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July 29, 2026Sunlight has written a great deal about New Jersey as the quintessential Blue State, with powerful government unions, big government, and the high taxes to pay for it. We’ve also documented New Jersey’s economic malaise, high debt levels, and the outmigration of wealth and people to other states. A recent study by Unleash Prosperity evaluated the relationship between a state’s politics (Red or Blue) and economic growth, while controlling for other variables (like weather and energy resources) and found that the Bluer the state, the worse the economic growth and the greater the outmigration of people. And the differences are not small, they are large. Sunlight also looked at a recent Reason Foundation report on state debt (New Jersey had the second-highest at $22,968 per resident) and found a lot of Blue-Red similarity. The data is clear: Blue States have lower income growth, higher debt levels, and more outmigration of people. Just like New Jersey.
Politics matter when it comes to economic growth. A group called Unleashing Prosperity has done some excellent analysis on the relative economic performance of Blue States versus Red States. They created a model that looked at how states voted in the three presidential elections in 2000, 2012, and 2024, with 16 states counted as Blue, 24 as Red, and 10 as Swing States.* They also controlled for factors such as energy resources, climate, and “rust belt” status in order to isolate the impact of a state’s political system on personal income growth since 2000. They ask: do politics really matter? The answer was a “resounding ‘yes.'” Overall, the model showed that, other things being equal, “the more Republican the state was, the higher the rate of growth in personal income.”
Red State workers earned a lot more than Blue State workers. Below is the inflation-adjusted change in total personal income from 2000-2024. Red State personal income — that is, what workers actually earned — grew by 71.2% versus Blue States 49.2%. In other words, in the 21st century, Red State workers’ earnings grew by 44.7% more than workers in Blue States. That’s an astounding number.
And people are voting with their feet. It won’t surprise Sunlight’s readers to learn that that income disparity has translated into massive net outmigration from Blue States to Red States. Turns out people want to go where the money is. The chart below shows that from 2000-2025, Blue States have lost over 3.8 million people while Red States have gained over 3 million (and Swing States have gained 800,000).
The conclusion is worth quoting more fully:
Republicans tend to favor lower rates of taxation and are less obsessed with using government to forcibly redistribute income or wealth to lower income individuals. They tend to favor less stringent environmental constraints … [T]hey promote a more vibrant economy that attracts people from areas with greater constraints on human economic behavior. In America’s federal system of government, people vigorously vote with their feet to improve their lives.
Red States also have lower debt per capita. Which brings us to a recent Reason Foundation report that looked at debt per capita in the states. A state’s debt is mainly comprised of unfunded health benefit and pension liabilities and bonded debt. New Jersey has the second-highest debt per capita in the nation at $22,968 per resident. Look at the top six: all Blue States, as are seven of the ten. Note how much of an outlier New Jersey and Connecticut are.
Looking at the ten states with the least debt-per-capita, Reason found that every one of the bottom eight are Red States (and Florida strikes us as a pretty Red state).
The bottom line is that Blue States, with their powerful government unions, big state governments, and high taxes have three things in common: lower income growth, higher debt per capita, and greater outmigration of people. Just like New Jersey.
*Blue States: CA, CT, DE, HI, IL, ME, MD, MA, MN, NJ, NM, NY, OR, RI, VT, and WA. Red States: AL, AK, AZ, AR, GA, ID, IN, KS, KY, LA, MS, MO, MT, NE, NC, ND, OK, SC, SD, TN, TX, UT, WV, and WY. Swing States: CO, FL, IA, MI, NV, NH, OH, PA, VA, and WI.