When it comes to unemployment rates, a large improvement can often be misleading. Vast reductions in the rate of unemployment are usually the product of states that had—and still have—the most work to do. And even a large reduction can still leave a significant portion of the workforce without a job in the most troubled states.
Nevada, for instance, has chopped nearly 7 percent off the state unemployment rate since 2010, while North Dakota has barely made a dent—improving its jobless rate by less than 1 percent over the past four years. Though the decline in Nevada’s unemployment rate seems impressive, it’s largely due to the fact that in 2010 the share of unemployed workers in the state hovered at just under 14 percent, while North Dakota’s unemployment rate was only 3.7 percent, leaving little room for a significant drop.
It’s rare that a state with below-average unemployment manages to outperform states that have so much ground to makeup. But in three states that's the case: Idaho, Colorado, and Utah had average unemployment rates at around 8.5 percent in 2010—one percentage point lower than the U.S. average. In the years since, all three have nevertheless seen drastic drops in their unemployment rate, managing to whittle them down by an average of 4.3 percent, while unemployment for the U.S. as a whole has decreased by only 3.6 percent.
So why have these states had so much success when it comes to improving their unemployment rates while others have struggled to make significant change? What can other states learn from their examples?