Report | Jobs and Unemployment

Depressed states: Unemployment rate near 20% for some groups

Issue Brief #299

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Recent reports of incremental employment gains should not overshadow the continuing depth of the jobs crisis in America—a crisis whose severity for some groups rivals the magnitude of the Great Depression. For example, unemployment among African Americans in Michigan and Hispanics in Rhode Island has exceeded 20% since 2009. In 17 other states, the African American unemployment rate was at least 15% for most or all of 2010, while at least 15% of Hispanics in Nevada, Connecticut, and California were unemployed in 2010. Whites in California, Michigan, Nevada, Oregon, and Rhode Island are also experiencing unemployment rates of 10% or higher.

These findings highlight that America’s ongoing jobs crisis is unevenly felt. While all demographic groups are hurting, the pain of joblessness is more common among African Americans and Hispanics than whites.

White populations in six states had unemployment rates of 10–14.9% across 2010

Since the start of the Great Recession, white populations in six states have experienced unemployment rates of 10% or higher. These states are California, Kentucky, Michigan, Nevada, Oregon, and Rhode Island (Table 1). (See appendix Table A2 for white unemployment rates for all states.)

The most disturbing trend of white unemployment appears in Nevada. The white unemployment rate in Nevada has exceeded 10% since the second quarter of 2009. For the last three quarters of 2010, the unemployment rate fluctuated between 12.7% and 12.9%. There is no sign that it is declining.

Whites in Michigan and Oregon have also had unemployment rates of 10% or higher since early in 2009. In Oregon the white unemployment rate appears to be holding at just below 11%, but in Michigan it declined from a peak of 12.7% in the last quarter of 2009 to 9.5% in the last quarter of 2010.

The unemployment rate among California and Rhode Island whites did not reach 10% or higher until the end of 2009. Whites in California sustained this level of unemployment throughout 2010. Whites in Rhode Island gained some jobs in the fourth quarter of 2010, when the unemployment rate fell to 9.7%.

Whites in Kentucky had an unemployment rate of 10% or higher from the middle of 2009 to the middle of 2010. Since then, the white unemployment rate in the state has been just below 10%, averaging 9.7% in 2010.

Table 1

Table 1

Hispanic populations in four states had unemployment rates of 15–19.9% across 2010

Sample size limitations restrict data for Hispanics to 15 states. These 15 states, however, contain 85% of the Latino labor force. (See appendix Table A3 for data for all 15 states and the methodology section for more information about the sample size restrictions.)

Most Latino populations, by state, had unemployment rates of 10% or higher for most of 2010. Of the 15 states for which we have Hispanic data, only three—Maryland, New Mexico, and Texas—had an average unemployment rate of less than 10% in 2010 (Table A3 in the appendix). The discussion of Latino unemployment here will be restricted to populations with unemployment rates of 15% or higher.

Hispanics in California, Connecticut, Nevada and Washington had unemployment rates of 15% or higher for most or all of 2010 (Table 2). Latinos in Nevada were worst off. From the third quarter of 2009 to the first quarter of 2010, the Latino unemployment rate in Nevada was 20% or higher. The good news for Latino Nevadans is that their unemployment rate has fallen below 20%; At the end of 2010, the Hispanic unemployment rate in the state was 18.8%, but the downward trend had stalled.

Table 2

Table 2

Connecticut’s Hispanic unemployment rate has trended upward for the past year and a half, and it ended 2010 at 18.2%. California’s Latino unemployment rate has hovered around 15% since the second quarter of 2009. It averaged 15% in 2010. Washington’s Hispanic unemployment rate exceeded 15% in the first half of 2010, but ended the year at 13.5%.

African American populations in five states had unemployment rates of 18–19.9% across 2010

Sample size limitations restrict data for African Americans to 23 states. These 23 states, however, contain 90% of the black labor force. (See appendix Table A4 for data for all 23 states and the methodology section for more information about the sample size restrictions.)

All of the African American populations for which we have data had an average unemployment rate of 10% or higher in 2010. For 17 of the 23 available states, the average unemployment rate was 15% or higher (Table A4). The discussion here, however, will focus only on the states with African American unemployment rates that averaged at least 18% but less than 20% in 2010: California, the District of Columbia, Illinois, Mississippi, and South Carolina (Table 3). Among these states, the black unemployment rate at the end of 2010 was highest in California (19.9%). In comparison, the black unemployment rate in South Carolina exceeded 20% at the end of 2009 but was down to 18.7% at the end of 2010, and averaged 18.6% for all of 2010. The District of Columbia’s black unemployment rate rose steadily from 2008 to 2010 and stopped in the third quarter of 2010 at 18.8% before falling incrementally to 18.7% in the fourth quarter. The black unemployment rates in Illinois and Mississippi were on a downward trend in the first part of 2010, but the decline stalled and may be reversing. In the fourth quarter of 2010, the black unemployment rate in Illinois was 17.8% and in Mississippi, 17.3%.

Table 3

Table 3

Two populations with unemployment rates of 20% or higher

By one estimate, the unemployment rate during the Great Depression peaked at 22.9% in 1932 (Carter 2006). The Great Recession has pushed the unemployment rate for Hispanics in Rhode Island and for blacks in Michigan into this range. The Hispanic unemployment rate in Rhode Island averaged 20% in 2009 and 21.6% in 2010. For African Americans in Michigan, average unemployment was 21.1% in 2009 and 23.4% in 2010 (Figure A).

Figure A

Figure A

Conclusion

The economy has not recovered yet. In many states, Americans are living with extremely high levels of unemployment. Without additional strong and direct job creation efforts by the federal government, certain populations in many states will continue to be burdened by extreme levels of unemployment.

Methodology

Our unemployment rate estimates are derived from both the Local Area Unemployment Statistics (LAUS) and the Current Population Survey (CPS) from the Bureau of Labor Statistics. We derive ratios to the overall unemployment rate by race from rolling six-month intervals of CPS data and apply these ratios to quarterly LAUS data.

In many states, the sample size of the racial groups is not large enough to create an accurate unemployment rate estimate. We only report data for groups which had, on average, a sample size of at least 700 in the labor force for a six-month period. Assuming an unemployment rate of 8%, this results in a margin of error of ±2 percentage points. With an unemployment rate of 20%, the margin of error is ±3 percentage points.

For tables A1-A4, please refer to the original print version of this publication here.

References

Carter, Susan B., et al. 2006. “Table Ba470-477 Labor force, employment, and unemployment: 1890-1990,” in Historical Statistics of the United States: Earliest Times to the Present, Millennial ed., ed. Susan B. Carter, et al., vol. 2, pp. 82-83.  New York: Cambridge University Press.


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