The Economics Behind Senate Dysfunction

Today's impacts from the "equal representation" model in the U.S. Senate

a Lincoln Park Strategies feature

presented by Reality Check on WURD, airs Monday - Thursday, 4-7pm ET, streamed live at WURDradio.com, in Philly on 96.1 FM / 900 AM | #RealityCheck @ellisonreport

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by Stefan Hankin | LP Strategies original | @lpstrategies

At the Constitutional Convention in the summer of 1787, the Constitution’s framers debated the structure of the future legislative branch. The larger states argued for greater representation for themselves, proportional to population size, whereas the smaller states wanted an equal amount of representation for each state. The resulting compromise created the House of Representatives with proportional representation and the Senate with equal representation. Many scholars and citizens alike have expressed concern over present-day use of equal representation in the Senate, as it results in under-representation of individuals in heavily populated areas. Some on social media go so far as to refer to it as a “flaw” in our Constitution.

We take their point, but would categorize equal representation not as a flaw, but rather an intentional design feature adopted in order to achieve compromise. Nonetheless, we are also troubled by the impacts that its current application may have on the future of our country.

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Assigning an equal number of Senators to each state has resulted in under representation of those people living in heavily populated states, and the continued urbanization of the country will only increase this under-representation. David Birdsell, political science professor and dean at Baruch College explains

By 2040, 70 percent of Americans are expected to live in the 15 largest states, which are also home to the overwhelming majority of the 30 largest cities in the country. By extension, 30 percent of Americans will live in the other 35 states. That means that the 70 percent of Americans get all of 30 Senators and 30 percent of Americans get 70 Senators.

The over-representation of rural states that Birdsell describes is not a new phenomenon - it has existed for centuries.

Population over the years

The Senate has always misrepresented the U.S. population and likely will continue to do so, by a slightly increasing percentage, as the population in urban areas continues to grow and the population in rural areas continues to shrink.

In 1850, 70% of the population lived in 13 states (out of the 31 states at the time) and thus held 42% of the Senate seats. That level of representation remained fairly constant through the middle of the 20th century. In 1950, 70% of the population lived in 22 (of 48) states and controlled 46% of the Senate. However, by 2017, 70% of the population lived in 18 (of 50) states, represented by only 36% of the Senate seats. It seems unlikely that the framers of the Constitution would have rethought their compromise had they anticipated the future population shift.  Considering that 46% of the Senate represented 70% of the population at the time the Constitution was written, the framers probably would not have been concerned about 30% of the Senate representing 70% of the population in the future.

However, another factor might have changed their minds: economic output.

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Currently, 70% of Americans live in 15 states, and unsurprisingly, these same 15 most populous states comprise the majority of the U.S. gross domestic product (GDP). In 2017, the 15 states with the highest GDPs generated 69% of the total US GDP. California alone contributed 14% of the US GDP, according to the Census Bureau. Alternatively, the 31% of Americans who are represented by 70 Senators do not live in states that contribute to the US GDP in the same way as their counterparts. Thus, the Senate is not just under-representing populations; the Senate is under-representing populations with greater economic output.

The Constitution’s framers designed the Senate to represent each state equally, and at that time the economic output of the states, grouped by region, was roughly equivalent, as a percentage, to the representation of that region. Arguably, each state and its two Senators had a similar vested interest in the economic outcomes of the country.

Today, there is a much different dynamic at play. In fact, the economic interests of the country overall are vastly underrepresented in today’s Senate. This is not meant as a criticism of the architects of our Constitution. No one in the 1700s could have predicted the Industrial Revolution and the Internet Age. However, we see the challenge ahead of us routed more in the economic representation being out of whack than the representation of citizens being unequal. The people angle has been with us for centuries while the economic angle is a recent phenomenon.

At the time of the Constitutional Convention, the economic output among the 13 colonies was relatively consistent. Looking at the percentage of the real product per capita of the 13 colonies, the region with the highest output was the South, largely due to slave labor.[1] In 1774, New England’s economic output represented 26% of the overall output, and the same area would have held 31% of the seats in the Senate (if the Senate had existed). The Mid-Atlantic region contributed 31% of the economic output with 31% of the seats. The Southern states produced 44% of the economic output with 38% of the seats. The differences between the proportion of economic output of each region of colonies and the proportion of its seats were all within +/- 6%. In contrast, a comparison of these same three regions in 2016 reveals that the differences between the proportion of economic output of each region and the proportion of its Senate seats were as wide as +/- 17%. In 2016, New England’s economic output dropped to only 16%, as the Mid-Atlantic’s rose to 48%, and the South dropped to 36%.  Though each region’s portion of economic contribution has changed since 1774, its number of seats in the Senate remains the same.

1774 Economic Output

Even more striking is a comparison of economic output versus percentage share of Senate seats throughout the entire United States today. In 2016, 15 states generated 69% of the nation’s total economic output, but these states had just 30% of the Senate seats. The 15 states with an intermediate level of economic contribution (between 1% and 1.9% of total GDP) produced 21% of the overall economic output of the country and had a more proportional level of representation in the Senate (30%). The remaining 20 states with the lowest levels of economic contribution (less than 1% of total GDP) produced just 9% of the country’s overall economic output but controlled an incredible 60% of the seats in the Senate.

2016 Output of Original States

Unlike in the 1700s when the economic output was spread out in relative proportion to the representation in the Senate, today the majority of economic output is concentrated in a small number of states. Given the relative recent phenomenon of this disparity, we would argue that many of our political problems (from the dysfunction standpoint) are more rooted in the economic factors as opposed to a straight population issue, as some have suggested.   

2016 Economic Output

Further exacerbating the problem is the partisan make-up of these different economic output groupings. Currently the vast majority of Republican Senators (82%) come from states that each contribute less than 2% of the country’s total GDP. Meanwhile, Democratic Senators are more than twice as likely as their Republican counterparts to represent states generating 2% or more of the total U.S. GDP. Additionally, Democratic senators are much more distributed across the three groups with 43% coming from the 2%+ states, 25% from 1-1.9% states, and 33% from states with less than 1%. Republican senators however are distributed along the following lines respectively: 18%, 35%, 47%.

In the past, economic interests were held relatively evenly between the two main political parties and agreements could be reached. Today that motivation is missing, and the tax bill passed by the GOP in 2017 aggravated the problem given its punitive measures on states that tend to make up higher proportions of the country’s economic output. Our country has changed dramatically since its founding. Institutions and systems that were designed over 240 years ago are now ill-equipped to address a multitude of present-day concerns.

Yet, the under-representation in the Senate of populations generating the most economic output may create some of the biggest problems we will face moving forward as our economy continues to change by leaps and bounds. If we cannot overcome our tribal approach to politics, it is not only going to continue to be bad for our politics, but it will be bad for our country’s economy. Normally that would be enough to force a change, but these are not normal times. 


FOOTNOTES

[1] They were colonies, not states, at the time.

[2] The population is based on estimates from the 1790 census. The populations calculations do not include individuals who were slaves. South Carolina did not submit a full count in 1790, and its totals are estimated.

[3] Note that the 1774 economic output is measured by real product per capita and does not account for the fact that slaves in the South Atlantic largely drove the economy but were not included in the population calculations at the time.


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