US Job Market: Everything Is Relative

In the US, current policies have been anchored on unemployment.

Yet the job markets have been unevenly spread with the best jobs mostly seen in energy and commodity producing states.

According to Gallup,

Gallup's Job Creation Index shows that the energy-producing states of North Dakota, Louisiana, West Virginia, Oklahoma, and Texas are in the top 10 state job markets for the first half of 2010, as they were in 2008 and 2009. They are joined by Alaska, another energy state; the District of Columbia, Maryland, and Virginia, all of which benefit from the presence of federal government hiring; several farm states -- Arkansas, Iowa, and South Dakota -- that benefit from ethanol and a strong commodities market; and Pennsylvania -- possibly reflecting the steady improvement in manufacturing.

Despite an overall improvement in job market conditions, 5 states in the bottom 10 during the first half of 2010 were also on the list in 2008 and 2009: Nevada, Connecticut, Rhode Island, California, and Michigan. Additional financial-crisis states in the Northeast, including New Jersey, Maine, Vermont, New York, and New Hampshire, are some of the worst job markets. Other Western states in the bottom 10 include Idaho and Wyoming. Although Michigan's job market has improved substantially from 2009, it remains in the 2010 bottom 10.

Some thoughts:

First, bubble dynamics forces a shift in the underlying structure of the investments away from areas where misdirected resources had been concentrated and into areas mostly neglected by the previous boom.

Next, not all industries or localities have been similarly affected. In short, everything is relative; some areas get to benefit from the post-bubble shift, and some areas get a temporary lift from government intervention (of course, with unintended consequences yet to emerge).

Lastly, the survey shows where the best jobs had been and what has been the possible attributes.

True, some of the worst spots had been the ground zero from the bubble bust. But what wasn’t incorporated in the perspective is that part of this lag could have been due to the lack of economic freedom (shown above from ppinys.org)—where the recent crisis exposed the underlying rigidities from extant regulatory and tax regimes which functioned as principal obstacles to the necessary adjustments to post bubble conditions. This can be seen particularly in Connecticut, Rhode Island, New Jersey and California—with the exceptions of Nevada and Idaho.

If we try to put this into equation, we get: bubble bust + economic rigidities (from tax and regulatory regime)=worst job markets (of course with some notable exceptions due to special specific local circumstances).