At 5.1 percent, America’s unemployment rate is at a welcomed low. Since its peak of nearly 10 percent in 2009, joblessness has fallen steadily, as shown in the graph below. The Federal Reserve indicates that this trend should continue — they predict rates as low as 4.8 percent in 2017. But, with numbers this pretty, you can bet there is more to them than meets the eye.
According to economists and the Congressional Budget Office, quite a bit of “slack” remains in the labor market. In economics, “slack” refers to the number of people looking for work who can’t find a job, as well as people who are not working as many hours as they’d like. Generally speaking, it encompasses all underutilized productive resources. The official unemployment rate only measures the number of people actively seeking a job but unable to find one. So even if 94.9 percent of Americans don’t count as the nation’s ‘unemployed,’ you can bet that many of them are still frustrated with their employment prospects.
Nevertheless, unemployment remains a popular statistic reported by the Bureau of Labor Statistics. The heat map below shows how state unemployment levels compare to one another. Certain regions have very high unemployment rates relative to how the country is faring overall; in many cases, this is due to the specific nuances of their local economies.
A quick glance shows that many of the highest unemployment rates are in the West. California’s unemployment rate is 5.9 percent. Nevada’s is 6.7. New Mexico’s is 6.8. Upon deeper examination it is clear that many state-specific factors influence these high unemployment rates. For California, one obvious culprit is the drought. Given that agriculture accounts for 3 percent of jobs and 80 percent of water usage in California, a lack of rain creates various, multiplying effects.
Without enough water, fruit and vegetables won’t grow and livestock can’t be maintained. While this is obvious enough, there are serious implications. Not only does this mean less produce for the U.S. as a whole, but fewer workers are needed to tend the fields and it is harder for farmers to stay in business.
Detroit and its surrounding cities are another example of how the local economy can influence city-specific unemployment rates. Detroit, at 12.7 percent, has one of the highest unemployment rates in the country. Pontiac, a city very near to Detroit, fares only slightly better at 11.6 percent. These numbers seem counterintuitive given that the state as a whole has an unemployment rate of 5 percent. However, upon examining the history and economic trends of Detroit, they aren’t so surprising after all.
After the 1967 Race Riot, many working class citizens left the city, taking a huge amount of Detroit’s property tax base with them. This was then followed by local government corruption and the fall of the automobile industry, which contributed to the struggling economy. Regions that are repeatedly hit hard, such as Detroit, find it more difficult to recover.
As California and Michigan illustrate, local industries matter. Factors like weather and government can also have disproportionately large effects on economic growth.
Interestingly, though some states fare worse than others, there can be great variation between city-specific unemployment levels. To examine this phenomenon and figure out where it is hardest to find work, the analysts at StartClass and MooseRoots looked at U.S. cities with populations larger than 20k and parsed through the data to find the ones with the highest rates of unemployment.
Despite the high unemployment rates of certain states, there are various reasons to expect continued economic improvement. Two reasons include the government’s investment in both infrastructure and tourism. In 2014, the Department of the Treasury made plans to improve the nation’s infrastructure and, since then, has been working to expand the market — these investments should go a long way in spurring job creation.
Additionally, since Obama launched the National Travel and Tourism Strategy in 2012, the U.S. has seen record numbers of visitors, and they are only forecasted to go up. The increased business that tourism brings will aid the nation’s economic growth, and jobs are sure to follow. So, if you’re looking for work, many signs point upward. You just might want to play it safe and avoid moving to the cities listed below.
10. Pontiac, Michigan
Unemployment rate: 11.60%
9. East St. Louis, Illinois
Unemployment rate: 11.70%
8. Selma, Alabama
Unemployment rate: 11.90%
7. Harvey, Illinois
Unemployment rate: 12.10%
6. Wasco, California
Unemployment rate: 12.30%
5. Detroit, Michigan
Unemployment rate: 12.70%
4. Yuma, Arizona
Unemployment rate: 16.10%
3. El Centro, California
Unemployment rate: 22.10%
2. Brawley, California
Unemployment rate: 25.90%
1. Calexico, California
Unemployment rate: 27.40%