Red, Blue and Purple States: Top Economic Performers 1999-2010

Do Red states, which are viewed as more pro-business and tax friendly, experience superior economic performance when compared to Blue states that are seen as more pro-government and tax burdensome? That is, have the states voting for the Democrat presidential candidate in the last three elections (Blue), or the states with electoral votes cast for the Republican in the last three elections (Red), experienced the best economic performance? Alternatively, have the Purple states, states that voted for the Democrat presidential candidate in at least one of the elections, and the Republican in at least one of the three presidential elections been the top performing group?

U.S. Bureau of Economic Analysis data show that in terms of the growth of the overall state economy, or Gross Domestic Product (GDP) between 1999 and 2010, Red states grew by a median of 66.2% or significantly greater than Blue states at 52.2%, and Purple states at 60.5%. As for job additions over the same time period, Blue states again underperformed with a median growth of 0.2% compared to Red states’ expansion of 3.2% and Purple states’ of 3.3%. In terms of after- tax income per capita, the gap was substantial with Red states advancing by a median 52.3% compared to the much slower growth of Purple states at 46.1% and Blue states at 49.7%.

 Moreover in terms of overall growth (GDP), 8 of the top 10 performing states were Red states while only 4 of the 10 bottom performing states were Red. On the other hand, Blue states tended to have a somewhat more evenly distributed income with a median Gini coefficient of 0.450 compared to Red and Purple states’ 0.455. Gini coefficients range between 0 and 1.00 with lower coefficients indicating more evenly distributed income. Details of the analysis are in the accompanying table. Ernie Goss.