Caleb’s Concepts: Politicians don’t impact Watauga’s economy

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Caleb Garbuio, Editorial Page Editor

Political branding is trendy. Both parties blame each other for the faults of our nation and community. When times are good each party takes credit and when times are bad they blame the other.

For example, from 2017 to early 2020 the U.S. experienced high economic growth. Republicans quickly attributed the economy to Trump, while Democrats claimed that Trump benefited from Obama’s policies. Now, in the middle of a recession, Democrats blame Trump’s handling of COVID-19 while Republicans point out that the economic slowdown occurred after states run by Democrats deliberately shut down the economy. 

With all this political tribalism I decided to test both hypotheses in Watauga County to end the debate once and for all as to which party is correlated with economic growth. I ran a multivariate regression model to determine which political party both domestic and nationally, is correlated with economic growth. To do this I relied on 15 years’ worth of Watauga County employment data provided by the North Carolina Commerce. The data included total number of jobs per quarter, real wages and number of establishments, or per quarter means the total number of people employed within Watauga quarterly, the growth in wages excluding inflation and how many businesses are operational. 

Since the data did not include political and policy data, I had to input it to the dataset. I relied on binary variables to test the relationship Republicans and Democrats had on the economy. A binary variable represents two choices one and zero. For example, say you want to determine male and female health differences. You would use a one for male or female and a zero for the opposite gender. In this analysis, I used a one for a Democrat and zero for Republican for which party controlled North Carolina and the U.S. This means that the model would determine the impact that Democratic candidates had on the local economy. Since recessions are out of politicians’ control, I used binary variables to control for recession. A one represented a recession period, while a zero meant no recession. After running the regression on R, several things stuck out.

For starters, the data suggests that both Democrat presidents and governors negatively impact the local economy. For example, during a Democrat president, there we are 99% certain that there will be 2,266 less jobs in the economy than when a Republican is in control. The regression model suggests that there is a 96% chance that 813 jobs will be lost when Democrats control North Carolina. Therefore, it would seem that Republicans benefit Watauga more than Democrats, right?

The answer is more complicated than a numerical calculation. Remember how we talked about recessions? According to the model, we are only 51% sure that recessions will reduce employment by 257 jobs. We all know that recessions cause job loss, then how come there is uncertainty about their impact? It is highly unlikely that Democrats caused more job loss in Watauga than the Great Recession and COVID-19. 

Additionally, economics are far more complicated than executive control. For example, many policies are enacted by the legislative branch, not the executive. Thus, we left out variables that could explain the loss in jobs, since dependent variables are often correlated. For example, if a Republican controlled Congress passed a law that hurt the local economy under a Democrat president’s tenure. Since these variables weren’t accounted for, the model includes this factor into the presidential and gubernatorial one. Therefore, the results are biased.

So what could cause such a reduction in jobs during Democratic tenure. Likely student attendance. Remember the Center of Commerce only included Real Wages, Establishments and Employment. It neglected to specify the types of employment. For example, there is a significant difference between full employment, part time and temporary work. Students are temporary workers because they usually only work during the school year. This means that when they are home, they are not working in Watauga. Since Democrats have held office for longer periods of time than Republicans both domestically and nationally, they bear the brunt of the student impact.