Before Mitt Romney’s Bain Capital problem was quite so big, we were hearing about a different political minefield the candidate had to manuever. While his campaign is based largely on the country’s economic woes, several GOP governors in swing states were claiming economic success and recovery. By late June, things were coming to a head, as Bloomberg News reported Romney’s team asked Florida Governor Rick Scott to quite down his brags about job creation in the Sunshine State. Wisconsin Governor Scott Walker spent his recall campaign pointing to the state’s recovery, while Virginia Governor Bob McDonnell has launched his own ads showing his state’s progress. Many of these governors were important surrogates for Romney, and articles in the Wall Street Journal, the New York Times and elsewhere focused on the tricky line the candidate would have to walk, acknowledging their success while criticizing the America’s economic state overall.
Not shockingly, the Obama campaign was quick to agree with the governors’ stories-after the Bloomberg story, the president’s team put out a fake memo from Romney asking Scott to stop bragging about Florida’s economy. “Your facts are undermining my contention that Barack Obama is stifling the recovery, which is my whole platform,” it read. “And if you see Governors Kasich, Snyder, Walker and McDonnell, it would be marvelous if you would pass the word along to them too.”
The newscycle quickly moved on, leaving unanswered a significant question: Just how “recovered” are these states?
The answer has important political implications. How people feel about the state of the economy is a major factor in determining their votes. And given the Romney campaign’s ineptitude when it comes to dealing in nuance, figuring out a way to say that Obama’s responsible for the struggling states but not for the recovering ones-well that’s a difficult message to fit in a 30 second ad. Meanwhile, if workers in these states are experiencing some of the same difficulties workers elsewhere face, the Obama’s got a tougher job. While in terms of unemployment rates, Ohio, Indiana, Wisconsin and Virginia all fall below the national average and Florida’s rate is the best it’s been since 2008, there’s more to an economic turnaround than unemployment alone.
To find out just how recovered these states are, I called Doug Hall at the Economic Policy Institute. Hall oversees the Economic Analysis and Research Network, which connects state-level economic think tanks. His answer: it’s complicated.
“It’s very tempting to grab one indicator and sort of focus on that-with the most popular one being employment growth,” he said. “You’ve got to make sure you’re looking at two or three pictures together.”
More measures helped to show why, even if the unemployment rate was looking rosy, workers in several swing states might not be feeling hunky-dory. Some states, for instance, have more difficult path to job creation, depending on how rapidly the population is growing. Hall provided “job deficit” numbers that show the number of jobs states would need to have to keep up with inflation. States like Virginia and Indiana are growing at much faster rates than say Michigan where the growth rate is basically flat. That means while Virginia has almost reached its pre-recession number of jobs, it still has to add hundreds of thousands more two account for population growth. Otherwise, newcomers will still struggle to find work despite the gains.
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Even if a state is adding jobs, however, the quality of those jobs matter, and that picture can be complicated. Median wages in Indiana and Wisconsin have all dropped more than the national average, meaning middle-income workers in those states are watching their earnings decrease more dramatically. In Ohio and Virginia, low-income workers (those in the twentieth percentile of earnings) have seen significant loss in earnings. Ohio is currently third in the country when it comes to low wage erosion, and Virginia isn’t far behind. Michigan, a Democratic-leaning state with a Republican governor, is seeing wages go down more than the national average at both the median and low-income level.
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In Florida and Virginia, the number of workers being paid at or below the minimum wage between 2009 and 2011 has grown at rate dramatically higher than the national average-a sign that many of the jobs getting created aren’t paying enough for people to survive.
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That’s not news that makes workers feel happy about the economic state of things. Meanwhile, even while Florida has seen tremendous growth in employment, its unemployment rate is still above the national average, and the state has among the most unequal distributions of wealth in the country.
While the governors can easily find things to brag about in these states, voters will likely have to be convinced that their state is actually recovering. For many, particularly among middle-class and low-income voters, things may still not be feeling so great.
While economics certainly plays a role in politics, Hall is quick to caution that the policy approach of one governor is rarely changes a state’s fortune. “When push comes to shove,” he says, “the truth is there’s really not a whole lot governors can do, particularly in the short term, to turn around their state economy.”
Still, there were some political battles that seemed to have an impact-in particular, when governors choose to balance budgets through cuts to public workers. Hall pointed to Wisconsin, where the state seemed to be doing better until Governor Scott Walker began a series of public sector cuts. “You could see that Wisconsin was actually on a pretty good path of recovery and then something happened and they sort of headed off in the wrong direction, equally dramatically.” In 2011, while most of the country was adding jobs, the Badger State lost a total of 21,000.
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“There’s no question that that’s an area where the action of governors can have a detrimental impact,” Hall said. “If you’re closing your state’s budget gap by basically downsizing the public sector work force, that’s like drilling holes in your state’s effort to have economic recovery.”
It’s clear that the economic news isn’t quite as rosy in these swing states as their GOP governors (and Barack Obama) might want us to believe-especially for middle class and poor workers.
Ironically, if Romney were more willing to engage on issues like wage erosion or promoting better quality jobs, he might be able to garner some extra votes, from those residents who aren’t exactly feeling “recovered” yet. But given Romney’s constant awkwardness when addressing the working class, I wouldn’t count on it as his top strategy.