The Local Unemployment Crisis

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During 2000, there was a distinct downturn in the economy nationwide, and some communities that were previously lagging fell even further behind. Residents in scores of counties and cities struggled through the year with unemployment rates from 9% to more than 20%. As the nation seems to be headed into recession, and jobs continue to dry up, the areas that are already the worst off will have little chance at improvement.

This study identifies 172 counties and cities (with populations of at least 10,000 people) experiencing unemployment rates that are more than twice the national average. The results of this study are based on annual average unemployment rates for 2000. For the nation as a whole, the unemployment rate in 2000 was 4.0%, down from 4.2% in 1999. In all of the cities cited here, local unemployment rates measured 9.0% or higher.

Since the late 1940's the national annual unemployment rate has averaged over 9% only twice, in 1982 and 1983. Since this time, national unemployment has never averaged above 8%, and has declined each year since 1992. However, conditions now appear to be headed in the opposite direction: between January and June 2001, every month had a higher unemployment rate than the same month in 2000. Even through the extended good economy, the 172 communities reported here could not find a way out of their "localized depression."

Policy Implications
These 172 counties and cities are encountering difficulty keeping many citizens productively employed. For national policymakers, these pockets of economic distress are important. All too often, federal policy takes a one-size-fits-all approach that assumes labor markets across the country are uniform, when in fact they are not. The counties and cities cited here could suffer enormous economic damage if the federal government implements policies that lack the flexibility needed to deal with local or regional economic variations.

Congressional proposals that increase labor costs would have a disproportionate impact in these areas. Likewise, federal policies targeted at boosting employment prospects would be extremely valuable in these counties and cities that need the most help. With any policy, Congress should make sure these communities do not wind up further behind than they already are.