The Geography of Unemployment

The U.S. unemployment rate is nearly nine percent but varies widely by gender, race, and also by state and metropolitan region. The unemployment rate is up in 44 of 50 states, according to new BLS estimates released yesterday. Last month, 106 U.S. metros reported jobless rates of 10 percent or more, while 90 had rates below seven percent, according to data from the U.S. Bureau of Labor Statistics.

Greater Detroit posted the highest rate for large regions (those with a million or more people), 14 percent. Ten other regions posted rates in excess of 10 percent. The lowest levels of unemployment were found in greater New Orleans, 3.3 percent and Oklahoma City, 5.6 percent. Greater Portland, Oregon saw the largest jump in its unemployment rate (+6.5 percentage points), followed by greater Charlotte (+6.2 points) and greater Detroit (+6.0 points).

Writing over at Economix, Ed Glaeser previously identified the effects of manufacturing economies and human capital (the share of people with a bachelor's degree or above).on the unemployment rate. But how do these factors and others effect the change in the unemployment rate? So, Charlotta Mellander and I decided to take a look the effects of human capital and the occupational or classstructure on the change in the unemployment rate over the past year or so.

Large increases in regional unemployment are heavily concentrated in regions with a large percentage of working class jobs - that is, jobs in industrial production, transportation, and construction. Working class jobs are significantly correlated with change in the unemployment rate (0.35) 

Regions with higher levels of human capital and higher percentages of the creative class have fared considerably better. Both are negatively and significant correlated with increases in the unemployment rate (the correlation for each being roughly -0.3),

Interestingly enough, regions with large concentrations of low-end, standardized service jobs (like food prep, building maintenance, and personal care services) also fare better than those with large working class concentrations. (The correlation between the change in the unemployment rate and the share of service class jobs is -0.26).

Many service jobs, by their very nature, are less amenable to global competition or to off-shoring. It's hard to out-source the person who cuts your hair, mows your lawn, or takes care of your children or an ailing parent. But these jobs are typically lower-paying and less secure than manufacturing jobs.

Here's a thought: Instead of bemoaning the loss of what were once high-pay, family-supporting manufacturing jobs, why not consider ways to upgrade these jobs that we seem to be retaining and in some cases retaining even during this downturn.