Soaring State Job Losses

Forty-eight states lost jobs during December and January and 44 states have now lost jobs year over year compared to January 2008. As readers of this note know, the past eight years has been — by far — the weakest U.S. job market since the mid-1930s. This is now reflected in the states, as shown in these charts.

Even with job gains in most local and state governments, 17 states lost jobs over the past eight years. When government jobs are excluded (almost entirely in local/state agencies for schoolteachers, etc.) 24 states lost jobs in the private sector over the past eight years. Five of the harder-hit states, with budgets devastated (Michigan, Rhode Island…) even lost government jobs over the past eight years. Seasonally adjusted unemployment rates soared by 1 percent or more in 22 states and the District of Columbia in January and rose in every state except in Louisiana, which remains a special case long after Hurricane Katrina.

But, as I’ve noted many times, the unemployment rate is a very misleading indicator of the jobs market.

The worst unemployment rates in January were 11.6 percent in Michigan and 10.4 percent in South Carolina. The Michigan unemployment rate is its worst since May 1984 and the South Carolina rate is its worst since April 1983. But in the eight years ending in May 1984, Michigan’s jobs grew by 2.9 percent even as over the past eight years Michigan has lost an unprecedented 14 percent of its total jobs and 15.6 percent of its private sector jobs – almost one-in-six non-government jobs. South Carolina added 22.4 percent to its job force (yes, 22.4 percent) in the eight years ending in April 1983 but has added only 1.9 percent to its job base over the past 8 years – a record low.

This dismal job performance over recent months, the past year and especially over the past EIGHT years is particularly important to appreciate with the current economic decline still worsening. Households, businesses and government agencies are accustomed to managing through the short ups and downs of normal business cycles, but few Americans have experience with the conditions that have already confronted many states over the past eight years.

Views expressed on this page are those of the authors and not necessarily those of Campaign for America's Future or Institute for America's Future