Print this

Where unemployment has hit hardest the past four years

Dante Chinni

Posted: 12.29.2008 / 10:58 AM PST

The difference between a recession and a depression is easy to recognize: A recession is when your neighbor loses his job; a depression is when you lose yours. Or at least that’s the way the joke goes.

But an analysis of unemployment rates over several years in Patchwork Nation’s 11 community types indicates just how complex joblessness can be.

From October 2006 to October 2008, unemployment numbers increased in all 11 community types – by two percentage points or more in six of those community types. A look at a four-year period – from October 2004 to October 2008 – also shows increases in the jobless rate across the 11 kinds of locales. But those increases are actually smaller. (In 2006, the unemployment rates in the community types were lower than they were in 2004.)

In other reports, Patchwork Nation has measured communities’ distress by a monthly Economic Hardship Index. That measurement focuses on short-term changes – and can overlook incremental changes. Now, by also taking measurements over longer periods, we aim to show how smaller changes have added up over time. Such findings could be key as policymakers decide how to best help struggling communities.

By far the biggest jump in joblessness over the past four years has been in the growing and diversifying “Boom Town” communities. The unemployment rate there climbed 1.7 percentage points to 6.6 percent in 2008. The number is even more dramatic if you go back only two years: Since October 2006, unemployment has climbed 2.7 percentage points.

These statistics speak to the troubles that “Boom Towns” have experienced in the crash of the housing sector. As the construction market cooled, all the things associated with it – from carpentry to electrical work – cooled as well.

Trouble for poorer communities

Three other community types – each with a significant percentage of poor households – may be first in line in looking for help from the incoming Obama administration.

In many ways, heavily African-American counties (our “Minority Central” locales) face the hardest situation. They have the one of the highest overall unemployment numbers – 6.9 percent. And they have seen one of the biggest increases in unemployment from October 2004 to October 2008 – a one percentage-point jump. From October 2006 to October 2008, it’s a two percentage-point jump.

And the forecast for these places looks rough. They have the lowest median household income of any of our community types, and more jobs than average are tied to the ailing manufacturing sector. They also have the lowest percentage of people with a college education – something that increasingly appears to be a prerequisite for success in the new economy.

The situation is similar in communities with large Latino populations (our “Immigration Nation” communities). Their unemployment rate is also 6.9 percent, which represents an increase of almost one percentage point from October 2004. They also have low numbers for college education and household incomes.

The community type that currently has the highest unemployment rate is our “Industrial Metropolis” (counties containing America’s biggest cities). The rate is 7.1 percent – a 0.9 percentage-point increase since October 2004. Cities increasingly pose a complicated challenge because of the wide range of economic situations in them: Their median household income is above the national average, but they have some of the poorest US households and much higher than average poverty rates.

Wealthier locales see big jumps

Communities on the higher end of the income scale, including “Boom Towns,” have likewise seen sharp rises in joblessness.

Also consider the wealthier, better-educated “Monied ’Burb” counties, which saw their unemployment numbers jump a full percentage point from October 2004 to October 2008. The rate is still relatively low – 5.5 percent. But since October 2006, that represents a jump of 1.8 percentage points.

Our “Monied ’Burb” communities have the highest median household income of our 11 community types. So big rises in the unemployment rate in these locales could have much larger implications for the US economy, which is driven by consumer spending.

A map full of political trouble

A look at a US map showing unemployment changes since October 2004 reveals a few bright spots. Take America’s breadbasket. Many of the communities there are rural and farming counties (“Tractor Country” locales) and have not been hit hard by changes in unemployment.

But east of the Mississippi River and west of the Rocky Mountains, the map shows more distress.

Some very populous states are in those areas – Florida, California, Michigan, and Virginia. And in two short years, a lot of congressional seats will be up in these places.

That’s something to keep in mind in the coming months as the politics of the economy play out. Members of Congress may be talking about helping people now or protecting the economic structure for the long term, but 2010 will be on their minds.

Over the coming year, Patchwork Nation will be looking at the different pushes and pulls on various communities as they try to adjust to the new economic reality. The unemployment data presented here gives us a base line as America warily eyes 2009.