Liberal blue states are economic dinosaurs. Will they change their ways before they go the way of Detroit and become extinct?
The so-called “progressives” love to talk about how their policies will create a worker’s paradise, but then why is it that day after day, month after month, year after year, people are fleeing liberal blue states for conservative red states?
The new Census data on where we live and where we moved to in 2014 shows that the top seven states with the biggest percentage increase in in-migration from other states are in order: North Dakota, Nevada, South Carolina, Colorado, Florida, Arizona, and Texas. All of these states are red, except Colorado, which is purple.
Meanwhile, the leading exodus states of the continental states in percentage terms were Alaska, New York, Illinois, Connecticut, New Mexico, New Jersey, and Kansas. All of these states are blue, except Alaska and Kansas.
The latest Rich States, Poor States document (which I co-author), published by ALEC, the state legislative organization, finds that nearly 1,000 people each day on net are leaving blue states and entering red states. This migration is changing the economic center of gravity in America—moving it relentlessly to the South and West.
Travis Brown, the author of the indispensable book “How Money Walks,” shows that two of the leading factors behind this movement of human capital are 1) whether a state has a right to work law (half of the states do) and 2) how high the top income tax rate is in the state. Nine states have no income tax today, and they are creating twice the pace of jobs as are high-income tax states.
Data from the Internal Revenue Service (IRS) show a similar trend. Each year the IRS issues a migration data report that examines how many tax filers (and dependents) in the year changed their residency and how much income was transported from one state to another. The numbers for the most recent year (tax filing year 2013) are gigantic and put the lie to the claim that interstate migration is too small to matter in terms of the wealth and economic opportunity in one state versus another.
In 2013, Florida gained $8.2 billion in adjusted gross income from out-of-staters. Texas gained $5.9 billion—in one year. Five of the seven states with the biggest gains in income have no income tax at all: Florida, Texas, Arizona, Washington, and Nevada. New York was again the big loser, with another 112,236 tax filers leaving and taking $5.2 billion with them. (So much for those TV ads trying to lure businesses into America’s 2nd highest taxed state with temporary tax breaks.) Illinois lost nearly 67,000 tax filers and $3.7 billion of income it can no longer tax.
I’ve never met a Democrat who could come up with even a semi-plausible explanation for why families and businesses are hightailing it out of blue states. They are leaving states with high minimum wages, pro-union work rules, high taxes on the rich, generous welfare benefits, expansive regulations to “help” workers, green energy policies, etc. People are voting with their feet against these liberal policies.
When I debated Paul Krugman this summer, I confronted him with this reality. His lame explanation for the steady migration from liberal North to conservative South was that “air conditioning” has made the South more livable. Americans are evidently moving because of the weather.
There are two glaring problems with this theory: California and North Dakota. In the last decade ending in 2013, 1.4 million more Americans left California than moved into the once-Golden State. It’s a good bet these California refugees didn’t leave for more sunshine or better weather.
And if warm weather is what is attracting people to the South—and surely there is some truth to that—why did the coldest state outside Alaska, North Dakota, have the biggest population gain in percentage terms in the most recent year? The answer is that workers went to get jobs created by the Bakken Shale oil and gas boom. By the way, California is one of the oil- and gas-richest states in the nation, but its “green” politicians are regulating that industry out of businesses. So much for caring about working-class Americans.
The latest Census and IRS data merely confirm what Americans can see every day with their own two eyes. Red states are a magnet. There’s a downside to this for sure. Conservatives have a legitimate gripe that as blue-staters come into their prosperous red states, they try to turn them blue. That’s happened in New Hampshire, where Massachusetts transplants vote for the left-wing policies they just fled.
But the underlying trend is unmistakable: Liberal blue states are economic dinosaurs. Will they change their ways before they go the way of Detroit and become extinct?