Why do red states hire so much faster than blue states?

Construction workers lay the foundation for a new home in Whitesburg, Ky., in March. (Demetrius Freeman/The Washington Post)

We ranked all 50 states by their hiring rates and were quickly struck by a trend so clear that if it holds up, it should make front-page news: Republican-leaning states are hiring faster than blue states.

Of the 17 states with the fastest hiring, according to the Bureau of Labor Statistics, 14 voted for Trump in 2020. The two states that vote the most for Biden, Georgia and Nevada, are probably best ranked purple (Biden-blue Delaware is the other) . The 10 states with the slowest hiring opted for Biden.

Have we all missed a hidden resurgence of the red state? For every politician who loves to talk about job creation, there are several economists who love to remind us that politics doesn’t have much influence on the economy. Such a sharp political divide is as rare as a 17-pound potato, and at least as newsworthy.

That being said, there are some plausible explanations in this case. Many of the fastest hiring states—Alaska, Wyoming, Montana, and Kentucky—have unusually low tax rates and rely on extractive industries like mining or oil. We have seen firsthand the economic boom that gas and pipelines can bring to struggling regions.

Certain outspoken workers in those places often tell reporters that regulation-happy Democrats in Washington are stifling business. And they may be right. Until the booms explode and the environmental bill expires, hiring and wages often skyrocket as the gas industry expands.

But when we delved deeper, confusion gripped our synapses. First, we found out that this isn’t just a matter of pandemic politics or a Trump-era trump. This set of states has been hiring faster for the entire decade for which we have data.

More puzzlingly, we found that faster hiring hasn’t translated into faster job growth. When we looked at the payroll numbers, the typical red state was not adding jobs any faster than the typical blue state.

And faster hiring doesn’t indicate a more dynamic economy. A new analysis from the Economic Innovation Group found a healthy mix of red and blue between the most and least dynamic state economies. EIG, a bipartisan DC team that produces data-driven research and policy proposals, measured dynamism based on patenting, business start-ups, housing permits and other factors, few of which had anything to do with the pace. of recruitment.

Puzzled, we called Nick Bunker, director of economic research at the Indeed job site. Bunker is the world’s second most prominent fan of hiring and vacancy data, behind only Treasury Secretary Janet L. Yellen, and he had an explanation ready for the apparent disconnect.

“It’s an upheaval,” he said. Those red states weren’t creating jobs any faster. They were just hiring more often because people were bouncing more. Red states don’t have more layoffs or job offers than blue states, they just have more resignations and hires.

As Bunker points out, resignations and hirings are closely watched. Both reflect how quickly companies move through workers. When he combines resignations and firings, then compares them to hiring, he can’t tell the two lines apart.

It’s also why the ever-cool Bunker gets uncharacteristically agitated when talking about the “Great Resignation.” Yes, they were all quitting, but they weren’t giving up. They were being rehired elsewhere.

When we break down the numbers using the Bureau of Labor Statistics’ biennial job tenure survey, we quickly see that red states see more job gaps than blue states.

Our first guess, like Bunker’s, was that red states tend to have higher turnover industries. The data backs us up, to a point.

To illustrate, look at the two extremes: Government workers spend more than three times as much time at their jobs as retail workers. And government workers are more common in Biden states, while retail workers take up a larger share of employment in Trump states.

But while churn rates do correlate with some high-turnover industries, particularly the one containing increasingly ubiquitous dollar stores, it’s probably not the full explanation. Because closer analysis shows that red states have higher worker turnover than blue states in almost every major industry.

To figure things out, we tracked down Kathryn Anne Edwards, one of the smartest labor economists we know of and winner of the third most prestigious prize in economics: One Button and membership card with our big, ridiculous logo. (Edwards suggested a data source that inspired our column on the disappearing vacation day.)

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He urged us to look at wages, noting that even within industries and businesses, employers pay different wages across states depending on what they can do.

“One thing that red states tend to have in common is that they are right-to-work states, have lower rates of unionization, and lower wages with no state minimum wage,” Edwards told us via email.

As usual, you are right. An index from the Oxfam America anti-poverty team measuring the right of workers to organize is even more strongly correlated with a higher resignation rate than the Trump vote: the resignation rate is lower in pro-union states . (Lower median wages and a higher proportion of workers earning less than $25 an hour also correlate with a higher dropout rate. States of the union.)

And, of course, workers in red states tend to earn less than their peers in blue states (although they also benefit from a lower cost of living). Our analysis showed that workers from low-income families face higher turnover in red states, even when people from higher-income families actually had more job security in those same places.

The disparity seems rooted in education. The job turnover gap between the Trump and Biden states is largest among those with less education. It closes as the education of workers increases and changes entirely for workers with the highest education: they see more job security in Trump states than in Biden states.

To help unravel what it all means, we turned to Research Director Kenan Fikri and his friends at EIG. Fikri, the kind of guy who seems genuinely delighted to get dark questions about state data on a Friday night, confirmed that stronger unions are likely to keep workers in blue states longer.

He also developed an interesting theory: Turnover is higher when workers and employers are not a good mix. And it’s harder to find a good fit in rural areas, where workers don’t have many job prospects, and in less educated areas, where employers struggle to find workers with the right skills. And we saw some correlation with turnover in both cases.

As Bunker and Fikri have hinted, it seems that the fullest explanation for this particular gap between the red state and the blue state may lie in deeper, harder-to-quantify differences over the nature of work and workers’ rights.

Consider that if attitudes towards the social safety net mean that a blue state is more likely to provide paid leave, then turnover will probably be less because workers won’t have to quit to deal with a family emergency, illness or childbirth. . Or if a blue state offers better unemployment benefits, laid-off workers may hold out longer to find a better-fitting new job. And once they’re in a job that matches their skills and needs, they’re less likely to quit.

The three experts also mentioned the minimum wage: In many blue states, politicians help low-income people get raises by raising the minimum wage. That allows them to see a higher paycheck while staying in the same job.

In red states, increases tend to come only through competition. A worker gets a raise because his low wages push him to find a rival employer who is willing to pay more. Logically, that would lead to more job turnover, right?

It turns out that both approaches seem to lead to the same place: Wage growth in a typical red state is virtually identical to wage growth in a typical blue state. But one of them necessarily leads to a little more job jumping.

The best graph we can’t explain

In this line of work, spurious correlations are an occupational hazard. We can usually discover them through extensive reporting, which usually uncovers a third factor we didn’t measure or a story accident driving the association.

But here’s a strange correlation we can’t get out of our heads: The age of a state’s housing stock is related to its hiring and vacancy rates in a way that seems to transcend politics. The older the houses, the lower the abandonment rate.

It doesn’t seem to be the case that places with older buildings also have older populations that aren’t as job-hopping. A scatterplot of human age and recruitment looks like one of those moose crossing signs that scoundrel teenagers have peppered with buckshot.

We called Vanessa Brown Calder of the Cato Institute, a libertarian-leaning think tank, who suggested a fascinating theory: Turnover is higher among younger, less-skilled workers. And research has shown that younger workers are excluded from communities with strict zoning regulations, where there is less new construction and older homes.

Now we ask you the question: What else could explain the relationship?

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