TCS Daily

Red and Blue America: Meet the Health Belt

By David Tufte - September 25, 2006 12:00 AM

The division of America into red and blue is a totem of our times. The red states voted for Bush, the Blue for the Democrats. The blue states are on the coasts, the red states are flyovers.

More importantly to Republicans, and invidiously to Democrats, the red states are -- at worst -- no less prosperous than the blue states, and probably a good bit better off if we pay attention to migration patterns. The Democrats know they are in real trouble if they don't start turning some of those red states, because the electoral college will shift away from the blue in the next reapportionment.

The list of contrasts between red and blue is large and it can be fun to play around and find unusual associations.

The September 25th issue of Business Week provides a new way to divide up the country, that's both cute and informative. They use some unusual colors I'll label gold, azure and teal, and call the result the health belt.

It's fun to draw distinctions among states, and it's cute to throw some unusual colors into the mix. But, their result is more interesting than they guess, since it correlates very well with the red/blue distinction. This is because it doesn't have anything to do with health at all, but on employment in the (heavily government-involved) healthcare industry.

SOURCE: BusinessWeek

Their map appears on pg. 57 as part of a cover story entitled "What's Really Propping Up the Economy". It shows how big a share of recent employment growth is devoted to healthcare for 48 states -- Alaska and Hawaii were not included.

The division is somewhat arbitrary, but it works like this: if the share or employment growth devoted to healthcare is under 30%, the state is colored gold, 30-60% is azure, and over 60% is teal. Twenty-three states are colored teal, and this is dubbed the health belt.

Now, to make things interesting, let's match that up with the red/blue distinction based on the 2004 electoral map. Of the thirteen gold states, ten of them voted for Bush. Of the twelve azure states, nine of them voted for Bush. The remaining 23 states split just about evenly with Bush winning eleven.

The electoral counts are just as one sided: Bush has a 3 to 1 edge in gold state electoral votes (78 to 22), a 3 to 2 edge in the azure states (92 to 62), and lost to Kerry by a 3 to 4 ratio in the teal states (113 to 158).

It actually gets a lot more convincing if we read the footnotes. Business Week lumped together three kinds of states to produce their health belt. Due to Katrina, Louisiana actually lost both total employment and healthcare jobs, but I think it's reasonable to exclude it as a special case. Eight more of the teal states had increases in healthcare employment along with decreases in total employment. The electoral vote split in that group went more like 3 to 1 in Kerry's favor; and it is even more lopsided if we exclude Mississippi from that group since substantial parts of it were also ravaged by Katrina. That leaves fourteen health belt states with both positive job growth, but over 60% of it coming from healthcare. Here, the states split evenly between Bush and Kerry, with Bush getting two more electoral votes.

The bottom line is that Kerry only did well in states where job losses occurred, and where they could be cancelled out by healthcare employment growth.

None of this would matter if we were talking about most other large, ubiquitous industries - like, say, grocery stores. However, it is very curious given that our healthcare industry is either dominated by government spending - through Medicare, Medicaid, and hospitals subsidized with tax dollars - or by government regulation and market interference.

It's useful to ask, why precisely are people voting for Democrats in places where big investments are being made in healthcare? Let's look at some of the possibilities.

The obvious one is that this is related to an aging population. This doesn't hold much water - Florida is a gold state. So is Arizona.

A related possibility is that it is because young people are fleeing some states, leaving gray-haired healthcare consumers behind. This doesn't jibe well either - that description fits the upper Midwest - which is mostly free of teal.

A different tack might take us to lifestyle choices. Perhaps unhealthy living leads to more healthcare spending. Here we might look at the deep South for poorer health, and California for better health. This doesn't work either: California is azure, and the South is a mix with the deep South decidedly not teal.

A fourth possibility is that private investment is creating this pattern. But, it seems unlikely that managers with incentives to make profits are investing in healthcare in teal states while they simultaneously disinvest in other industries. Sorry, but that sort of behavior passes the duck test for government, not private, involvement.

It isn't any secret that red state voters are happier with the Bush administration's economic performance. Surely they have a right to be: the gold states are showing growth in other industries that is swamping healthcare. By the same token, states without a lot of unhealthy retirees but that do have weak employment growth in all sectors but healthcare - think Minnesota - probably have a legitimate reason to swing towards the Democrats.

I think the last possibility holds water, but it leaves out a lot of states where most, all, or more than all of employment growth is coming from healthcare. What's up with that?

I'll speculate that more research can show that Congressional earmarks, federalism that directs healthcare spending down to one-party states, and state level decisions on the generosity of Medicare and Medicaid rules make the health belt this decade's big experiment with Keynesian policies, indirect vote buying, or both.

David Tufte is an economics professor at Southern Utah University. He also writes the blog voluntaryXchange. Thanks to the dozen people who suggested names for the unusual color scheme.


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