The problem with national economic statistics is that they blend the good with the bad, which can be a little misleading in a federalist nation like the U.S. where state policies can vary significantly.
Most blue states have embraced President Obama’s policies and incorporated his economic philosophy in their own policies, which means higher taxes, more government spending and increased regulations. And most red states have taken the opposite approach, cutting taxes—or at least not raising them—and controlling or reducing spending and regulations.
How have those different approaches affected state unemployment levels?
The Bureau of Labor Statistics just released its January 2014 unemployment numbers. The unemployment rate for the nation at the time was 6.6 percent.
According to BLS, 19 states had unemployment rates higher than the national average. Four states exceeded 8.0 percent unemployment rates: California (8.1%), Illinois (8.7%), Nevada (8.7%) and Rhode Island (9.2%). The first two of those four states have been the ones that most associated with Obama’s vision.
How about states where the unemployment level is 7.0 percent or higher: Arizona (7.5%), Arkansas (7.3%), Connecticut (7.2%), DC (7.4%), Georgia (7.3%), Kentucky (7.7%), Michigan (7.8%), Mississippi (7.5%), New Jersey (7.1%), Oregon (7.0%) and Tennessee (7.2%).
Of those 10 states and DC, Connecticut, DC and Oregon are solid blue, Michigan and New Jersey are blue states run with Republican governors, Arkansas and Kentucky are red trending states with Democratic governors (and Arkansas has two Democratic U.S. senators).
In short, only four of the 19 states with higher-than-average unemployment rates—Arizona, Georgia, Mississippi and Tennessee—are pretty strongly in the red-state camp.
Cities can also tell us something about policy trends. While California has an 8.1 percent unemployment rate, the Los Angeles area is 8.9 percent. At 8.5 percent, Chicago—Obama’s home base—is close to the state’s average. Michigan is only on the high-unemployment list because of Detroit (8.3%), which did all the things a good union-led city was supposed to do. Something similar might be said about Georgia and Atlanta.
Obviously, states have their own dynamics and histories that can affect their placement. But 29 states currently have Republican governors and 21 plus Washington DC are run by Democrats, and yet blue states far outnumber red states in the higher-than-average unemployment category.
Were it not for red states bucking Obama’s policies, the national unemployment rate would likely be much higher. Ironically, by doing the opposite of what Obama has been pushing, red states are actually making his national economy look a lot better.