After months of attention on Iowa and New Hampshire, the presidential race is at last shifting to two states — Nevada and South Carolina — that are actually experiencing the economic turmoil that has often dominated the campaigns of both parties. The results there might provide a clearer window into which candidates are most successfully tapping into voters’ economic anxieties.
The first two nominating contests played out in states that are, as commentators have repeatedly noted, far whiter than the country as a whole. Less noticed has been that Iowa and New Hampshire are also extremes economically. Both are small, rural and — especially in the case of New Hampshire — relatively wealthy states with strong local economies. Both states have unemployment rates below 3.5 percent, significantly better than the national mark of 4.9 percent. Neither experienced the worst of the Great Recession, and both are among the most equal states in terms of household income.
The next two states on the primary calendar, by contrast, much more closely embody the economic issues that polls show are at the top of voters’ minds. Nevada, where Democrats caucus on Saturday and Republicans on Tuesday, was hit harder by the housing crisis than nearly any other state; six years after the recession ended, it remains mired in a deep economic funk. South Carolina, where Republicans vote on Saturday and Democrats a week later, has experienced economic ups and downs that are less extreme but more representative of the country as a whole: It has made significant economic gains in recent years, but many of its residents continue to struggle.
“These states are better demographic and economic and political bellwethers for the rest of the United States,” said Alan Berube, deputy director of the Metropolitan Policy Program at the Brookings Institution. “They pose much more interesting questions … than either New Hampshire or Iowa did.”
Both parties’ presidential contests have, in different ways, focused on the economy. The Democratic race has centered on issues of inequality, education and Wall Street regulation. Republicans have emphasized immigration, tax reform and the need for faster economic growth overall. Candidates from both parties have talked about stagnant household incomes and the shrinking middle class. But although voters in Iowa and New Hampshire weren’t immune to those concerns, the next two weeks will give the first clear look at how voters in struggling states respond to the candidates’ messages.
South Carolina, in particular, reflects the complex picture of the U.S. recession and recovery. The state lost close to 200,000 jobs in the recession, with the steepest losses coming in the manufacturing and construction sectors. Unemployment in the state neared 12 percent in 2009, higher than the nationwide peak of 10 percent.
South Carolina has since seen a substantial recovery. Unemployment has dropped to 5.5 percent, and employment has surpassed its prerecession peak. But, as in the U.S. as a whole, the rebound has been uneven. The state has regained only a fraction of the tens of thousands of construction jobs lost in the recession, and manufacturing employment, despite strong gains early in the recovery, is also still well below its prior peak. Instead, many of the new jobs have come in service industries, which tend to pay less. Median household income remains thousands of dollars below its prerecession level after adjusting for inflation. Racial disparities remain substantial: The unemployment rate among African-Americans, at 9.9 percent, is more than 2.5 times that of whites, one of the widest gaps in the country.
“Not everybody’s benefiting from [the recovery] for sure, and even if they are there’s anxiety,” said Doug Woodward, an economist at the University of South Carolina. “They’re worried about whether it’s going to last. They’re only just starting to feel it.”
South Carolina is certainly not a perfect representation of the U.S. as a whole. It is poorer than most of the country; South Carolina’s median household income in 2014, at just less than $45,000, ranked above only seven other states. It is also less educated; just over 25 percent of its residents ages 25 and older have at least a bachelor’s degree, ranking it 39th among the states.
Brookings’ Berube said it was a mistake to think of South Carolina as having a single statewide economy. Rather, he said, the state has several regional economies that have followed very different paths in recent years, echoing the uneven nature of the recovery across the country as a whole.
The Charleston area, which boasts a large professional sector, an important port and a healthy tourism industry, has experienced some of the country’s fastest job and income growth over the past five years, according to data assembled by Brookings. On the other end of the state, the Greenville area saw rapid growth early in the recovery due to a revived auto manufacturing sector; manufacturing job growth has slowed over the past year, but the local economy remains reasonably strong.
But Columbia, the state capital and home to the state university’s flagship campus, is struggling because of deep budget cuts. The Columbia area has seen anemic job growth over the past five years, and average wages have fallen. Even worse off are rural counties such as Allendale, Marion and Marlboro, which are dealing with shrinking populations and unemployment rates in the double digits.1
Nevada, too, has some regional variation — Reno is faring better than Las Vegas, for example — but the state’s dominant story is one of a boom-bust cycle that was far more extreme than South Carolina’s. The state economy thrived during the housing boom of the mid-2000s and then came crashing down when the bubble burst. From 2006 through 2010, the state saw its unemployment rate leap from 3.9 percent to 13.7 percent; the construction sector alone lost close to 100,000 jobs.
“Nevada maybe more than any other state rode the ups and downs of the housing market,” said Richard Auxier, a researcher at the Urban Institute.
Nevada has seen some recovery, but it is far from complete. The state’s unemployment rate is down to 6.4 percent but is still higher than that of any state but Alaska and New Mexico; Nevada’s unemployment rate today is nearly as high as Iowa’s was at the peak of the recession. And it would be even higher if thousands of people hadn’t left the labor force entirely. Household incomes haven’t even begun to rebound from the downturn, and despite five years of growth, the economy as a whole remains 7 percent smaller than it was at the end of 2007.2 Las Vegas, by far the state’s biggest metro area, ranks at or near dead last on Brookings’ various measures of economic progress over the past five years.
The transition to more economically troubled states hasn’t led to a dramatic change in the campaign. Still, the shift in the race is significant, at least symbolically. So far, the only voters who have had the chance to have their voices heard have been in states that are, by any standard measure, among the healthiest in the country. The next two weeks will open up that opportunity to a much more representative sample.