At the second Republican presidential debate late last fall, Sen. Rand Paul (R-KY) created a minor tempest when he charged that the cities with the highest levels of inequality were run by Democratic mayors. While Paul agreed that the gap between the rich and everyone else was widening, he huffed, “I think we ought to look where inequality seems to be the worst. It seems to be worst in cities run by Democrats, governors, of states run by Democrats and counties currently run by Democrats. So the thing is, let’s look for root causes.”
Paul’s numbers, at least with respect to cities, turn out to be basically right, although he also fails to acknowledge that the reason there is so much inequality in these Democratic cities is that they tend to be booming tech hubs where the rich are doing far better than everyone else. But his argument also completely misses the point about why inequality matters.
What matters isn’t so much inequality per se, but its destructive impacts on Americans’ well-being. And in general, the data show that “blue” states are doing a better job of mitigating the negative effects of inequality, with the result that their citizens are far better off than in states where policies are indifferent.
Left unchecked, places with high levels of economic inequality tend to be places where life is harder and shorter. Epidemiologists have long known that places with high levels of economic inequality tend to have lower aggregate life expectancies and higher levels of the social and medical problems that tend to shorten life.
But the data also show that public policies, particularly at the state level, can influence the way economic inequality affects the quality of life in particular places.
Figure 1 shows the relationship between “years of potential life lost,” a common measure of longevity and premature death, and cash assistance paid to the poor in each state generated through state taxes in Fiscal Year 2013.
Source: Author’s calculations based on County Health Rankings & Roadmap Project and National Association of State Budget Officers State Expenditure Report for 2014
The percentage of a state’s general fund, excluding federal contributions for programs such as TANF and Medicaid, dedicated to cash assistance can serve as a rough measure of a state’s social welfare policy. These kinds of payments depend, first of all, on the willingness of state taxpayers to fund such payments and second, they benefit people who tend not to have much political clout. We can assume that the more a state is willing to spend to support the poor, the more it is likely to provide programs, amenities and other support to others higher up on the state’s economic totem pole. Using a percentage tells us how a state prioritizes this kind of program in relation to other spending priorities.
The three lines in Figure 1 show the impact of inequality on years of potential life lost in counties grouped as constituents of high, medium and low spending states. In all three groups, as income inequality increases, so does early mortality.
The striking thing, though, is that income inequality has a much more pronounced effect on counties located in states that provide relatively little cash assistance to the poor (though they may provide assistance in other ways, such as spending on Medicaid). At very low levels of income inequality, state spending makes a difference, but that difference is small. As income inequality increases, though, the number of years of potential lost life increases much faster in low spending states, such as Alabama (0.00% from the state general fund) than it does in high spending states such as New Hampshire and Ohio (4.66% and 0.85%, respectively, of the states’ general funds).
Figure 2 shows that there is a definite partisan pattern to social spending among the states. Of the ten states that provide the greatest percentage of general fund cash assistance to the poor, seven voted for the Democratic presidential candidate in all of the last four presidential elections. Not a single state that consistently voted for the Democratic candidate in the last four presidential cycles was one of the ten states that provided the smallest percentage of cash assistance to the poor. In all, more than 76% of the states that voted for the Democratic presidential candidate in the last four elections were above the median in percentage of general fund cash assistance to the poor.
On the other hand, eight of the states that provided the smallest percentages of general fund cash assistance to the poor voted for the Republican candidate in the last 4 presidential elections. And more than 68% of the states that consistently voted Republican were below the median in terms of cash assistance paid to the poor out of their general funds.
Taken together, Figures 1 and 2 show us first that state policy has a marked impact on longevity, and second, that the states that have the most generous policies, at least with respect to providing cash assistance to the poor, tend to be the states that have consistently voted for Democratic presidential candidates.
Economic inequality is shaping up to be one of the key issues of this presidential cycle, but we need to talk about it in a sensible way. Senator Paul was right to suggest that we need to discuss economic inequality as a “fact on the ground” rather than in the abstract. When we do that, though, it appears that states that tend to vote for Democratic presidential candidates do more to temper the effects of high inequality than do others.