Metro area unemployment: Which states are in reverse? Spotlight Illinois

The U.S. unemployment rate is 4.4 percent, but unemployment varies widely among the nation’s 388 metro areas.

Let’s check out the winners and losers as noted by the Brooking Institute in its report “Metro area unemployment trends buck the national narrative: A story of convergence, not divergence.”

In May 2017, the U.S. unemployment rate dipped to 4.3 percent. That rate varied considerably across the nation’s 388 metropolitan areas, from a low of 1.7 percent in Ames, Iowa to a high of 19.2 percent in El Centro, Calif. (those figures are for April 2017, the latest data available).

The last two times the national unemployment rate was that low were in the late 1990s, and just before the Great Recession in 2007. Compared to those two business cycles, metro areas today are actually more similar in their unemployment rates.

In April 2017, when the U.S. unemployment rate was 4.4 percent, 226 of 388 metro areas had unemployment rates within one percentage point of that benchmark. 100 metro areas had rates below 3.4 percent, and 62 had rates exceeding 5.4 percent.

In April 2007, when the U.S. unemployment rate was 4.5 percent, slightly fewer (217) metro areas had rates around the national average.

But in April 1998, when the U.S. unemployment rate was 4.3 percent, only 153 metro areas had rates within one percentage point of that figure. Many more (159) had rates well below the national average, and several more (76) had rates well above the national average.

Most strikingly, metro areas across the industrial Midwest—in Ohio, Indiana, Michigan, and Wisconsin—have unemployment rates today at least one percentage point lower than in April 2007. In the Milwaukee metro area, the unemployment rate stands at 3.2 percent today, versus 5.3 percent in April 2007. In the Battle Creek, Mich. metro area, it is 3.6 percent, down from 6.8 percent a decade ago. And in the Fort Wayne, Ind., metro area, the unemployment rate has fallen to 2.5 percent, well below its 4.5 percent level in April 2007.

• Illinois has 12 metro areas, none of which have unemployment rates below the national average.

• Illinois worsened between 1998 and 2007 and then again from 2007-2017.

• Neighboring states are all now better than Illinois

With each passing decade, the unemployment situation in Illinois has gotten worse. Indiana and Michigan recovered from the rust belt blowout, but Illinois didn’t.

This is not surprising. The state passed its first budget in three fiscal years, complete with massive tax hikes. The budget is required by Constitution to be balanced, but it isn’t.

An exodus of businesses and private citizens is underway. Reforms are desperately needed but none came with the passage of the budget.