As Employment Surges in Six States, Texas Rules

Six states added, in total, 787,000 jobs during the past year, according to government data for March. This makes them the primary engines of national employment growth over that period. Nearly a third of these jobs were added in Texas, which is a sign that its diverse economy and sheer size make it the envy of other large states.

The six states can be divided into two groups. In one is states that had extremely high unemployment over the course of the recession because of the collapse in housing prices and manufacturing. The other states never had high jobless rates and have recovered from the downturn rapidly.

Here is a quick look at these states and the reasons for their job additions. The numbers are based on a comparison of unemployment in March 2011 and March 2012.

6. Michigan added 56,500 jobs over the period, after a savage downturn in its manufacturing sector. Total jobs in the state have reached 3,982,000 as it tries to offset a loss of work in the auto industry with new jobs from smaller businesses, some of which have relocated to the state. Detroit’s jobless rate remains extremely high and will continue to be a drag on state numbers. The unemployment rate in March was down to 8.5% from 10.5% a year earlier.

5. Ohio added 56,900 jobs, which brought its unemployment rate down from 8.8% to 7.5%. That is below the current national average. Ohio now has an employment base of 5,137,000. The harm done by the loss of manufacturing jobs has been partially reversed by increases in the health care and financial sectors.

4. Florida added 89,800 jobs from March 2011 to March 2012. While the Bureau of Labor Statistics reports that the unemployment rate dropped from 10.7% to 9%, it is still well above the national average. Florida has 7,328,700 full-time workers. A decrease in construction work has been offset to some extent by agricultural, financial services and public utilities jobs.

3. New York added 155,300 jobs. Upstate, the manufacturing sector was hurt, which increased unemployment in formerly large cities such as Buffalo, Rochester and Syracuse. But the relative strength of the New York City economy, as well as the modest stability of financial services jobs there, helped keep the economy steady. Unemployment never got terribly high in New York State. Unemployment fell from 8.5% to 8% over the measurement period. Businesses in New York employed 8,804,700 people in March.

2. California’s diverse economy, and its place as the largest state by population, could not keep it from being one of the states hardest hit by the recession. It added 181,000 jobs, a very modest number given its size. In March, the state had 14,237,300 and an unemployment rate of 11%, down from 11.9% a year earlier. Jobs gains in tech barely offset the huge drop in construction jobs and work in the public sector. Unemployment in some of the cities in the central part of the state, which includes Stockton, are still well above 15%.

1. Texas added 245,700 jobs from March to March, and its unemployment rate dropped to 7% from 8%. Texas had a full-time employment level of 10,741,700 in March. Job losses in the south near the border were more than offset by tech jobs and employment aided by the surge in energy prices. A number of multinationals, which include AT&T (NYSE: T), Texas Instruments (NASDAQ: TXN) and Dell (NASDAQ: DELL), keep their headquarters in Texas. The diversity of the state economy is helped by the state’s extremely low tax base.

Low taxes + high diversity= low unemployment.

Douglas A. McIntyre