Data Wonk

The Republican Love of Big Government

Are Republican states the most socialistic?

By - Jun 6th, 2018 04:53 pm
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Donald Trump. Image from campaign website.

Donald Trump. Image from campaign website.

When I want a guide to the current Republican prescription for economic prosperity, I turn to Rich States Poor States from the American Legislative Exchange Council (ALEC). In the latest edition, Wisconsin state senator and former ALEC National Chairman Leah Vukmir is quoted stressing the influence these state ratings enjoy among Republican legislators:

State policymakers across America depend on Rich States, Poor States to provide an annual report on their current standing in economic competitiveness. Hardworking taxpayers want their states to follow the best policy solutions that will lead to greater economic opportunity for all. This publication provides exactly that roadmap for economic success in the states.

With its Economic Outlook Rank ALEC rates each state’s economic policies. The Outlook is described as “a forward-looking forecast based on the state’s standing (equal-weighted average) in the 15 important state policy variables shown below.” One of those 15 is the number of public employees per 10,000 of population. The higher the ratio of government employees to the overall population the worse a state scores in the ranking, on a scale where 1 is best and 50 is worst.

The implication is that the fewer the number of public employees in a state, the better off a state will be—particularly that the state will be more prosperous without having to support numerous government bureaucrats. Do Republicans actually believe this and act on it?

The notion that hiring people to work for the government in and of itself is harmful has long been a component of standard Republican and conservative dogma. This is reflected in Wisconsin Governor Scott Walker’s practice of promising to create additional private sector jobs, with the emphasis on “private.”

But do states dominated by Republicans follow ALEC’s prescription? To explore this question, I compared the percentage of the population working for the state or local government in each state to the percentage of that state’s 2016 vote for Donald Trump versus Hillary Clinton. Every month, as part of its jobs report, the US Bureau of Labor Statistics publishes its estimates of the number of local, state, and federal employees in each state.

The first graph shows the relationship between Trump support and the number of public sector jobs in states that voted for Clinton in the 2016 election. The trend line is almost perfectly flat, indicating that there is no relationship between the amount of such support and the decision as to how many such employees are needed to best serve the public.

This conclusion is underlined by the coefficient of determination, shown as R2 on the chart. The common interpretation of the coefficient is that it shows the percentage of variation in one variable (the number of public employees) explained by the other variable (the Trump vote). Thus, in states that went Democratic, even though the number of public employees varies considerably from one state to another, that variation has no relationship to the strength of the Democrats.

Trump support vs state and local employees Clinton States

Trump support vs state and local employees Clinton States

With states that voted for Trump, the story is quite different. Statistically, the greater the Trump margin, the larger is the number of public employees. Using the common interpretation of the coefficient of determination, one could say that 41% of the difference in public employees is explained by Republican dominance.

Trump support vs state and local employees Trump States

Trump support vs state and local employees Trump States

It should be emphasized that the relationship is a statistical construct; it does a poor job of predicting public employment at any particular state. Still, in practice, states dominated by Republicans as a whole act contrary to current Republican and conservative dogma. What explains this relationship?

Part of the explanation is the role played by severance taxes on the extraction of natural resources, notably oil and coal. Unlike other state taxes, which fall mostly on state residents and businesses, the burden of a state’s severance taxes falls on consumers wherever the resources are consumed. In effect, residents of a state that funds, say, 20% of its budget using severance taxes, are receiving a 20% discount on the cost of public services.

In the two charts above, states in which severance taxes form at least 5% of total tax revenues, according to the National Conference of State Legislatures, have circles drawn around them. Except for New Mexico, all went for Trump.

The three states with the highest proportion of public employees—Alaska, North Dakota, and Wyoming—are also the three who get over 20% of their taxes through severance. This behavior is perfectly consistent with the standard model of a market economy: if the price of a good or service goes down demand for it goes up.

However, it flies in the face of ALEC’s underlying assumption that more public employees hurt economic competitiveness. If so, why would the states buy more, no matter how low the price?

Eliminating the states where severance taxes play a major role reduces the strength of the relationship between the Trump vote and public employees, dropping the coefficient of determination to 31%. Although lower, this is still a significant relationship, leading to the somewhat ironic conclusion that the most Republican states are the most “socialistic.”

Without going through a state-by-state analysis, one cannot determine other good reasons that the most Republican states have larger bureaucracies. Many of them are rural with small populations; perhaps it takes more employees to service a population that is more spread out. In addition, such states may find it more difficult to contract-out public services, reducing public employee count.

Wisconsin, according to ALEC, has the 15th smallest public employee to population count of all US states. However, when compared only to the states voting for Clinton, Wisconsin falls almost exactly in the middle, with 6.7% compared to an average of 6.6% for the Clinton states.

Asking whether we need more–or fewer–government employees is the wrong question. It leads to bad policy. It short circuits the more basic questions: what is the problem we are trying to solve and which possible solutions are most effective.

Categories: Data Wonk, Politics

15 thoughts on “Data Wonk: The Republican Love of Big Government”

  1. Kevin Baas says:

    “Asking whether we need more–or fewer–government employees is the wrong question. It leads to bad policy. It short circuits the more basic questions: what is the problem we are trying to solve and which possible solutions are most effective.”

    I couldn’t have said it better myself! I’ve always found the big government vs small government “debate” absurd. I mesn, it’s more complicated than that. Like, a LOT more conpoocstdd than that. Like really, you think you can solve all our problems, social, economic, and environmental, by adjusting ONE variable?!? The imaginary world you love in must be amazing.

  2. Kevin Baas says:

    Sorry for all the typos.

  3. Terry says:

    Career Politician Scott Walker loves Big Government so much he has been mooching off it and taxpayers for 28 years now! He sucks off we the people and gets great government subsidized healthcare, benefits, Public housing etc…all while letting the roads go to hell, selling the state off to his Big Corporate campaign donors and defunding education. Walker is a full-time moocher just like welfare queen republican states are moochers.

    Dump Walker 2018

  4. michael says:

    The GOP has changed a lot in the last 20 years too. 20 years ago, they would support a toll road that was designed to break even or even run a modest profit. Since then, they have become total Socialists on infrastructure. Not surprisingly, our roads are starting to look like the USSR.

  5. GEORGE MITCHELL says:

    Setting aside Bruce’s specific methodology, his larger point is spot on. It’s worth noting that Republicans don’t have a monopoly on slogans and messages that reflect a double standard.

  6. frank schneiger says:

    The Republican reactionary right does not hate government per se. It hates government that provides a social safety net and that in any way redistributes income and wealth downward rather than up. Decades ago, the smart reactionaries realized that Americans valued government programs like Social Security and Medicare. So, to deal with this problem, the far right, led by Charles Koch, adopted a strategy of discrediting the government that provided those programs and services. If they couldn’t get them to hate the programs that Americans liked, they would get them to hate the government that delivered them and to neuter the majority of citizens who wanted them.

    So government became evil and incompetent, and businessmen became the source of all wisdom. According to the strategy, taxes were to be described as theft, taking hard-earned dollars from working Americans and giving them to the shiftless and lazy. The strategy was a big success. Just look at the results: world class inequality, corporate plutocracy, a market society instead of a society with a market economy, entrenched poverty, third-world infrastructure, an emerging hereditary elite, the destruction of basic institutions, deep social divisions, often bordering on hatred, and the impending disintegration of Medicare, Medicaid and Social Security.

    All according to plan. None of it is an accident. An interesting book on the subject, “Democracy in Chains” by Nancy MacLean.

  7. Masanja says:

    The article is right. Just come to Wisconsin and see how many political appointees there are. The Department of Administration has Secretary, Deputy Secretary, assistant deputy secretary, Assistant secretary to the deputy assistant secretary, political adviser and assistant political adviser. All these do not have to pass civil service exams. They serve at discretion of the governor.

  8. Troll says:

    Well done. Something to think about. Similar to all these suburban school referendums and Milwaukee does not attempt a school referendum.

  9. GEORGE MITCHELL says:

    MPS tried a referendum in the early 90s. I helped “advance” it. We got slaughtered. Fortunately.

  10. Terry says:

    Dump Trump
    Dump Walker
    Dump ALL lying, cheating, corrupt Big Government republicans in November!!

  11. Thomas says:

    Re Terry’s “DUMP TRUMP … ” people are reluctant to acknowledge that they have been taken by a con-man. Recent polls indicating Trump’s increasing favorable ratings suggest to me that he has conned another 4 or 5% of those who respond to polls in recent months. Those among us who would protest if THE DONALD shot a man to death in cold blood on 5th Avenue in broad daylight, need to find delicate ways of explaining what would be wrong about such a spectacle to those among us who would look the other way. There is so much “looking away” these days …

    Walker cold be easier to dump than Trump. Scott W foolishly promised 250,000 new, private sector jobs by 2014, He has met only four fifths of that promise in 2018, with our state lagging behind most others in job creation and in other economic growth for most of his 7 years + in the governor’s mansion. Those who have “stood with Walker” for all these years could perhaps be persuaded by simple arithmetic that it could be time for them to stand back and look away from a failure. That could be an easier job than getting people to admit that they have been fooled by a con man.

  12. Steve says:

    Another comparison could be gas taxes. Republican s in WI are loath to raise them.
    Recently in Utah I noted (on the pumps that the state tax per gallon was almost
    30 cents per gallon and had been raised the previous year! Then I watched the caravan of 8 mpg giant campers
    (many rentals) plying the highways throughout the state mostly going to National Parks (not the state parks which
    have a lot more Utah license plates). So Utah gets a big pile of revenue, lots of jobs, but its the rest of the country
    (us) doing most of the development, maintenance , and promotion. Not related to nuber of s and l employees, but is a parallel example of the severance tax in that it is paid by outsiders…..

  13. Thomas says:

    Steve,
    appreciate the parallel example you provided in post # 12. It showed how simple arithmetic can validate policies. Sometimes the elaborate graphs that Bruce gives us in his essays inspire us to remember the arithmetic we learned when we were young and encourage us to use that learning when we analyze the efficacy of policies. Do the ma

  14. Thomas says:

    Do the math, and note the evidence of the failures of Walker’s policies.

  15. Terry says:

    Of course Republicans love Big Government! Conservative Republican red states are, and have been for a very long time, by far the BIGGEST MOOCHERS and WELFARE QUEENS in the country! That’s right! All these failing republican states have to be subsidized and propped up by THRIVING PROSPEROUS progressive Democratic blue states!

    http://www.businessinsider.com/red-states-are-welfare-queens-2011-8

    Furthermore, if republicans like Walker really didn’t like Big Government why would he mooch off it for 30 years while trying to have his Big Government take away women’s health care choices and try to force victims of incest and rape to have their sick rapist’s baby? What part of “small limited government” is that? Answer: None!! Why would Walker and republicans attack Americans right to love and marry whoever they want? Is that “small limited government?” Why do they stick their Big Government snouts in our homes and personal lives over cannabis and our own personal health care choices all while taking donations from the rot gut liquor industry? What part of personal freedom and responsibility is that? It’s not! It’s all just more Big Government nanny state control freak Republican lies and bullsh#t!

    Dump Walker 2018!!

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