One version of the median voter theorem holds that the greater the distance between the median voter’s income and the average income of society, the greater is the level of income inequality. This model then assumes the remedy to be redistribution, as if to say the more inequality, the more redistribution there will be. In connection with this, this model asserts that the median voter effectively chooses the size of government because the median voter effectively chooses the tax rate.
As a general model, there would appear to be logic to it. If there is great income inequality, the response will be more government programs that are redistributive in nature, and if there is little inequality government can remain relatively small. This is because in theory there is less of a need for redistribution. This clearly raises some interesting questions in our federal system where we still talk about state economies.
It would then follow that in states where there is little inequality, there would be less of a need for redistribution and where the median voter is likely to favor small government because the median voter in those states is opting for a lower tax rate. Conversely, in states with high levels of inequality, the median voter will favor big government whereby the median voter will opt for higher tax rates. As such, we can already find an explanation for polarization in the median voter theorem itself.
This model would then suggest that in states where there is greater inequality, there will be a greater preference for higher taxes on the wealthy to pay for programs that benefit those who are less well off and especially the poor. We see this in the difference between blue states and red states where income inequality is greater in blue states than in red states.
Therefore, when politicians from blue states call for higher taxes and increased spending on social programs — the hallmarks for many of bigger government — those in red states are less inclined to see these as a necessity. And when elites, who are more likely to be found in blue states, call for increased spending to address rising inequality, workers in red states where it is isn’t as much of a problem are less likely to see redistribution as a remedy for much of anything.
It has been commonplace to assume that the polarization plaguing the nation is ideological, and to a certain extent it is. But the roots of polarization are nonetheless economic. If there is less inequality in red states because their economies and respective labor markets are different, residents of red states have a different prism through which to view policy.
Let’s consider the following: workers in blue states are more educated with advanced degrees from universities. Blue states have fewer workers than do red states whose highest level of educational attainment is only a high school diploma. And yet, red states have more opportunities for skilled blue-collar workers than do blue states. In blue states, there are more unskilled workers than there are in red states.
This means that there is a greater gap between the top and the bottom in blue states than in red states. That there are more educated workers, many of whom make up the managerial/professional elite, in blue states than in red states might well clue us in to why the public in those states has a more liberal outlook than in red states.
If there is less income inequality in red states than in blue states, workers would be less likely to favor a larger government because they would effectively be choosing a lower tax rate. But this would imply a few other things in terms of ideology as well. Workers in red states, and especially if there are more opportunities to be members of the middle class in red states, are likely to place greater weight on self-sufficiency and personal responsibility.
These same workers are less likely to be supportive of social supports because they don’t consider them to be necessary. First of all, the cost of living in red states is lower than in blue states; so there is less of a need for the public subsidy of low wages. Second of all, because there is a lower percentage of unskilled workers in red states than in blue states, there is less downward pressure on wages at the bottom of the income distribution, which is one reason for rising inequality. Another reason for rising inequality is because a larger managerial/professional class at the top of the distribution means there is a larger group to pull the distribution away from the rest. In red states there is less of a managerial/professional class to pull away from the rest.
Many of the ideological differences flow from the basic economic differences. Those who are part of the information tech economy, which has replaced the older manufacturing based economy, are more likely to see themselves as citizens of the world and not feel as threatened by globalization. Therefore, we would expect those in blue states to be more positive towards the idea of open borders and unlimited immigration than might be the case in red states. Similarly, in red states where there is more mining activity than in blue states, workers are not likely to be as supportive of green energy as those in blue states, where there is little, if any, mining activity.
Although more people in red states get a BA degree than in the past, there are still opportunities for those with a high school degree as their highest level of educational attainment. Therefore, they might not see quite the same need for free college as might be the case in blue states. At the same time, if lower levels of income inequality mean that there is a greater sense of personal responsibility along with self-sufficiency, there may also not be as much support for student loan forgiveness.
Those subscribing to personal responsibility may also feel that student loan forgiveness is simply unfair to those who have paid back their student loans. By contrast, those in blue states, because there is greater inequality due to a wider gap between the top and the bottom, may put a higher premium on such policies because they don’t perceive the same opportunities to exist that did in an earlier time.
Because much of the polarization plaguing the nation is rooted in economic differences between very different economies in blue states and red states, it behooves us to get beyond the standard policy approaches offered by conservatives, liberals, and even progressives. These states are simply too divided. Rather a focus on the labor market and restoring the middle class might well be better for unifying. Inequality can better be addressed through a wage policy that lifts wages from the bottom of the distribution up through the middle than redistribution. Our political system can only overcome deep divisions if policy is targeted within universalism. That is, policy is not about helping specific groups which only divide more, but about helping the middle class.