State Employment — The Rich Get Richer

There has been some hope as unemployment improves nationally that the weakest job markets would outpace the stronger ones. Theses markets would be “catching up” as the tide lifts the entire market for new jobs. Things have not turned out that way. States with low unemployment continue to be the best ones for job creation. States that have had trouble with jobs remain in difficult situations.

New data from Gallup show the trend, state-by-state, of employees who say their employers are hiring compared to cutting jobs. Employees at companies in North Dakota, a state with an unemployment rate below 5% for most of the past three years, said 42% of the places they work are adding jobs, while only 8% said their companies were cutting workers. Iowa, Oklahoma and Utah were next on the positive trends list.

At the bottom of the list of states based on probable job gains and losses according to employee perceptions were Rhode Island, Nevada, New Jersey, New Mexico and Oregon, among others. Each of these has had a high unemployment rate over the course of the recession. Those figures have been in double digits for many months in some cases.

Gallup summarized its analysis of the data:

Five of the nine states with the highest Job Creation Index scores are Midwestern states, including North Dakota, Iowa, Nebraska, Indiana, and South Dakota. The states with the lowest scores are largely a mixture of Eastern (Rhode Island, New Jersey, New Hampshire, and New York) and Western states (Nevada, Oregon, and New Mexico).

The results of the poll once again show the extent to which the jobs problem is local more than national. The states that continue to do well have large energy and agricultural industries. Those still doing poorly are part of the old industrial belt of the U.S. or in areas that went through the real estate bust. Some data show a rebound among American manufacturers, but it is much too weak to make up for the hundreds of thousands of jobs lost. As for the real estate market, it continues to be destroyed by falling home prices and foreclosures.

An argument can be made that if unemployment in the economically strongest states falls below 5%, then across the nation the average may reach below 7%. That would seem to be a real recovery, at least on the surface, but only on the surface. Nevada and Rhode Island will not stage recoveries anytime soon.

Methodology: Results are based on telephone interviews conducted as part of Gallup Daily tracking January to December, 2011, with a random sample of 198,412 employed adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.

Douglas A. McIntyre