Metro Job Engines Remain Stalled

by Richard Shearer | August 5, 2011

This morning’s jobs report exceeded the hopes of many, ending a week of rather dismal economic news on a high note. The economy added 117,000 jobs in July. The unemployment rate was 9.1 percent, the same as it was in June according to that month’s revised numbers. While there are probably few occasions that a national unemployment rate of 9.1 percent has seemed like good news, this was one of them.

It’s not “good” news everywhere across the nation, though. The unemployment rate exceeded 9.1 percent in 21 states during the month of June. Jobless rates were highest in those parts of the country hit hardest by the Great Recession: 13.5 percent in Nevada, 12.1 percent in California, 11.1 percent in Florida, and 11.0 percent in Michigan. Those four states alone accounted for 27.1 percent of the nation’s 14.4 million jobless in June (but only 21.6 percent of its workforce).

Of course, unemployment is even more concentrated in the nation’s large metropolitan areas, home to a majority of the nation’s workers and the engines of its economy. The unemployment rate across the nation’s 100 largest metropolitan areas combined reached 9.4 percent in June. Rates exceeded 11 percent in 16 large metro areas, most of them in California and Florida. Interestingly, reducing the jobless rate in each of those 16 places by one percent would lower the nation’s jobless rate by at least 10 basis points, or .1 percent.

But government retrenchment continues to put such improvement further out of reach. Public-sector payrolls dropped in July for the ninth straight month. And seven states made cuts to their unemployment insurance in 2011: Arkansas (where the unemployment rate was 8.6 percent in June of this year), Florida, Illinois (9.7 percent), Indiana (8.5 percent), Michigan, Missouri (9.0 percent), and South Carolina (11.2 percent).

With states cutting back on employment and support to the unemployed out of necessity rather than choice, the responsibility to take action would usually fall to the federal government. But after this week’s deal to raise the debt ceiling, further action seems unlikely. This puts metropolitan areas in an especially tough position. With no support from states or the federal government, how can the pragmatic leaders of these metros move their economies, and the nation’s, forward? 

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