PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

State Employment Changes During the Pandemic

By at 3 March, 2021, 3:09 pm

by Raymond J. Keating-

The U.S. Bureau of Labor Statistics has released its report on state averages for 2020 in terms of unemployment rates and employment-population ratios, and how those compared to the previous year.

Given the shortcomings of the unemployment rate (for example, it being affected by changes in the labor force), the most valuable information in this report is the employment-population ratio – that is, the proportion of the civilian noninstitutional population 16 years of age and older that is employed – and how the pandemic year of 2020 compared to pre-pandemic level registered in 2019.

And since this is done on a state-by-state basis, one can see how the state of employment varies notably from one state to another, both in terms of the one-year change in employment and in terms of rather dramatic differences in employment among the states.

The data for all of the states and the nation overall are in Table 1. Among some points worth noting:

• All 50 states suffered declines in their employment-population ratios in 2020.

• In terms of percentage point changes, the largest declines were in Nevada (-8.1 percentage points), Hawaii (-7.1 percentage points), Massachusetts (-6.1 percentage points), Rhode Island (-5.6 percentage points), and California (-5.4 percentage points).

• 18 states suffered larger percentage point declines than the national decline of 4.0 percentage points.

• At the other end, the states that performed best in terms of percentage point changes from 2019 to 2020 were: Nebraska (-1.5 percentage points), South Dakota (-1.7 percentage points), Wyoming (-1.7 percentage points), Kansas (-1.8 percentage points), and Montana (-1.8 percentage points).

• As for the lowest employment-population ratios in 2020, those states were: West Virginia at 50.3 percent, Mississippi at 50.6 percent, New Mexico at 52.3 percent, Hawaii at 52.7 percent, Florida at 52.9 percent, Louisiana at 53.2 percent, New York at 53.7 percent, Kentucky at 53.8 percent, Nevada at 53.8 percent, and Arkansas at 53.9 percent.

• In contrast, the following states registered the highest employment-population ratios: Nebraska at 66.7 percent, North Dakota at 66.0 percent, Minnesota at 65.3 percent, South Dakota at 65.0 percent, Utah at 64.8 percent, Iowa at 63.7 percent, Kansas at 63.1 percent, Colorado at 62.8 percent, New Hampshire at 62.9 percent, and Maryland at 62.0 percent.

• That is a striking range among the states, with Nebraska’s employment-population ratio high coming in at 66.7 percent versus the low of 50.3 percent in West Virginia. There is a great deal packed into such differences, including economic, policy, education, entrepreneurship, industry, demographic and cultural factors – which all warrant deeper exploration.

• Also, 21 states had employment-population ratios below the national average.

Table 1: State Employment-Population Ratios (in percent and annual averages), 2019-2020

State 2019 2020 Change in Percentage Points
Alabama 56.1 54.1 -2.0
Alaska 61.3 58.7 -2.6
Arizona 58.8 56.1 -2.7
Arkansas 56.2 53.9 -2.3
California 59.8 54.4 -5.4
Colorado 66.9 62.8 -4.1
Connecticut 64.1 59.8 -4.3
Delaware 60.2 56.5 -3.7
Florida 57.4 52.9 -4.5
Georgia 60.5 57.1 -3.4
Hawaii 59.8 52.7 -7.1
Idaho 62.4 60.0 -2.4
Illinois 61.9 56.8 -5.1
Indiana 62.4 58.5 -3.9
Iowa 68.2 63.7 -4.5
Kansas 64.9 63.1 -1.8
Kentucky 56.7 53.8 -2.9
Louisiana 56.4 53.2 -3.2
Maine 60.9 57.2 -3.7
Maryland 66.2 62.0 -4.2
Massachusetts 65.1 59.0 -6.1
Michigan 59.4 54.6 -4.8
Minnesota 67.7 65.3 -2.4
Mississippi 52.9 50.6 -2.3
Missouri 61.9 59.3 -2.6
Montana 60.8 59.0 -1.8
Nebraska 68.2 66.7 -1.5
Nevada 61.9 53.8 -8.1
New Hampshire 67.1 62.9 -4.2
New Jersey 61.7 57.3 -4.4
New Mexico 55.5 52.3 -3.2
New York 58.4 53.7 -4.7
North Carolina 59.2 54.9 -4.3
North Dakota 68.5 66.0 -2.5
Ohio 60.6 57.1 -3.5
Oklahoma 59.0 56.8 -2.2
Oregon 59.5 56.5 -3.0
Pennsylvania 60.4 56.5 -3.9
Rhode Island 62.4 56.8 -5.6
South Carolina 56.6 54.2 -2.4
South Dakota 66.7 65.0 -1.7
Tennessee 59.8 56.0 -3.8
Texas 61.7 57.9 -3.8
Utah 66.8 64.8 -2.0
Vermont 64.9 60.1 -4.8
Virginia 64.5 60.6 -3.9
Washington 62.2 58.8 -3.4
West Virginia 52.4 50.3 -2.1
Wisconsin 64.6 61.7 -2.9
Wyoming 63.2 61.5 -1.7
United States 60.8 56.8 -4.0

 

Both the decline in employment-population ratios from 2019 to 2020, and the strikingly low levels in assorted states speak to a vital need for elected officials at the federal, state and local levels to establish policy climates that encourage entrepreneurship, business investment, work, and individual investments in education and career improvement/building.

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

 

News and Media Releases