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Recession's Impact on States Varies

POSTED: March 12, 2009, 12:00 pm

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Tornadoes are notorious for blanketing an area and striking structures in an erratic fashion, hitting some buildings and missing others. Still, the damage is clear once the twister has vanished. Much of the same is true about the current economic downturn. While the nation as a whole has been affected by the recession, certain states have experienced a steeper decline than other states. Data released by the Bureau of Labor Statistics on regional and state employment for January 2009 paints an ominous picture of the nation’s economy.

In January, 49 states and the District of Columbia recorded over-the-month increases in their unemployment rates. All states, and the District, recorded over-the-year increases in unemployment as well. The largest over the month decreases in employment were in California (79,300), Michigan (60,800), Ohio (59,600) and Texas (50,600). The loss of jobs in California has prompted a state budget crisis that prompted a bitter battle in the state legislature over Governor Schwarzenegger’s proposals to deal with the state deficit. In Michigan, the loss is primarily attributable to the automobile industry and its many suppliers. Michigan also recorded the largest over-the-month percentage decrease in employment at 1.5 percent.

The West and Midwest recorded the highest regional jobless rates, 8.7 and 8.1 percent. The Northeast had the lowest rate, 7.1 percent. The West also had the highest over-the-year rate increase, 3.5 percent. All four regions of the country reported jobless rate increases from over one year ago.

In terms of individual states unemployment numbers, Michigan reported the highest unemployment rate for January 2009, 11.6 percent, followed by South Carolina (10.4 percent), Rhode Island (10.3 percent), and California (10.1 percent). Overall, 13 states and the District of Columbia had significantly higher unemployment rates than the national figure in January. Forty-seven states and the District of Columbia had over-the-month unemployment rate increases. North Carolina and South Carolina reported the largest unemployment rate increases from a year earlier, 4.7 percent each.

In just one month, from December 2008 to January 2009, the recession was taking its toll on many states as their unemployment rate began to creep upward, some faster than others did. California‘s rate increased by 1.4 percent, as did Ohio and Michigan. In terms of over-the-month percentage change, those three states were topped by North Carolina, Oregon and South Carolina.
These numbers are instructive when looking at the loss of jobs in states from over the past year. California led the way, shedding 494,000 jobs. Next, there is Florida with a total job loss over the year at 355,700. Michigan, not surprisingly, was not far behind, having shed 263,000 jobs over the last year. Other states showing significantly large drops in employment were Illinois (175,100), Arizona (166,300), North Carolina (157,500), Georgia (147,800), New York (104,600), Indiana (98,100) and New Jersey (98,100).

These varying snapshots of economic uncertainty paint a picture of areas in distress, at the regional and state level. In years past moving to another state was a reasonable option for individuals seeking better job opportunities. Now, there are literally no states upon which to turn to find some economic relief. Two states, California and Michigan, are facing disaster if some extraordinary measures are not pursued to stem the loss of jobs. With no end in sight to the current downturn, states may be calling upon Washington to provide resources even greater resources than those provided by the economic stimulus legislation.

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