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Which Cities Have the Least Bad Unemployment Rates?

Which Cities Have the Least Bad Unemployment Rates?

By Brandon Ott - July 16, 2009

To those living in California and Florida, reports of lost jobs and rising unemployment do not come as a surprise. But job losses have not been nearly as bad in Texas. What gives?

A recent study by the Brookings Institute examined the economic health of the 100 largest metropolitan areas based on a variety of factors including employment, unemployment, wages, housing prices, output and foreclosures. Together, these areas contain two-thirds of the nation's jobs and produce three-quarters of its GDP.

In Depth: Top 10 Cities with the Least Bad Unemployment Rates

The Brookings report found that the recession has hit certain areas much harder than others - espeically with regards to employment and unemployment. Employment and unemployment are different statistics, but measure similar things. Employment is the number of jobs in given area. Unemployment is the percentage of the total labor force that is jobless but actively seeking employment and willing to work.

All 100 areas surveyed by Brookings lost jobs from their peak quarter to the first quarter of 2009. Furthermore, these areas have undergone an overall employment decline of 2.7%, compared with a national average of 2.9%.

States that were most exposed to the housing market-Arizona, California, Florida and Nevada-and areas that relied heavily on the tourism industry-Las Vegas, Nevada, and Orlando and Bradenton, Florida- experienced severe declines in employment. In fact, ten of the 15 areas with the largest job losses from their peak employment are located, not surprisingly, in California, Florida and Ohio, due to its reliance on the manufacturing and the automotive sectors. Most striking, however, is that these three states, along with Michigan and Nevada, account for 19 of the 20 worst performing areas in the Brookings study. As an example, Detroit, the iconic home of the nation's automobile industry, is 98th and 100th, respectively, in job losses from its peak employment and from the last quarter of 2008 to the first quarter of 2009.

On the other hand, areas that had a higher concentration of jobs in the educational, governmental and healthcare professions, such as Boston, Washington, D.C., New Haven, CT, respectively, avoided such dramatic changes in the job market. Texas, the Plain states, the Mississippi River Valley and the New York area also have suffered less than most metropolitan areas, experiencing an employment loss of less than one percent. In the most recent quarter, many cities in these areas witnessed job losses of less than one percent. In fact, two such areas, New Haven and McAllen, Texas, have even seen employment rise, though only by 0.2%.

Another indication of the disparate nature of the economic recession is the timing of job losses. Half of the 100 largest metropolitan areas reached peak employment between April and June of 2007 and January and March of 2008. More fortunate areas, like Austin and Omaha, didn't see job losses until the first quarter of this year. Conversely, Modesto, California and Detroit, began to see a dip in jobs in 2004.

Though unemployment varies widely by state, all 100 metropolitan areas have seen a rise in the ranks of the unemployed.

In March 2009, Provo, Utah saw the nation's lowest unemployment rate at 5.1% and Modesto, California had the highest at 17.5%. Moreover, five of the six worst unemployment rates are located in California. Similarly, from March 2008 to March 2009, ten of the 15 areas with the largest change in the unemployment rate were located in California and Florida.

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Brandon Ott

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