The December 2008 state-by-state unemployment rates are out, and there are some interesting regional patterns. National unemployment, as previously announced, was 7.2 percent—a big jump from November.
Unemployment rose in every state.
I see three regional nodes where it's significantly higher than the national average. One is the Auto Node: Michigan, again leading the nation (10.6 percent), Indiana (8.2 percent), Ohio (7.8 percent), Kentucky (7.8 percent), and Tennessee (7.9 percent). Perhaps you might want to add Mississippi (8.0 percent), which has a big Nissan plant but has other problems. The auto industry's problems are well known, and sales have taken an off-the-cliff drop, affecting not only the Detroit Three but also foreign automakers, whose plants are concentrated in Tennessee, Kentucky, Indiana, and Ohio.
The second node is the West Coast Node: California (9.3 percent), Nevada (9.1 percent), and Oregon (9.0 percent). Or you might call this the Subprime Node. About half the nation's subprime foreclosures are concentrated in four states that have had (or in California's case, some parts of which have had) extremely rapid growth in the past decade. California and Nevada are two of those states. Florida (8.1 percent) is another. Only in the fourth, Arizona (6.9 percent), is unemployment below the national average.
Then there is the South Atlantic Node: South Carolina (9.5 percent), North Carolina (8.7 percent), Georgia (8.1 percent), and Florida (8.1 percent). Over the past decade, these three states have had sizzling growth, with substantial domestic in-migration and significant though lower immigrant in-migration. Now it seems their economies have sharply exhaled and left a lot of people out of work. Interestingly, Barack Obama ran particularly far ahead of previous Democratic presidential candidates in these states, especially in North Carolina, whose 15 electoral votes he won, and Georgia, where he came close to winning its 15 electoral votes. Georgia and North Carolina are now our ninth- and 10th-largest states, pushing New Jersey out of the top 10 list.
That leaves two regional outliers with especially high unemployment rates: Rhode Island (10.0 percent), whose economy seems to be flagging much more than those of the other New England states, and the District of Columbia (8.8 percent), whose neighbor states, Virginia and Maryland, have much lower unemployment rates. But remember that Rhode Island has only about 1 million people and D.C. only about half a million.
The three high unemployment nodes are linked by particular Interstate highways, the Auto Node by I-75 and I-65, the West Coast Node by I-15, the South Atlantic Node by I-85 and I-95.
Where is unemployment particularly low? In the Great Plains and Rocky Mountain states and in the Northeast. Most of these states have had low population growth and many have relatively elderly populations. Older people are less likely to be unemployed (if you lose your job at 62, you may choose to retire). And slow-growing states don't have a lot of people entering the work force every month, as states like Nevada and the Carolinas do.