Looking through the Department of Labor's statistics on state and local unemployment, I was reminded of an exchange between Paul Ryan and Joe Biden during the recent vice-presidential debate:
RYAN: Joe and I are from similar towns. He's from Scranton, Pennsylvania. I'm from Janesville, Wisconsin. You know what the unemployment rate in Scranton is today?
BIDEN: I sure do.
RYAN: It's 10 percent.
RYAN: You know what it was the day you guys came in? 8.5 percent. That's how it's going all around America.
BIDEN: You don't read the statistics. That's not how it's going. It's going down.
Of course, Biden was right. Just days earlier, the Bureau of Labor Statistics had released its latest jobs report showing the national unemployment rate had fallen 0.3 points to 7.8 percent in September, the lowest level since Barack Obama took office at the height of the financial crisis. If you look at the map below, you see that nearly every county in the United States has reported positive job growth over the last year. Only parts of the Northeast, particularly New York State, stand out as exceptions to the general rule:
Positive employment trends like you see in the map above tend to be more important than the absolute level of employment. But it is worth noting that the employment picture becomes much more complicated when you consider prevailing unemployment rates by county. Recent data suggests that unemployment rates vary significantly across the United States, with many regions continuing to suffer unemployment above ten percent, and as high as fifteen and twenty percent in some counties. The West Coast, Nevada and Arizona remain in particularly bad shape, as do counties in the Great Lakes region, in Florida and the Southeast “Bible Belt,” and in pockets of the Northeast:
Part of the reason for this geographic distribution is historical. Joblessness has always been elevated in certain high-poverty communities, such as the predominantly African American counties in the Southeast. Low income families are traditionally hit the hardest by economic downturns, and often take longest to find new jobs.
Other areas of high unemployment are the result of unique local factors. Many counties in Michigan, for instance, continue to suffer from the collapse of the manufacturing sector. The automobile industry, despite making sizable gains in recent years, still employs about 300,000 fewer manufacturing workers than before the recession.
But perhaps the single greatest contributor to the uneven distribution of job growth is regional differences in the recovery of the housing market. The counties in the map above with unemployment rates “in the red” are the same counties that experienced the highest housing price-to-wage ratios at the peak of the housing bubble in 2005-2006. Other counties, particularly the swath of green throughout the Great Plains, were comparatively unaffected by the housing bubble, and enjoy lower unemployment today as a result.
But for those who continue to live in the former “bubble” communities of California, Florida and elsewhere, trillions in housing equity have been lost. Although recent data suggests the housing market has finally bottomed out and is now rebounding, millions of people remain unemployed whose jobs once depended, directly or indirectly, on the housing and construction sector boom.
The 11 million households still struggling to get out from underwater mortgages—about a quarter of all residential properties—are holding back an economic recovery that has already taken root in much of the country. Unfortunately it seems Congress has settled on maintaining its present course: waiting patiently while the debt works its way through the system, with all the incumbent financial pain that entails.