Here's a new Gallup poll on how satisfied people are with their standard of living. Guess which state came out top? Yep, it's the Flickertail state. ... North Dakota also had the nation's lowest unemployment rate last December, 4.4 percent.I'm always interested in state-by-state comparisons, as there is an enormous amount of data available at that level for which relationships are waiting to be discovered and causations to be suggested. So I was eager to find the actual poll and get to work. However, the regulars correlate tepidly with the Gallup measure; with IQ at .40, the percentage of the population having attained a bachelor's degree or higher at .11, average credit score at .45, average monetary standard-of-living (imperfectly) measured by both income and average cost-of-living at .12.
Turns out there's a simpler explanation for the results, and the Derb was intuitively all over it. The share of the SoL-satisfied population inversely correlates with a state's December '09 unemployment rate at a vigorous .78 (p = 0). The poll was based on interviews conducted throughout 2009, after the long-term consequences of the recession had become clear (ie, Phoenix and Las Vegas are not going to be booming again anytime soon). The higher the percentage of people out of work, the lower the statewide level of satisfaction with personal standard-of-livings. The range for the unemployment rate by state is 10.2 percentage points (Michigan on the high-end at 14.6%, North Dakota on the low-end at 4.4%); the range for SoL satisfaction is 13.3 percentage points (North Dakota on the high-end at 82.3%, Nevada on the low-end at 69.0%). It's almost as though we're looking at the same thing measured in a different way.
This is entirely sensible--those who have no steady source of income (government transfers excepted) are virtually guaranteed to be unsatisfied with their abilities to buy and do the things they want to buy and do. I just finished a book by Henry Hazlitt and am now reading Murray Rothbard's America's Great Depression. While I've long since become more inclined toward the Austrian school than any of the other major economic schools of thought, the Austrians' position on the presumed irrelevance of employment levels strikes me as lacking a needed subjectivity (the presence of which otherwise separates the Austrians from others)--unemployed people are unhappy people.
Economic self-sufficiency is an important ingredient in the recipe for enjoying a satisfactory existence. There is much to the argument that giving primacy to the goal of protecting employment leads to retarding effects on technological innovation, and I do not mean to suggest that full employment be perceived as society's ultimate objective.
But this does have obvious implications on immigration policy--expanding the supply of unskilled laborers simultaneously increases the native unemployment rate (bad) and decreases the incentives for innovation (also bad) by reducing the long-term cost savings of mechanized alternatives to menial labor.