Metropolitan Unemployment America’s Intransigent Problem

The Brookings Institute recently released its quarterly MetroMonitor for the last quarter of 2011.  With headline numbers showing that job gains picking up and the nation’s inflation-corrected GDP growing at 3 percent in the final three months of 2011, it is interesting to see how the economic gains are reflected in the metropolitan data.
Here is a map showing the nation’s 100 largest metropolitan areas divided into quintiles (five brackets of 20 percent each) with the better performing areas in blue dots and the poorer performing areas in orange dots:
Notice that overall economic performance is unevenly distributed across the United States.  The northeastern states seem to be recovering very slowly with the exception of Worcester, MA.  Boston and Hartford are also showing good economic performance, however, these are the exceptions.  Florida is also suffering from poor overall economic performance with the exception of Cape Coral.  Areas in Florida that were hard-hit by the decimation of their real estate markets sill remain economically weak.  Rather surprisingly, the economic climate in the industrial heartland has been strengthening with improvements in  automobile sales, resulting in more jobs for auto workers, including those in Detroit.  California still has the highest proportion of poorly performing metropolitan areas with five of the nations twenty weakest metropolitan economies being found in California.
While the economies of the largest metropolitan areas showed some improvement, some of the gain was in output rather than employment.  Of the 100 metropolitan areas, twenty-seven gained output but lost jobs, particularly in the Great Lakes manufacturing belt, the Intermountain West and Texas.  Between the third and fourth quarter of 2011, the rate of output accelerated in sixty-seven metropolitan areas while job growth accelerated in only fifty-two.  Slowing job growth was noted in thirty-four centers including those that specialize in high technology, the Great Lakes manufacturing belt and five of the six large metropolitan areas in Texas.  This does not particularly bode well for the future.
Let’s look at the employment picture in more detail.  In all of 2011, only twenty-four metropolitan areas gained jobs in every quarter.  Seventy-six of the one hundred areas lost a greater share of jobs after the start of the Great Contraction in the last quarter of 2007 than they did during the first 16 quarters of the three previous recessions.  Four years after the start of the Great Recession, the 100 largest metropolitan areas, in combination, had still lost 5 percent of the jobs that they had at the start of the Great Recession.  By way of comparison, in the four years after the start of the 1981 – 1982 recession, employment had risen by 8 percent, four years after the start of the 1990 – 1991 recession, employment had grown by 2 percent and after the 2001 recession, employment had grown by 0.02 percent in the same time frame.  This shows us how intransigent America’s unemployment issue is this time.
By the fourth quarter of 2011, employment had rebounded from its low point in 94 of the 100 metropolitan areas but only 25 had gained back more than half of the jobs that they lost between their pre-Great Recession employment peak and their post-Great Recession nadir and only five of the 100 had completely recovered all of their job losses.  Metropolitan areas in Texas and those that are centres of either government or high tech industry recovered larger portions of their lost jobs.
What’s interesting to see in this time of massive government debt is rising government employment levels.  In the third quarter of 2011, federal government employment rose in 83 of the 100 metropolitan areas.  State government employment rose in 60 areas.  In contrast, local government job cuts continue with local government employment falling in 55 metropolitan areas indicating that local government jobs cuts are still ongoing as municipalities are forced to cut expenses to balance their budgets.
Overall unemployment in December 2011 was lower on a year-over-year basis in 93 of the 100 largest metropolitan areas with only Chicago, Augusta, Honolulu, Jackson, New York and Raleigh having higher unemployment in December 2011 than they did in December 2010.  That said, all of the 100 largest metropolitan areas had higher unemployment rates in December 2011 than they did at the beginning of the Great Recession in December 2007.  That’s some recovery!
Here’s a listing of the metropolitan areas in the United States that have unemployment rates in excess of 10.5 percent, over 2 percentage points higher than the national average:

In January 2012, out of the 372 metropolitan areas that the Bureau of Labor Statistics samples, 65 or 17.5 percent have U3 unemployment rates in excess of 10.5 percent.  These include large urban centers like  Los Angeles (11.0 percent), Detroit (10.8 percent) and Las Vegas (13.1 percent).  It is surprising to see that unemployment in January 2012 was actually worse in all three of these centers compared to just one month earlier.
Perhaps this chart from the St. Louis Federal Reserve FRED database will help explain the current employment situation in America:

It is quite apparent that, while the total number of hirings is off its lows of 2009, it has not recovered to anything resembling the period before the Great Recession.  In the months before the Great Recession began, employers were hiring between 5 adn 5.5 million workers.  This dropped to a low of 3.7 million in June 2009 and has since recovered to between 4.0 and 4.2 million hires per month.  This is a recovery of only 13.5 percent from the depths of the Great Recession and is roughly 21 percent below the hiring level noted during "normal" periods of economic growth.
All of that said, we can at least be thankful that we aren’t young workers under the age of 25 in Spain who are facing this (see line ES):

While the headline numbers show that the unemployment situation in the United States is improving, the data from FRED, the Bureau of Labor Statistics and the Brookings Institute show that the "recovery" is uneven at best and that some areas of the United States have barely experienced what could be termed an economic turnaround in any sense of the word.

Click HERE to read more of Glen Asher’s columns.

Article viewed on Oye! Times at

Related Articles

Be the first to comment

Leave a Reply

Your email address will not be published.


Confirm you are not a spammer! *