Red states leading US economic recovery from the coronavirus pandemic

Red states leading US economic recovery from the coronavirus pandemic

August 20, 2021

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States with Republican governors are leading the U.S. economic recovery from the coronavirus pandemic, while those run by Democrats – which tended to impose lengthier and stricter lockdowns on businesses – are faced with significantly higher unemployment rates. 

Labor Department data published last week shows the 10 states with the lowest unemployment rates are all led by GOP governors – while the 10 states with the highest percentage of out-of-work Americans are run by Democratic governors. 

Blue states including Nevada (7.7%), New York (7.6%), New Mexico (7.6%), California (7.6%) and New Jersey (7.3%) had substantially higher unemployment rates than the national average of 5.4% in July, the data shows. By comparison, red states – such as Nebraska (2.3%), Utah (2.6%), New Hampshire (2.9%), South Dakota (2.9%) and Idaho (3%) – were well below the national average.

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In fact, of the 20 states with the lowest unemployment rate, those led by Republican governors account for a vast majority: 16. Twenty-five of the 27 GOP-led states gained jobs in the last month, the data shows, while two of the states – Idaho and Utah – actually have more jobs than in February 2020, before the pandemic hit. 

Conversely, just 13 states led by Democrats have recovered at least two-thirds of the jobs lost during the pandemic. 

Overall, the average unemployment rate in red states is 4.3%, while the average jobless rate in blue states is 5.9%, above the national average.

The data comes less than one month before supplemental unemployment benefits – first established in March 2020 and renewed twice by Congress – are poised to expire on Sept. 6 under the $1.9 trillion relief plan that Democrats passed in March. Some 7.5 million workers are expected to lose their benefits, according to a recent report published by the left-leaning Century Foundation.

The Biden administration has maintained that it's "appropriate" for the three relief programs to end on Labor Day, but encouraged states with high unemployment rates to continue repurposing federal funds to extend the assistance.

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"Even as the economy continues to recover and robust job growth continues, there are some states where it may make sense for unemployed workers to continue receiving additional assistance for a longer period of time, allowing residents of those states more time to find a job in areas where unemployment remains high," Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh wrote in a Thursday letter to Democratic congressional chairmen. 

Already, 23 states – all but one of which is led by a Republican governor – have ended the unemployment programs, a move intended to help businesses that are struggling to hire workers. (Arkansas, Indiana and Maryland were ordered by state judges to reinstate the relief programs.)

Critics argue that other factors, such as a lack of child care, are the reason for lackluster hiring and have said that opting out of the relief program before it's officially slated to end will hurt unemployed Americans, leaving them with no income as they search for a new job. 

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The data released Friday shows little statistical evidence that prematurely ending benefits had a disproportionate impact on employment. And although they continued to pay out the benefits, nine states and the District of Columbia all saw a decline in unemployment last month.

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