Nov 23, 2020 - Economy

The biggest pandemic labor market drags

Data: U.S. Bureau of Labor Statistics; Chart: Naema Ahmed/Axios

State economies most exposed to industries that have been slow to bounce back from the pandemic shutdown — like tourism — are seeing the worst labor market pain.

Why it matters: Even states that have the coronavirus more under control than others are taking harder economic hits, thanks to their dependence on sectors slammed by the pandemic.

One example: Hawaii’s unemployment rate, which fell 0.7 percentage points in October, is still more than double the nationwide rate, new Department of Labor data show.

  • More than 91,000 people are out of work in the state — over 5 times more than the 17,000 who were out of work before the pandemic hit.
  • Employment in the leisure and hospitality sector is down 50% from this time last year.

The other side: In places like Nebraska and South Dakota, which have emerged as coronavirus hotspots, the unemployment rate is lower now than before the pandemic hit.

  • Unemployment rates in these states peaked at lower levels than the national rate. Government officials there were less aggressive about imposing economic restrictions.

Yes, but: Vermont, whose unemployment rate peaked at a level close to the nationwide peak, enacted strict economic restrictions and a mask mandate. Its unemployment rate is among the lowest in the country.

  • The makeup of their rural economies mean “more of the people work in industries that wouldn’t really be disrupted by a need for social distancing like agriculture,” Eric Thompson, a professor at the University of Nebraska-Lincoln, told AP earlier this month.

The big picture: The unemployment rate fell in 37 states and the District of Columbia. It rose in eight states, and held steady in five.

The bottom line: States like Hawaii had some of the lowest unemployment rates in the country when the pandemic hit.

  • Unemployment rates are largely improving, but it could be some time before their labor market bounces back the way it has in other states.
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