The Star Beacon; Ashtabula, Ohio

World, nation, state

July 3, 2014

32 states trail U.S. as a whole in job recovery

WASHINGTON — Five years after the Great Recession officially ended, most states still haven’t regained all the jobs they lost, even though the nation as a whole has.

In May, the overall economy finally recovered all 9 million jobs that vanished in the worst downturn since the 1930s. Another month of solid hiring is expected in the U.S. jobs report for June that will be released Thursday.

Yet 32 states still have fewer jobs than when the recession began in December 2007 — evidence of the unevenness and persistently slow pace of the recovery.

Even though economists declared the recession over in June 2009, Illinois is still down 184,000 jobs from pre-recession levels. New Jersey is down 147,000. Both states were hurt by layoffs at factories. Florida is down 170,000 in the aftermath of its real estate market collapse.

The sluggish job market could weigh on voters in some key states when they go to the polls this fall. A Quinnipiac University poll out Wednesday found that voters named the economy by far the biggest problem facing the United States.

The states where hiring lags the most tend to be those that were hit most painfully by the recession: They lost so many jobs that they’ve struggled to replace them all.

Nevada, which suffered a spectacular real estate bust and four years of double-digit unemployment — has fared worst. It has 6 percent fewer jobs than it did in December 2007. Arizona, also slammed by the housing collapse, is 5 percent short.

By contrast, an energy boom has lifted several states to the top of job creation rankings.

“North Dakota is the No. 1 example,” says Dan White, senior economist at Moody’s Analytics. “It’s like its own little gold rush.”

North Dakota has added 100,000 jobs since December 2007 — a stunning 28 percent increase, by far the nation’s highest. The state has benefited from technology that allows energy companies to extract oil from shale, sedimentary rock formed by the compression of clay and silt.

Not surprisingly, the capital of North Dakota, Bismarck, has the lowest unemployment rate of any American city: 2.2 percent as of May.

Mark and Valerie Luna and their eight children had been struggling in Arizona when they heard on television about North Dakota’s prosperity and decided to move there in 2010.

“It was becoming like the Great Depression in Arizona,” Valerie Luna said. “We were tired of seeing our friends lose their houses and their businesses.”

Mark, 40, a laid-off electrician, and Valerie, 37, a corrections officer, immediately found work in North Dakota. He took a job as an electrician, she at an insurance company.

But Mark always had a dream of opening a Mexican restaurant, and Bismarck was ripe for one. Los Lunas Authentic Mexican Food opened last year.

On Wednesday, Mark Luna was busy in the kitchen and had no time for talking. Orders for his homemade tamales, chimichangas, enchiladas were stacking up.

“Business,” he said, “is good. Real good.”

Another state benefiting from the energy boom is Texas, which has added more than 1 million jobs since December 2007, an increase of nearly 10 percent. For comparison, the nation as a whole has added only a net 113,000 jobs over that period.

Jobs in Washington D.C., where lobbying is an all but recession-proof occupation, are up 49,000, or 7 percent. The gain was led by a 10 percent increase in hiring by private employers.

Wall Street’s recovery from the financial crisis has helped New York gain 237,000 jobs since the recession ended, an increase of nearly 3 percent.

Moody’s White says many states are struggling because the recession wiped out solid middle-class jobs — in manufacturing and construction — that haven’t returned. He says it will take a stronger housing recovery to put significantly more people back to work building houses, installing wiring and plumbing and selling furniture and appliances to new owners of homes.

Housing has rebounded somewhat since bottoming a couple of years ago. But the industry’s recovery has slowed. Home construction is running at barely half the pace of the early and mid-2000s. And the United States has lost nearly 1.5 million construction workers since the end of 2007 — a 20 percent plunge. Nevada has lost half its construction workforce.

Factories have added 105,000 jobs over the past year, but manufacturing payrolls remain down 1.6 million, or 12 percent, since the start of the recession. Manufacturing jobs in Michigan hit bottom in June 2009. But the state still has 45,000, or 7 percent, fewer factory workers than it did in December 2007.

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