Red States Are Winning the Post-Pandemic Economy

Workers and employers moved away from the coasts to middle of country and Florida, sparking swifter recoveries there

By Josh Mitchell. Excerpts: 

"Since February 2020, the month before the pandemic began, 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.

Several major companies have recently announced moves of their headquarters from blue to red states. Hedge-fund company Citadel said recently it would move its headquarters from Chicago to Miami, and Caterpillar Inc. plans to move from Illinois to Texas."

"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."

"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."

"Remote work allowed many workers to move to red states, not because of political preferences, but for financial and lifestyle reasons—cheaper housing, better weather, less traffic and lower taxes"

"In the 10 states that gained the most people from moves between April 2020 and June 2021, the typical home cost 23% less than the typical home in the 10 that lost the most residents to moves"

"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%."

"People who moved during the pandemic tended to go to areas with fewer pandemic-related restrictions, such as school and office closures and event cancellations"

"In general, red states were less likely than blue ones to impose mask or vaccine mandates, social-distancing restrictions or remote schooling. Enrollment in public elementary and secondary schools fell nationally during the pandemic, but the sharpest drops occurred in school districts that had more days of remote learning"