The U.S. unemployment rate reached a post — World War II high of 9.7% in 1982. The U.S. Department of Labor's Bureau of Labor Statistics (BLS), which tracks such data in Employment and Earnings (January 2008, http://www.bls.gov/cps/cpsa2007.pdf ), further notes that unemployment remained high at 9.6% in 1983 as a result of the most severe economic recession since the Great Depression of the 1930s. The unemployment rate then dropped, approaching 5% in 1989, but again began increasing, reaching 6.8% in 1991 and rising to 7.5% in 1992. As the economy began to improve, the rate fell to 6.9% in 1993. By 1998 the U.S. unemployment rate had dropped to 4.5% and in 2000 dropped to 4%, the lowest level in three decades.
With a creeping recession, unemployment once again began to rise in early 2001 and rose significantly following the terrorist attacks on the United States on September 11, 2001. In June 2003, 9.4 million people were out of work, and the national unemployment rate spiked to 6%. Between 2003 and early 2007 the unemployment rate generally declined. It then began to rise again in 2007. In January 2008 the unemployment rate was 4.9%. (See Figure 3.1.) The unemployment rate measures people without jobs who are looking for work and thus does not count workers who have lost their jobs and eventually stopped looking for work, such as those who have become discouraged or decided to retire.
FACTORS AFFECTING UNEMPLOYMENT RATES
Where You Live
Unemployment rates in the United States vary from state to state. In December 2007 the unemployment rate nationwide was 5%. (See Table 3.1.) Unemployment rates in some states, however, were at least one percentage point higher, including in Michigan (7.6%), Mississippi (6.8%), South Carolina (6.6%), Alaska (6.5%), California (6.1%), the District of Columbia (6.1%), and Ohio (6.0%). Other states with higher unemployment rates than the nationwide average included Arkansas (5.8%) and Nevada (5.8%).
On the other hand, some states had unemployment rates as much as two percentage points below the national average. Both Idaho and South Dakota had unemployment rates of only 3%. (See Table 3.1.) Wyoming (3.1%), Hawaii (3.2%), Nebraska (3.2%), Utah (3.2%), North Dakota (3.3%), and Virginia (3.5%) had unemployment rates one and a half percentage points or more below the national average. Other states with lower than average unemployment rates included Delaware (3.8%), Iowa (4%), Kansas (4.4%), Maryland (3.8%), Montana (3.6%), New Hampshire (3.6%), New Mexico (3.7%), Texas (4.5%), and Vermont (4%).
Metropolitan areas tend to have lower unemployment rates than states as a whole, indicating that unemployment is a bigger problem in rural areas. For example, notes the BLS in Metropolitan Area Employment and Unemployment: December 2007 (January 29, 2008, http://www.bls.gov/news.release/archives/metro_01292008.pdf ), in
December 2007 Mississippi had a high unemployment rate, at 6.8%; in the Mississippi city of Jackson, however, the unemployment rate was close to the national average, at 5.1%. South Carolina also had a high unemployment rate, at 6.6%, but the unemployment rate in the cities of Charleston (5%) and Greenville (5.5%) were much lower. The same held true in Alaska, where overall the unemployment rate was 6.5%. In Alaska's cities of Anchorage and Fairbanks, however, the unemployment rate was 5.7%, significantly lower than statewide. The exception to this rule is in Michigan. The unemployment rate in that state was 7.6%, but the unemployment rate in its two principal cities, Detroit (8%) and Flint (8.3%), was much higher. This is mainly due to the loss of industrial jobs in these once dominantly industrial cities.
The same pattern of lower unemployment rates in cities holds true for states with low unemployment rates as well. The BLS notes that the unemployment rate in Idaho in December 2007 was a low 3%; the unemployment rates of Boise (2.9%) and Idaho Falls (2.2%) were even lower. In South Dakota the unemployment rate of Rapid City matched that of the state as a whole (3%), but the unemployment rate of Sioux Falls was half a percentage point lower (2.5%). In Wyoming, where the unemployment rate of the state was 3.1%, the unemployment rate in Casper was 2.9%.
Unemployment does not occur evenly in all occupations or sectors of society. Workers under twenty-five years of age are far more likely than older workers to be unemployed. The jobs held by younger workers are often more marginal, younger workers tend to have less education than older workers, and they leave their jobs more often than older workers. In addition, workers under age twenty-five also have less seniority to protect them against layoffs. These workers have less work experience than older workers as well, which can work against them when looking for a new job.
During 2007, for example, as noted by the BLS in Employment and Earnings, the unemployment rate among those sixteen years of age and older was greatest among sixteen- to nineteen-year-olds (15.7% of those in the labor force). It was higher for men in that age group (17.6%) than it was for women (13.8%). In contrast, the unemployment rate for men ages twenty to twenty-four years old was 8.9%, and for men ages twenty-five to fifty-four years it was only 3.7%. The unemployment rate for women ages twenty to twenty-four years was 7.3%, and for those ages twenty-five to fifty-four years it was only 3.8%.
States with unemployment rates significantly different from that of the United States as a whole, December 2007, seasonally adjusted