As the Democratic and Republican presidential candidates move to Nevada and South Carolina for the next primary contests, pundits will surely note the demographic differences among the first four states. And justifiably so: Iowa’s and New Hampshire’s voting-age populations are overwhelmingly non-Hispanic white (89 percent and 93 percent, respectively) while Nevada has a large Hispanic voting-age population (24 percent) and South Carolina has a large black voting-age population (26 percent). But it’s also worth noting how different these next two states are economically. If Nevada and South Carolina are not on the complete opposite end of the economic spectrum compared with Iowa and New Hampshire, they’re clearly on the other half.
With anger over the economy defining much of the campaign to date, it’s worth noting the economic success of the first two states to vote in 2016. In December 2015, the last month state-level data were available, the unemployment rate was 3.4 percent in Iowa and 3.1 percent in New Hampshire. Those were the sixth- and fourth-lowest state percentages that month. In stark contrast, the unemployment rate was 6.4 percent in Nevada (48th) and 5.5 percent in South Carolina (38th).
Looking at unemployment rates over the past decade is even more telling. During the Great Recession, the unemployment rate peaked at 6.6 percent in both Iowa and New Hampshire. That’s roughly where Nevada is today and where South Carolina was in June 2015. Furthermore, unemployment went as high as 13.6 percent in Nevada and 11.7 percent in South Carolina. Only four other states had higher peak unemployment rates during the depths of the Great Recession: Alabama (11.9 percent), California (12.2 percent), Michigan (14.9 percent), and Oregon (11.9 percent).
Nevada and South Carolina are also among the bottom 10 states in average weekly earnings. In December 2015, Nevada ($737) and South Carolina ($748) were both more than $100 below the national average ($871). Neither Iowa ($796) nor New Hampshire ($850) were among the top states in average weekly earnings, but the first two primary states were again relatively better situated than the next two.
Nevada and South Carolina are also interesting because of how they got to their current economic situations.
Nevada emerged poorly from the recession in part because the housing market’s boom and bust hit the Silver State harder than any other. At its peak (fourth quarter of 2004), home prices in Nevada were up 34.0 percent compared with the previous year. At the bottom (fourth quarter of 2008), home prices were down 32.0 percent.
And Nevada house prices have still not recovered. As of the third quarter of 2015, prices were down 26.8 percent compared with the first quarter of 2007 (the national housing peak). That was the largest price disparity of any state; the second-largest disparity was in Florida, where house prices were down 21.8 percent compared with the national peak.
South Carolina’s economic trajectory also followed a long trend. The state has a relatively large manufacturing sector, which means in some ways it looks more like Ohio than its southern neighbors Florida and Georgia. Like other manufacturing-dependent states, South Carolina suffered high unemployment before the Great Recession.
Nevada and South Carolina provide an opportunity for the presidential candidates to address deeper economic issues than those found in Iowa and New Hampshire, just as the states are an opportunity to speak to a broader demographic coalition of voters.