What's New Since Our Last Coverage

Our previous piece established that Americans feel economically miserable despite headline numbers that look healthy. Now the debate has shifted to a more specific question: which states are actually winning, and why does that gap keep widening?

New coverage from Fox News, City Journal, The Daily Economy, and CBS News paints a divided picture — and the mainstream press on both sides is cherry-picking the data that fits their narrative.

The Red State Wins Are Real

The numbers favoring red states are supported by BEA, BLS, and Census Bureau data.

According to City Journal analysts Joel Kotkin and Wendell Cox, Texas income growth hit 4.2 percent in 2019 BEA estimates — versus California's 3.6 percent and New York's 2.1 percent. Texas is growing at twice New York's rate.

On jobs, The Daily Economy reported that Texas added 267,400 nonfarm jobs in a single year, with a civilian labor force now exceeding 15.3 million, according to the Texas Workforce Commission. California added 223,600 jobs over the same period — but its unemployment rate hit 5.2 percent, the second-highest in the nation behind D.C. at 5.4 percent, per Bureau of Labor Statistics data for June 2024.

Kotkin and Cox note that between 2010 and 2019, New York lost a net 1.379 million domestic migrants. California gained a measly 50,000 residents in a year — in a state of nearly 40 million people. People vote with their feet, and they're leaving blue states.

What Conservative Outlets Are Missing

Fox News and right-leaning outlets largely ignore labor force participation — a significant omission.

Robin Brooks, managing director and chief economist at the Institute of International Finance, conducted a state-by-state analysis with striking findings. According to CBS News, blue states are pulling workers back into the labor force after the financial crisis. Red states are not.

"For blue states, people are getting crowded back into the labor force, but it's not happening for red states," Brooks said.

Since 2014, despite a labor market generating 160,000 to 200,000 jobs per month nationally, red states have lagged badly on getting their residents employed. The IIF analysis concluded: "The robust economic picture at a national level is therefore NOT healing the red versus blue state divide."

Only a handful of red states — Arkansas, Wisconsin, Florida, and Georgia — increased their employment-to-population ratio faster than the national average. The vast majority of red states either grew slower than average or actually decreased that ratio.

What Left-Leaning Outlets Are Missing

CBS News runs with the IIF data, but buries the reason why red states have lower labor participation.

Brooks himself points to structural dependency on brick-and-mortar retail and manufacturing — industries under genuine pressure. That's a legitimate economic challenge, not evidence that low-tax, low-regulation policy fails. California's 5.2 percent unemployment rate alongside its 49th-place ranking in regulatory freedom (per the Cato Institute's Freedom in the 50 States report, cited by The Daily Economy's Vance Ginn) suggests high-regulation states create jobs that are increasingly unattainable for working-class residents.

California may have strong labor force participation numbers in coastal metros. A warehouse worker in Fresno faces different conditions.

The Reality

Both sides are right about something. Both sides are avoiding something.

Red states are winning on income growth, population growth, job creation, and fiscal responsibility. Texas limiting government spending growth to less than the rate of population growth plus inflation — a standard Ginn documented at The Daily Economy — produces real results.

Red states are losing on getting their existing residents into the workforce. The structural problems tied to industry mix, geographic isolation, and the opioid crisis cannot be fixed by tax cuts alone.

The CBS/IIF data is from 2017. The City Journal and Daily Economy data run through 2024. Red states have continued gaining ground on income and job creation, while the labor participation gap documented by IIF remains.

On the Ground

If you live in Texas, Florida, or another low-tax red state, your state's economic fundamentals are genuinely strong.

If you're a working-class resident in rural Kentucky or West Virginia, strong state-level job numbers may not be reaching your community.

The politicians who tell you their side has all the answers are lying. The economy is geographic, structural, and complicated. Anyone selling you a bumper sticker version — from either party — is working an angle.