise, seems to have disproportionately improved in red states under Trump after lagging at the tail end of the Obama presidency. During Trump's first year, states in which Trump won by at least 20 points saw job growth ramp up 1.2 percent, compared with the 0.6 percent growth such states enjoyed during Obama's final year in office.

Clinton-heavy states, on the other hand, saw job growth of 1.5 percent during Trump's first year, down slightly from the 1.6 percent expansion they experienced during Obama's final year.

The Trump administration has been accused of disproportionately favoring its base at the expense of more Democrat-friendly states – particularly as it relates to the recent tax overhaul that restructured state and local tax deductions. But Kolko notes that the apparent economic acceleration in Trump-friendly states is "probably not" the direct result of specific economic policies.

Instead, he points to broader employment and demographic trends that have seen improvements largely concentrated among "the least educated – even more so since 2017 than before – because a tightening labor market helps the least well off."

"Among those without a college degree, both non-Hispanic whites, who lean red, and Hispanics and non-whites, who lean blue, have seen strong gains under Trump. But these employment measures have improved little in the past 18 months for college-educated adults, who tended to vote blue in 2016," Kolko wrote. "Educational differences probably explain why improvements in employment have been greater for likely Trump supporters in the past 18 months."

Indeed, the national unemployment rate dropped to 3.9 percent in July – having fallen 0.4 percentage points over the course of the past year, according to the BLS.

But that decline has largely benefited those without a bachelor's or advanced degree. Year-over-year, college degree holders have seen their unemployment rate drop from 2.6 percent to 2.2 percent, an improvement of 0.4 percentage points, or roughly 15 percent.

Those without even a high school diploma, meanwhile, have seen their unemployment rate plummet from 6.8 percent to 5.1 percent – an improvement of 1.7 percentage points, or 25 percent.

Kolko also highlights the "strong urban-suburban-rural partisan split" as a factor in labor market success. A "broader suburbanization of jobs" has helped accelerate job growth in deep red counties, he said, and "pre-existing deeper forces rather than recent policy action" have factored into "a slowdown in growth in urban counties since 2015 and a slight pickup in rural counties in 2017."

Individual industry trends have also played a leading role in determining which demographics and geographic locations have seen economic gains in recent years. Job growth in mining and logging jumped 9 percent during Trump's first 18 months, compared with a 13.9 percent contraction during Obama's final days in office.

Manufacturing payrolls, meanwhile, expanded 2 percent, after jumping just 0.1 percent in the final days of Obama's presidency.

But Kolko is careful not to attribute these gains specifically to Trump policies, noting that "the fall and rebound of mining employment tracks global oil prices closely" and that "manufacturing growth perhaps owes some thanks to strengthening global demand and a weakening dollar in 2017."

In fact, Kolko notes that "the fastest-growing sectors under Trump and Obama are similar," specifically highlighting "construction, transportation and warehousing" and noting the disparity between Trump's first 18 months and Obama's final months is "probably (not the result of anything) either president did."

"Despite dramatic partisan swings in economic confidence, the labor market has improved steadily in red and blue America under both Trump and Obama," Kolko said. "Midterm candidates looking for partisan battles will have to find those elsewhere."

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