Even as the economy improves, the unemployment rate continues to grow higher and job creation remains a central issue. Not only does unemployment vary widely across cities and regions, certain places have been able to generate many more new jobs than others.
A couple days ago, I posted a chart which compares the ratio of unemployed workers to job openings for America's 50 largest metro areas. It's a pretty good metric of the resilience of job markets in the face of our ongoing employment crisis. The most resilient metros on this score, Greater D.C. and Baltimore, generate about one new job opening for every unemployed person. The least resilient have much higher numbers of unemployed workers for every new opening. In Detroit, the ratio is 18 unemployed workers for each job opening, in Miami its 12 to 1, Las Vegas 8 to 1.
The question becomes: Does this just reflect random, idiosyncratic differences among metros, or might there be more systematic, identifiable factors that distinguish places with more resilient job markets from less resilient ones? To get a handle on this, Charlotta Mellander and I looked at whether and what regional economic factors might affect the ratio of unemployed workers to job openings. (As usual, I point out that our analysis identifies correlation or association between variables and does not in any way imply causality.)
The nature of the job market itself appears to play the most important role. The most highly correlated factor of all was the share of creative class employment (.6). There were also relatively strong correlations for three specific kinds of creative class jobs: science and engineering (.57), legal occupations (.53), and management (.5). We find more moderate correlations for arts, entertainment, and media jobs (.44), computer science and mathematics occupations (.44), and business and finance jobs (.42). Places with more resilient job markets also had higher levels of human capital (.46), measured as the percentage of adults with a bachelor's degree and above. There was no statistically significant association between resilient job markets and health care, education, and architecture and engineering jobs. This is troubling since many believe "meds and eds" jobs to be among the most stable of all as well as being a major source of future employment growth. Job markets in places with higher shares of working class employment were more problematic, the correlation for this variable being negative and significant (.-46).
Not surprisingly, more resilient job markets were also associated with stronger, more higher-paying regional economies. Better ratios of unemployed workers to job openings were associated with higher regional income levels (.58), higher regional wages (.48), and greater regional economic output per person (.45).