Will President Biden Have An Economic Mandate?

Commentary

Joe Biden will govern a nation divided in many ways - and the pandemic-battered economy is one prime example.

My trusty spreadsheet, filled with government data, parsed some of the business-related differences between the states that Biden won in the presidential race vs. those he lost. Sharp statistical contrasts suggest dilemmas such as business recovery, poverty, healthcare and housing won't be politically easy to cure.

When you ponder these divergences, don't forget the nation's founders in their "federalist" thinking saw the nation as a grand experiment of state preferences. And choices made at local levels have created varying economic results, especially in recent years.

It certainly seems that disappointing business outcomes factored into Republican Donald Trump's loss. But does victory give Biden any economic mandate?

One grand benchmark - people - suggests it's possible: States that Democrat Biden carried have 188 million residents - 33% above the 141 million in states he lost.

But I'll note that a far more striking difference is how those populations have grown. Biden's states added 8.8 million people in the past decade, 26% less than the 11.9 million added where he lost.

That large gap - 4.9% growth in Biden's states vs. 9.2% in Trump's - highlights how relocations leaned toward conservative cities.

Who's hiring?

There are 82 million workers in Biden states vs. 68 million in the states lost.

Yet the hiring pace was quite similar in the Trump administration's first three years: 4.4% in Biden states vs. 4.3% elsewhere.

Pandemic-era job cuts were far sharper in Biden's states: 11.4% positions lost vs. 8.1% in states he lost. Perhaps that pain was expressed on Election Day.

This tale of two nations shows up in paychecks, too.

The average annualized wage in Biden states was $67,870 in 2020's second quarter - 27% above $53,372 in states lost. That's a nugget to consider when future government aid is pondered. A nationwide standard - such as a $600 stimulus check - isn't as impactful in Biden states.

These employment disparities help explain a chasm in the broadest measure of business output - gross domestic product. The states Biden won produce at a $13.34 trillion annual rate - 73% above $7.71 trillion in states lost.

You can blame the industry mix, too. Biden's states more frequently produce "value-added" goods vs. commodity-like things. Or think of this split as white-collar work vs. blue-collar jobs. Education matters, too: 36% of folks age 25 and older in Biden states have college degrees vs. 29% elsewhere.

That's not a judgment, just a reality. And it's a key reason why trade issues are so big in the states Biden lost: commodity industries often face stiff foreign competition.

In Biden states, a new Census Bureau yardstick that includes cost-of-living variances shows 23.5 million with impoverished incomes - 38% above the 17 million in states lost. That adds up to 12.5% of residents in states Biden won vs. 12% elsewhere - a small but noteworthy gap. High living costs are clearly an issue.

Then consider what's needed for an aging nation.

The 65-plus population is 30 million in Biden states vs. 23 million in states lost. But that translates to Biden states being a tad "younger" - 15.9% of their residents are above 65 vs. 16.2% elsewhere. Note: Low-tax states, where Biden ran poorly, have been attracting numerous retirees. Think Florida and Idaho.

Broader health issues will be confounding, too.

For example, there are far fewer uninsured residents in Biden states: 13.6 million (7% of residents) without medical coverage - 19% below 16.7 million elsewhere, or 12% of the population. Don't forget that many states Biden lost have had leadership highly critical of Obamacare coverage options.

And, finally, housing.

The Biden states aren't building enough, with 579,000 units permitted in the past year. That's 22% below the 739,000 in states he lost. It's not simply a real estate challenge - its one reason why Biden states have slower-growing populations.