Cities Where People Can't Find Work
Jan 25th 2013 5:46AM
Despite many in the United States still feeling the pinch, there's no denying that the job market is improving. Last week, the number of Americans seeking unemployment benefits fell to a five-year low of 330,000. The current unemployment rate, five years after the start of the Great Recession, was 7.8% last month. At the height of the recession, it was 10%.
Despite the fact the general job market is improving, the unemployment rate in certain metro areas continue to be awful. Based on the latest data available from the Bureau of Labor Statistics, 24/7 Wall St. reviewed the 10 metro areas with the highest unemployment rates in the country.
Two of the cities on this list, Atlantic City, New Jersey, and Ocean City, New Jersey, were in the path of Superstorm Sandy, which hit at the end of October of last year. Unemployment skyrocketed in November in both cities. In Ocean City, the jobless rate jumped from 11.8% in October to 14.5% in November.
While some of this jump may be the result of the storm preventing accurate data collection, BLS economist Tom Krolik explained that the responses in their monthly survey were sufficient enough to conclude that the increase in unemployment was a real one. The increase was likely caused by the storm itself closing down businesses at least temporarily and in many cases for the long term. "If you want to attribute the increase in Atlantic City-Hammonton to any one thing" Krolik added, "it would be the impact of the storm."
Krolik told 24/7 Wall St. that a short-term jump in unemployment was a common trend in disaster affected areas. Once the rebuilding process has had a chance to work, unemployment would likely decline.
While this may be good news for the long-term prospects of such cities, there is also bad news. Unemployment has been extremely high in the area long before the recession hit. In When 24/7 Wall St. last spoke to BLS chief regional economist Martin Kohli he explained that the Atlantic CIty economy was in bad shape long before Sandy hit the coast. One of the reasons for this, according to Kohli, was the state's gaming industry, which was hit hard by the recession, and has recovered slowly.
The remaining metropolitan areas with high unemployment are located in southern or central California, or southern Arizona. These areas, unlike the New Jersey cities, have low income populations and extremely high poverty rates. In El Centro, California, which had the second-highest unemployment rate in the country of 27.5% in November, more than one quarter of the population is living below the poverty line.
According to Krolik, one of the characteristics that distinguishes these areas from the rest of the country is their disproportionately rural populations and the high proportion of people employed in the highly seasonal agriculture sector. In five of these regions, more than 10% of the working population was employed in the industry, compared to the less than 2% of workers nationwide. In Visalia-Porterville, California, which had an unemployment rate of 14.5% in November, close to one out of every five jobs was in agriculture at the most recent Census count.
Based on the latest monthly data collected by the Bureau of Labor Statistics for November, 2012 - the most recent month of available data by metropolitan statistical area - 24/7 Wall St. identified the 10 metropolitan statistical areas with the highest unemployment rates. We also included U.S. Census Bureau data for poverty, income, high school and college attainment levels, and employment by sector, all from 2011.
10. Stockton, Calif. (Alex)
> Unemployment: 14.1%
> 12-month unemployment change: -1.7 percentage points
> Pct. below poverty line: 18.1%
Although Stockton's unemployment rate of 14.1% in November was 1.7 percentage points lower than it was a year before, it was still among the highest in the U.S. The city's economy continues to struggle and it still had yet to recover many of the jobs lost during the recession. In June 2012, unable to eliminate a $26 million budget deficit, Stockton become the largest city in U.S. history to file for bankruptcy. In recent years, Stockton had cut much of its police force in an attempt to balance its budgets even though it had the nation's third-highest violent crime rate of 821 such crimes per 100,000 residents in 2011.
9. Fresno, Calif. (SAM)
> Unemployment: 14.4%
> 12-month unemployment change: -1.4 percentage points
> Pct. below poverty line: 25.8%
Fresno's unemployment rate of 14.4% in November 2012 may be getting worse. California's Employment Development Department said last week that Fresno County's unemployment rate rose to 14.9% in December. The heavy job losses took place primarily in the agricultural packing houses sector, a seasonal trend that affects Fresno annually. However, many jobs were lost also in the government and construction sectors. The unemployment rate in the Fresno area is down significantly from the 15.8% back in November of 2011. Although some of the job growth has occurred in low-paying fields such as retail, the area has also seen growth in the higher-paying professional and business services category of jobs.
8. Visalia-Porterville, Calif.
> Unemployment: 14.5% (tied-5th lowest)
> 12-month unemployment change: -0.9 percentage points
> Pct. below poverty line: 25.7%
Visalia-Porterville, also located in the San Joaquin Valley, is one of four metropolitan areas to have an unemployment rate of 14.5%, one the highest rates in the country. The severe unemployment situation has led to depressed income for the area. The median household income of $41,167 in 2011 was more than $9,000 below the national median. Nearly 26% of the metro's population lived below the poverty line, about 10 percentage points higher than the national poverty rate. Nearly 19% of those employed work in the agriculture sector, more than any other metro area in the U.S., which means rapid and extreme changes in seasonal employment.
7. Ocean City, N.J.
> Unemployment: 14.5% (tied-5th lowest)
> 12-month unemployment change: 0.5 percentage points
> Pct. below poverty line: 11.4%
Ocean City, a popular resort community on the Jersey Shore, became inaccessible after Superstorm Sandy, leading to a temporary - and in some cases, permanent - shutdown of the businesses located in the area. This led to a temporary spike in unemployment in the region, which was high enough already. The unemployment rate between November 2011 and November 2012 grew a half a percentage point to 14.5%, the fifth-largest unemployment growth among all metro areas. Fortunately, Ocean City officials said that most of the businesses were up and running again by December, with many actually reporting stronger sales than usual.
6. Modesto, Calif.
> Unemployment: 14.5% (tied-5th lowest)
> 12-month unemployment change: -1.1 percentage points
> Pct. below poverty line: 23.8%
At 14.5%, Modesto's unemployment rate in November 2012 was actually 1.1 percentage lower than in November of 2011. Despite this decline, Modesto has yet to recover most of the jobs lost during the recession. One major problem is that seasonal increases in manufacturing employment have become less pronounced in recent years than they were in the past. In addition to the lack of job growth, Modesto had one of the highest poverty rates of any metropolitan area in 2011, at 23.8%. An AP report highlights the lack of diversity in the economy of California's Central Valley, in which Modesto is located. The report notes there are not enough available jobs outside of agriculture, and that many residents lack the skills that are attractive to companies.
5. Atlantic City-Hammonton, N.J.
> Unemployment: 14.5% (tied-5th lowest)
> 12-month unemployment change: 2.2 percentage points
> Pct. below poverty line: 13.4%
Closed casinos and declining tourism hit Atlantic City hard following Superstorm Sandy, leading to a temporary surge in unemployment. The jobless rate in the metropolitan area rose 2.2 percentage points between November 2011 and November 2012, the highest unemployment rate growth of all U.S. metropolitan areas. Most of that jump in unemployment took place in the last month of that year due to the storm. Government officials and employment experts note that Atlantic City's unemployment may go down in the coming months as construction workers flock to the area to rebuild after Sandy, which in turn could give the gaming industry a much-needed boost. The downside is many of these workers could come from out of state and may not stay in the area long-term.
4. Merced, Calif.
> Unemployment: 15.7%
> 12-month unemployment change: -0.7 percentage points
> Pct. below poverty line: 27.4%
Although Merced's unemployment rate had fallen by 0.7 percentage points over the twelve months ending in November, at 15.7% its rate was still the fourth-highest among all U.S. metro areas. According to the San Francisco Chronicle, the Merced area, "historically has had a high unemployment rate because of seasonal employment swings in agriculture and a poorly educated population." Many residents in Merced also lack a formal education. As of 2011, just 65.2% of the area's residents had at least a high school diploma versus 85.9% for the U.S. as a whole.
3. Yuba City, Calif.
> Unemployment: 15.8%
> 12-month unemployment change: -0.8 percentage points
> Pct. below poverty line: 16.3%
Like many of the metropolitan areas with very high unemployment, Yuba City's economy is very dependent on agriculture. Six percent of the area's labor force works in agriculture, more than three times the proportion nationwide. Although the unemployment rate of 15.8% is still the third highest in the country, it is down from 16.6% in November 2011. One field driving this improvement is construction. According to a recent analysis by the Associated General Contractors of America, construction employment in the metropolitan area rose 24% between August 2011 and August 2012, more than all metro areas in the country.
2. El Centro, Calif. (Alexis)
> Unemployment: 26.6%
> 12-month unemployment change: -2.3 percentage points
> Pct. below poverty line: 26.8%
In November 2011, El Centro had an unemployment rate of 28.9%, then the highest of any metropolitan area in the U.S. Twelve months later, El Centro's unemployment rate was still the nation's second-highest, at 26.6%. Worse, because much of the area's employment is seasonal, the unemployment rate has, since 2009, exceeded 30% in the late summer months. Without steady jobs, many area residents live in poverty. As of 2011, 26.8% of people in El Centro lived below the poverty line, one of the highest rates among all metropolitan areas and more than 10 percentage points above the 15.9% figure for the U.S. as a whole.
1. Yuma, Ariz.
> Unemployment: 27.5%
> 12-month unemployment change: 1.2 percentage points
> Pct. below poverty line: 21.8%
No metropolitan area's employment situation is worse off than Yuma, which 27.5% of its labor force was considered unemployed in November 2012. This rate could drop in the coming months. Regional leaders point out that the winter months tend to spur employment in fields such as hospitality as people flock to the area to escape the winter cold. They also point out that agriculture jobs tend to be very seasonal in nature, with considerable temporary hiring taking place in the winter months. More than 10% of the metro Yuma labor force works in agriculture compared to just under 2% of the U.S. population as a whole. Much like many other cities with high unemployment rate, the Yuma area's poverty rate is high. In 2011, 21.8% of the area's residents lived below the poverty line, significantly higher than the 15.9% across the country. The median household income was also quite low at $38,390 - more than $12,000 below the national median.
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