Unemployment's Geography

The unemployment rate surged to 9.4 percent today. But unemployment continues to fall heavily on certain demographic and class groups and in certain cities and regions of the country, according to the latest figures from the Bureau of Labor Statistics.

Greater Detroit still posts the highest rate for large regions (those with a million or more people), 13.6 percent, down from 14 percent in March. Los Angeles, Tampa Bay, Las Vegas, and San Jose also have rates above 10 percent. Greater Portland, Oregon saw the largest jump in its unemployment rate (+6.9 percentage points), followed by Detroit (+6.6 points) and greater Charlotte (+6.4 points). Iowa City (3.2 percent), Des Moines (4.6 percent), and Salt Lake City (five percent) post the lowest unemployment rates.

Ryan Avent notes the resilience of Washington, D.C. and of the Bos-Wash mega-region across the board as well as college towns. He also points to the surprising strength of the "eastern Rust Belt" especially Buffalo, Scranton, Syracuse, and Pittsburgh. These places all  experienced the kind of hit Detroit is taking today roughly a generation ago. They have had time to stabilize the economic trauma and to begin to rebuild around universities, heath care, technology, and creative industries. 

Large increases in regional unemployment remain heavily concentrated in regions with large fractions of blue-collar working class jobs. The change in unemployment from April '08 to April '09 is closely correlated (0.39) with the regional concentration of working class jobs - that is, jobs in industrial production, transportation, and construction, according to an analysis by my colleague Charlotta Mellander.

Regions with higher levels of the creative class and higher levels of human capital have fared much better. (Year-over-year, change in unemployment is negatively correlated with both the creative class, -0.29, and human capital levels, -0.35, the percentage of adults with at least a bachelor's degree).

Unemployment does not appear to be related to regional income levels (the correlation between the two is insignificant). And it tends to fall more heavily on regions with higher housing prices (with a significant positive correlation between the two of 0.18) - perhaps an artifact of the bubble.

Interestingly, regions with large concentrations of lower-end service jobs (like food prep, building maintenance, and personal care services, which are typically seen as the worst and least secure kinds of jobs) are holding up much better than those with large working class concentrations. (Change in unemployment is negatively correlated, -0.29,  with large concentrations of these standardized service jobs).

Seems to me, we'd be much better off developing new strategies to improve wages and working conditions in this sector - by say speeding the dissemination of better management models and improving innovation and productivity - instead of bemoaning the loss of blue-collar jobs or, worse yet, bailing out failed manufacturing firms.