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Cities Where 9% Unemployment Persists: BLS State Unemployment Survey

Douglas A. McIntyre

No one can question that the overall unemployment rate has fallen from a monthly crest of more than 10% at the peak of the recession toward 7% recently. In several states, the figure has dropped below 5%. However, at the other end of the spectrum, the jobless rate remains about 9%, particularly in several large cities.

The areas where unemployment has remained high share one of two features. They were either places where the rise and fall of the real estate markets where fantastic, or ones where old manufacturing industries cratered and will not improve. Whichever is the cause, there is nothing on the horizon that would cause a quick recovery, so the jobless rate in these areas will persist.

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Las Vegas may be the city crushed most by the trend of home overbuilding and then underbuying. The jobless rate for the state of Nevada is 9.5%, with Las Vegas accounting for a large portion of the state's population. After falling over the course of a year, Nevada's rate has been stuck at the present level for three months. Housing data shows that the market has rebounded some but has stayed sharply below 2005 and 2006 boom levels. To put further pressure on employment in the state, the gaming industry may never return to its previous robust health. Too few people have money to gamble, and there are too many places for the few to go to play.

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The employment strength of the manufacturing industry ran across the southern Great Lakes region, from Chicago to Detroit, Toledo, Cleveland, Pittsburgh and Buffalo. Most of these jobs were dependent either directly or indirectly on the car industry, and its shows. Unemployment in the Chicago-Joliet-Naperville area was 9.4% in July. In Detroit-Warren-Livonia, the figure is identical. The only other former industrial region that is close to matching these is New England's old manufacturing center of Rhode Island, where unemployment has lingered at 8.9% for the past three months.

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There is a persistent myth that the jobs recovery has been fairly even, but this is not true. Over the course of the past year, once heavily industrialized Illinois has added 50,500 jobs. Colorado, less than half Illinois's size, has added 63,400. This comparison is not isolated. Michigan added 70,300 jobs in the past year. Washington state, barely two-thirds' Michigan's size, added 64,900.

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The jobs recovery is nothing if uneven.

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