A Declining Labor Force in Vast Majority of Metropolitan Areas

By at 29 October, 2020, 2:55 pm


by Raymond J. Keating-

The general story from the U.S. Bureau of Labor Statistics “Metropolitan Area Employment and Unemployment” report for September 2020 didn’t differ all that much from the August report (see SBE Council’s analysis). Namely, nonfarm payrolls were down in 251 metropolitan areas in September 2020 vs. September 2019 (data is not seasonally adjusted), with nonfarm payroll effectively unchanged in the other 138 areas.

For good measure, unemployment rates were up in 388 of the 389 metro areas.

Obviously, the declines have been uneven. As for the most troubling percentage declines from September 2019 to September 2020 among areas with populations topping 1 million: “The largest over-the-year percentage decreases in employment in these large metropolitan areas occurred in Las Vegas-Henderson-Paradise, NV (-12.3 percent), New York-Newark-Jersey City, NY-NJ-PA (-10.8 percent), and San Francisco-Oakland-Hayward, CA (-10.6 percent).”

If we expand the view to all metro areas covering the report, then the largest percentage declines over the past year were the following: Kahului-Wailuku-Lahaina, HI (-29.6 percent), Lake Charles, LA (-19.6 percent), and Ocean City, NJ (-18.3 percent).

Finally, it’s worth taking a look at labor force changes over the past year.

The severe ills of this pandemic economy not only have driven up unemployment rates, but also driven down actual participation in the labor force, that is, a decline in the number of people either working or actively seeking work, who then are not counted in unemployment data.

In fact, out of the 389 metro areas included in the BLS report, the labor force declined from September 2019 to September 2020 in 278 areas. That means people, to varying degrees, simply abandoned the labor-force playing field altogether.

The road to recovery on the jobs front not only is about job creation, but getting people back into the labor force itself. That had been an incomplete task for more than a decade after the Great Recession, and the challenge arguably will be even greater this time around.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.


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