unemployment

Unemployment: The State of the Economy

Let me start this post by saying how grateful I am to be employed. Although I am staring into the eyes of retirement, I feel blessed to have a job to retire from. However, this is not everyone’s story. There are many who are experiencing unemployment and are not as fortunate to be working.

As the United States experiences the ebbs and flows of the economy since the onset of the Covid pandemic, so has it been for unemployment. Unemployment rose in 2020, as the country battled the pandemic. Total civilian employment fell by 8.8 million over the year, as the COVID-19 pandemic brought the economic expansion to a sudden halt, taking a tremendous toll on the U.S. labor market.

One of the main indicators of the state of the United States economy is the unemployment rate. The unemployment rate is reported every month by the U.S. Bureau of Labor Statistics (BLS).

The unemployment rate is not only a measure of the economy’s strength but also a measure of the overall happiness and well-being of U.S. citizens. Long-term unemployment is a burden for many and can cause financial, emotional, and psychological ruin. For example, a person’s ability to provide for themselves and their family, pay their bills, and contribute to society are key factors in maintaining a happy life and cultural well-being. To me, unemployment is unemployment, no matter how you look at it. What I found through my research on joblessness is that there are various categories of unemployment –types that could occur at different times. Let’s look at them to get a better understanding.

Types of Unemployment

There are three types of unemployment, all of which help explain why there is unemployment at any given time.

(1) Frictional unemployment is caused by temporary transitions people make when moving to a new location, entering or re-entering the workforce, or switching from one job to another in search of better pay or a better fit for their skills. Frictional unemployment is also caused by employers laying off or hesitating to hire employees for reasons unrelated to the economy.

(2) Structural unemployment happens when there is a mismatch in the demographic or industrial composition of a local economy. This happens when new technology causes a decline in older industries, which must then lay off workers to stay competitive. Outsourcing is also a part of structural unemployment.

(3) Cyclical unemployment occurs when there is not enough demand for goods and services in the economy at large to provide jobs for everyone. This is a natural result of capitalism.

And here we are. It is my current belief that all three of these situations are occurring in the United States, and probably globally, at the same time. Although Covid-19 mandates are fading away and businesses are reopening, workers still aren’t flocking back to offices and unemployment is double the U.S. average, and the economic pain persists.

So, I ask, “How do major cities like Washington, D.C. and New York fare with employment and unemployment?”

Washington, D.C.

According to the District of Columbia’s Department of Employment Services (DOES), in January 2022, the number of unemployed in our nation’s capital was 36,000, and the unemployment rate was 8.8 percent. The number of employed District residents increased by 700, from 365,100 in June 2022 to 365,800 in July 2022. The civilian labor force for the District decreased by 700 from 386,300 in June 2022 to 385,600 in July 2022. The labor force participation rate increased by 0.1 percentage point from 72.9 percent in June 2022 to 73.0 percent in July 2022.

Below is a breakdown of D.C.’s labor force, employment/unemployment, and unemployment rate by Ward:

Despite how the economy may look to the naked eye, the District of Columbia employment is resurging; “DC is open, and employers are hiring,” said DOES Director Dr. Unique Morris-Hughes. “Evidenced by notable job gains in the Professional and Business Services industry, DC workers are energized and competing with success to work where they live, achieving financial stability and strengthening the District economy.” Over the year, the unemployment rates in Wards 7 and 8 have improved by 3.1 and 6.6 percentage points, respectively, and there are 22,700 more DC residents employed across the District.

The District’s preliminary July job estimates show an increase of 14,900 jobs, for a total of 778,900 jobs in the District. The private sector increased by 4,700 jobs. The public sector increased by 10,200 jobs.  These numbers are drawn from BLS through its monthly survey of the District of Columbia’s employers.

Now let’s go a few states north to New York City.

New York City at-a-Glance

New York City has been called both the most financially powerful city and the leading financial center of the world, and the New York Stock Exchange (NYSE) is the world’s largest stock exchange by total market capitalization. NYSE is also in close proximity to the Federal Reserve Bank! Regardless of these cash flow entities, New Yorkers are feeling the impact of the pandemic on the economy and its unemployment population like everyone else.

New York City is a top global destination for visitors drawn to its museums, entertainment, restaurants, and commerce. Relying on revenues from these entities, the New York is also host to conventions and trade shows and major athletic events such as the New York City Marathon and the U.S. Open. The tourism industry is a vital component of New York City’s economy, supporting more than 376,800 jobs (representing nearly 10 percent of all private sector employment). Bringing these businesses to a halt brings New Yorkers’ livelihood to a standstill.

The number of people unemployed in New York peaked in May 2020 at 1,566,803. As early as March 2022, NYC’s unemployment was at 7.6 percent and was among the worst of major cities. There are now 1,146,597 fewer people unemployed in the state. However, from a decline in economic activity in May 2022, the number of unemployed in June of 2022 had grown by 5,820. But New York is getting better, slowly but surely.

I would be remiss if I didn’t share this side note: in D.C. and New York City, unemployment rates continue to vary highly by race/ethnicity. Black residents are six times as likely to be unemployed than their white counterparts. The unemployment rate for Black New Yorkers declined to 10 percent in March, while the unemployment rate for Hispanic New Yorkers declined to 6.6 percent, compared to 4.8 percent for both white and Asian New Yorkers. Surprise, surprise!

The State of the Economy

Despite major setbacks unemployment brings, cities like D.C. and New York continue to adjust to the shifting economy. Today’s unemployment data reflects the resiliency of their workforce. Both cities are open, and recovery continues. City, State and Federal government leaders must remain committed to connecting their residents and constituents to opportunities that lead to economic prosperity.

All in all, you may be happy to learn that the state of the economy is as such: nonfarm payroll employment increased in 46 states and the District of Columbia in July compared to the previous month, while four states lost jobs. According to the Bureau of Labor Statistics, nationwide total nonfarm payroll employment increased by 528,000 in July, following a gain of 398,000 jobs in June. As of July 2022, the U.S. labor market is back to pre-pandemic levels.

Leave a Comment

Your email address will not be published.