The Local Area Unemployment Crisis


The economy continued its nationwide decline in 2001, and many more communities fell further off the pace. Unemployment rose across the country in dozens of counties and cities with unemployment rates from 9% to more than 20%. As the economy continues to struggle toward recovery, jobs are more difficult to come by, and the areas that are already the worst off will have little chance at improvement.

This study identifies 277 counties and cities (each with a population of at least 10,000 people) experiencing unemployment rates that are 9.0% and above, nearly double the national average for 2001. The results of this study are based on annual average unemployment rates for 2001. Comparing 2001 to 2000, an additional 105 counties fell into the "high unemployment" category, with annual unemployment rates of 9.0% or higher. For the nation as a whole, the unemployment rate in 2001 was 4.8%, up substantially from 4.0% in 2000.

Since the late 1940's, the national annual unemployment rate has averaged over 9% only twice, in 1982 and 1983, and has not averaged above 8% since. The national average unemployment rate increased for the first time in nine years between 2000 and 2001, by nearly a full percentage point. Many of the 277 communities listed here could not create jobs during our nation's longest expansion in history, and we now find them falling deeper into "localized depression."

Policy Implications
These 277 counties and cities are encountering difficulties in keeping many citizens productively employed. For national policymakers, these pockets of economic distress are important. All too often, federal policy takes a one-size-fits-all approach that assumes labor markets across the country are uniform, when in fact they are not. The counties and cities cited here could suffer enormous economic damage if the federal government implements policies that lack the flexibility needed to deal with local or regional economic variations.

Congressional proposals that increase labor costs would have a disproportionate impact in these areas. Likewise, federal policies targeted at boosting employment prospects would be extremely valuable in these counties and cities that need the most help. As with any policy, Congress should make sure these communities do not wind up further behind than they already are.