Job losses continue rising in nearly every state across the country, show new data released Friday by the Bureau of Labor Statistics. Employers have laid off 5.1 million workers since the recession began, and a record 13.2 million workers are now unemployed. Forty-six states saw month-over-month increases in unemployment in March. Only North Dakota and the District of Columbia saw month-over-month decreases in unemployment, while in three states—Georgia, New York, and Rhode Island—unemployment was unchanged. The typical state’s unemployment rate is 3.2 percentage points above where it was in March 2008.
The map below shows cumulative job losses in each state relative to the highest employment level reached since 2000 in each state.
Six states (Illinois, Indiana, Massachusetts, Michigan, Mississippi, and Ohio) never recovered to the peak employment levels of 2000 or 2001, and so job changes are shown relative to that peak. For all other states, job losses are measured to their peak employment in 2007 or 2008 (click on the state to see the month and year of the employment peak). The data behind the figure can be found here.
Michigan continues to have the highest unemployment rate in the nation at 12.6 percent, followed by Oregon (12.1 percent), South Carolina (11.4 percent), California (11.2 percent), North Carolina (10.8 percent), and Rhode Island (10.5 percent). The California and North Carolina rates were the highest on record for those states since the BLS began collecting data in 1976. March’s unemployment rate was above 7 percent in 33 of 50 states as well as in the District of Columbia. Eight states now have unemployment rates at or above 10 percent, and nonfarm payroll employment decreased in all but two states—Mississippi and North Dakota—as well as in the District of Columbia.
The largest cumulative job losses in March occurred in California, where employers laid off 62,100 employees (0.4 percent of their workforce). The sharpest job losses as a percent of the state’s total workforce occurred in North Carolina, where employers laid off 1.0 percent of their employees over the past month, followed by Washington (0.9 percent of their employees), and Idaho and Minnesota, where employers shed 0.86 percent of their workforces.
The American Recovery and Reinvestment Act, or ARRA, was passed in February of this year with the goal of saving or creating 3.5 million jobs over the next two years. One vital part of the recovery package is the federal funds flowing directly to states. These funds—if put to use—will help states address budget shortfalls, avoid cuts in critical public services, and invest in the future of their populations.
Governors in four key states—Alaska, Louisiana, South Carolina, and Texas—have threatened to reject funds from the ARRA. On the surface it may seem as though Alaska, Louisiana, and Texas have not been seriously affected by the economic downturn since their employment situations have not deteriorated to the same extent as other parts of the country. Their relative positions of prosperity, though not significant, may have granted the governors of these states some leeway in their very vocal repudiation of the economic recovery package and rejection of ARRA funds. However, a closer look at these states’ labor market situations reveals that even the states that are best off are doing worse than they were at the start of the current economic recession. And as the recession persists, it is likely that the labor market in these states will feel additional strains due to worsening conditions around the country.
With regard to South Carolina, it is hard to dispute that the state’s economy is in distress. A closer look at its employment situation reveals that South Carolinians are very much feeling the effects of the economic recession and are in dire need of federal assistance.
For the goal of the ARRA to be realized it is critical that states accept the full amount of federal funds allocated to them and make use of the funds in accordance with their designated purpose. In three out of four of the states discussed above, the state legislatures have made progress toward overriding their governors’ decisions. It is critical that these legislatures continue their efforts to secure the federal funds allocated to them. These funds will ease the burdens on their states’ populations as the recession persists, work toward stabilizing the states’ economies, and lay the foundation for economic growth in the future.
In Louisiana, Governor Bobby Jindal has rejected $90 million in federal funds that would have expanded the state’s unemployment insurance benefits. The Emergency Unemployment Compensation, or EUC program, which provides 20 weeks of federally funded unemployment benefits to individuals who have exhausted their state benefits, is one of three provisions included in the economic recovery package aimed at helping unemployed workers. According to projections by the National Employment Law Project released on February 13 of this year, the extension of the EUC program alone would have benefited 24,981 Louisiana residents. At the end of March, Governor Jindal announced further plans to reject federal funds that would go toward expanding health care for the poor and uninsured. He justified his decision by claiming that the state would have been required to provide matching state dollars that it does not have.
At 5.8 percent, Louisiana’s unemployment remains low relative to other parts of the country, but this is almost double the rate of 3.2 percent in July 2006, the month in which the state’s unemployment rate began increasing. Louisiana began losing jobs in July 2005, the month before Hurricane Katrina’s devastation. Since then employers in the state have shed 14,200 workers. On the upside, however, construction jobs in particular have been boosted by rebuilding and have increased by 4.7 percent since March 2008, while total nonfarm payroll jobs increased 0.2 percent year-over-year. While state officials and other interested groups are developing initiatives to adopt the unemployment insurance reforms necessary to qualify for federal incentive funding, nothing has happened yet.
In Alaska, Governor Sarah Palin announced that she would reject $288 million in federal funds for her state, which is nearly a third (30.9 percent) of the total sum allocated to Alaska ($930.7 million). She initially claimed that she would accept funds only for construction projects and would reject all funds designated for other purposes, including education, health care, and labor. Governor Palin justified her decision by claiming that there were too many strings attached to the funds and that she does not want the state to have to keep up the programs once federal funding runs out. According to the Anchorage Daily News, several top Alaskan legislators have said that they are likely to accept at least most of the funds the governor is attempting to reject.
Alaska’s labor market situation has been better than the nation overall, which may have provided Governor Palin with some flexibility in her rejection of the funds. Alaska has lost only 0.5 percent of its jobs since November 2008, the month in which the state began losing jobs, compared to 2.0 percent in the nation as a whole over that same time period. Alaska’s unemployment rate, however, is 8.5 percent, the same as the national average.
Construction jobs in the state have declined only 1.1 percent since March 2008, while manufacturing jobs have declined 2.3 percent year-over-year, compared to 12.5 percent and 9.8 percent, respectively for the nation overall. Total nonfarm payroll jobs have increased in Anchorage, Alaska by 2,600 since February 2008, though the city has lost 0.7 percent of its construction jobs and 0.9 percent of its retail jobs.
In Texas, Governor Rick Perry rejected $556 million in federal funds designated for unemployed workers in Texas, his reason being that there were too many conditions attached to the money. He expressed concern that the funds, if accepted, would place additional burdens on businesses, claiming that they would be required to pay the costs once federal money expires. A report in the Dallas Morning News in March said that 45,000 Texans would be negatively affected by Governor Perry’s decision. However, on April 16, the Texas State Senate gave preliminary approval to legislation that would expand the state’s unemployment program and set the state up to receive the federal funds. The measure still needs to be voted on by the full State Senate and passed before it is sent to the State House.
Texas has a relatively low unemployment rate of 6.5 percent, which is far below the national average of 8.5 percent. The state has lost only 1.7 percent of its jobs since October 2008, the month in which it began losing jobs, compared to 2.4 percent nationwide over the same time period. However, construction jobs in Texas have declined 8.3 percent since March 2008, while manufacturing jobs have declined 5.6 percent year-over-year. In the metropolitan area covering Dallas, Fort Worth, and Arlington, employers have shed 67,300 nonfarm payroll jobs since December 2007. In Houston, Sugarland, and Baytown, employers have cut 31,100 nonfarm payroll jobs.
In South Carolina, Governor Mark Sanford rejected $700 million in federal funds allocated to the state that were designated for education and law enforcement. He declined to use the funds for their intended purposes, proposing instead to spend the money on paying down the state debt. The White House has twice refused his request, and the state legislature has been critical of his position.
Governor Sanford offered a compromise in the face of increased pressure from the White House, state legislatures, and his constituency. He agreed to accept the $700 million in federal funds if the state legislature found other ways to pay off the debt—mainly through the reallocation of state funds. State officials say his compromise proposal could lead to the firing of between 4,000 and 7,500 teachers.
South Carolina’s economy is in worse condition than Louisiana, Alaska, and Texas. The state has the third-highest unemployment rate in the country at 11.4 percent—well above the national average of 8.5 percent. It has also lost 5.2 percent of its jobs since September 2007, the month in which it began losing jobs. Construction jobs have declined 10.6 percent since March 2008, while manufacturing jobs in the state have declined 10.8 percent year-over year.
In the metropolitan area covering Charleston, North Charleston, and Summerville, 7,400 nonfarm payroll jobs have been lost since February 2008. In Columbia, employers have shed 8,400 jobs since February 2008. While state officials and other interested groups are developing initiatives to adopt the unemployment insurance reforms necessary to qualify for federal incentive funding, nothing has happened yet.