What the jobs picture means for the election

The economic narrative for this election has been pretty simple. Inflation (and illegal immigration) are a huge liability for Vice President Kamala Harris’ campaign. But the jobs picture appears to be a meaningful positive for the Democratic candidate for president. Many pundits expect that, ultimately, how voters feel about the economy will come down to whether or not higher prices on groceries, rent, and gas affect voter sentiment more than a good jobs picture does. These are two distinct economic issues, each pulling in a different direction in how one objectively rates the state of the economy in a Biden-Harris administration.

But a further look at the data suggests that the jobs picture itself may be more of a liability for the Harris campaign than previously thought. This is not because of some of the reasons often cited by critics of the current administration. Many have chosen to focus on frequent revisions to the data, but those revisions speak to complexities in the way the data is collected and reported and are very common. The revisions do not point to high shadow unemployment (jobs numbers not visible in the data), as the very low weekly jobless claims reiterate. Others have focused on the high percentage of new jobs in the government sector, which certainly speaks to productivity and economic growth over time. But private sector job creation speaks to the more productive parts of the economy being fed, whereas the creation of government jobs leads to more bureaucracy. But when it comes to individuals voting with their own pocketbook, a job is a job, and employed people may just be happy to have a paycheck, whether or not their employer is a private business or a governmental entity.

So what is the liability for the Harris campaign if the unemployment rate is genuinely low and wages have (mostly) kept up with inflation? The answer is the Electoral College. The national unemployment rate does not tell the story of the specific states Vice President Harris needs to win a majority of electoral votes. In fact, it tells an absolutely brutal story for Democrats everywhere.

The highest percentage of job growth in the country since 2020 (measured as right before the pandemic began) is in Idaho (13.2 percent), Utah (12.1 percent), Montana (10.3 percent), Texas (10.2 percent), and Florida (10.1 percent). In fact, except for “purple” Nevada, the top 10 states for job growth are red states. When one looks at the 10 worst areas of the country, you see negative job growth in the District of Columbia, Hawaii, Louisiana, Maryland, and Vermont (all but one being deep blue enclaves) and almost immeasurably low job growth in Illinois, Massachusetts, Michigan, New York, and Rhode Island. In other words, red states own the top 10 while blue states claim the bottom 10 spots.

But beyond the basic narrative that over the last five years the highest job growth has come from red states and the lowest job growth (negative, in fact) has come from blue states, there is the reality of the battleground states that are most important for winning a majority of Electoral College votes. Michigan has experienced 0.63 percent job growth since 2020, while Wisconsin and Pennsylvania have experienced 1.75 percent and 1.90 percent job growth, respectively, and find themselves in the bottom half of the performance of all 50 states. Five percent or better job growth, let alone the double-digit job growth of the top 10, is almost exclusively in red non-battleground states.

This cannot be a coincidence. Better economic conditions follow lower regulation and more favorable tax conditions, and out of better economic conditions, one finds robust job creation. The Harris campaign may believe that a 4 percent national unemployment rate is to its advantage and that the lost COVID jobs that are largely coming back should be in its favor. But will voters in Michigan, Wisconsin, and Pennsylvania agree when they have seen virtually no job growth since the beginning of 2020?

If voters do vote with their pocketbooks, the Harris campaign may wish that not only food prices were not up 20 percent over the last few years but also that more Rust Belt states were experiencing the job growth that the voters in Texas, Florida, and Idaho are enjoying.