The Economy

The Uneven Politics of the Patchwork Recovery


At this point, it’s hard to argue with the economic recovery—jobs numbers have gone up every month for the last three years. But it’s happening in an uneven way, and the unevenness happens to line up very well with states’ voting habits.

According to the latest economic forecast from IHS Global Insight, only 17 states will return to their pre-recession peak employment numbers by the end of this year. Over the next few years, says IHS, that will get better; by the time Obama leaves office, all but three states will be back at peak levels.

(This compares well with forecasts from the Congressional Budget Office showing economic output reaching potential gross domestic product around 2017.)

The key predictor of how fast a recovery will be is how much recovering is required—that is, how bad things got in the first place. The higher the unemployment rate during the recession, the longer the average recovery.

Of the 18 states predicted to recover by the first quarter of 2014, the worst recession-era unemployment rates averaged just 7.4 percent—for context, that’s about where the national unemployment rate is right now—and monthly unemployment never reached 10 percent in any of them. In comparison, the 32 states enduring longer recoveries averaged 10.1 percent in their worst month during the recession. Those states still have a way to go.

The politics of the recovery are as imbalanced as its pace. The first five states to recover—North Dakota, Alaska, Texas, West Virginia, and South Dakota—all voted for Romney in 2012. The five states expected to take longest to recover—Maine, Ohio, Michigan, Rhode Island, and Nevada—voted with Obama. In fact, of the 17 states that aren’t expected to see a full recovery until 2015 or after, a whopping 14 voted Democratic.

It’s not clear how the patterns of recovery will play out in the midterm elections. According to the forecasts, exactly half the states will have recovered by the third quarter of 2014—just in time for campaign season.

Eric-chemi
Chemi is head of research for Businessweek and Bloomberg TV.

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