Data watch: Unemployment trends predict uneven recovery

May 19, 2021

In some ways, COVID’s economic impact in cities feels a little bit the same everywhere. Everybody felt some amount of pain from lockdowns, disruption from broken supply chains, and sadness from seeing beloved local restaurants and small businesses fold.

But the reality, as the data here show, is that cities have experienced the downturn in many different ways—and the recovery won’t happen uniformly either.

Dozens of U.S. metro areas still have unemployment rates in the double digits, even as the national rate has fallen to 6.1 percent. Those include tourism-driven economies like the ones on the Hawaiian island of Maui, as well as oil-focused hubs in Texas like Odessa and Beaumont-Port Arthur. 

At the same time, unemployment in dozens of other U.S. metros is nearing pre-pandemic levels. That’s the case, for example, in Fairbanks, Alaska, as well as the Nebraska metros of Grand Island, Lincoln, and Omaha-Council Bluffs—all places that have worked hard to diversify their economies

One lesson in this data is that there’s no one-size-fits-all approach to economic recovery for America’s urban areas. That’s especially important to remember now, as localities prepare to spend a flood of federal dollars from the American Rescue Plan. Local leaders can and should look outward for ideas on how to rebuild their economies, but their plans will need to be grounded in their own local realities. 

The data here don’t provide answers on how to do that. But they do tee up the kinds of questions city leaders should be asking right now. Some of those questions include:

  • Do I have enough granular workforce data to help shape economic recovery investments?
  • What workforce supports are in place so that economic shocks are less devastating?
  • What industries are powering my community’s economy and are we investing in programs that ensure they have a workforce pipeline? 
  • How has the downturn impacted my community’s workforce? What worked and didn’t work for them? Have the economic impacts been experienced comparably across the entire workforce?
  • How can we use federal funds to build resiliency for next time?

Most critically, local leaders need to dig deeper into their own data to understand and address how vulnerable populations are being impacted. For example, working women have absorbed more of COVID’s economic impact than men, both because they’ve taken on child care duties with schools and daycare centers closed and because they work more in sectors that have been hit the hardest. 

The same forces have hit Black and Latinx Americans and other people of color. Following the Great Recession of 2007-2009, they suffered bigger homeownership declines and lost wealth than White Americans—and the racial gap in terms of economic impact may be even bigger this time. The fact that this keeps happening is a symptom of structuralized racism that cities have only begun addressing; now is the time for city leaders to act boldly to keep it from happening again.