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Weak Economic Recovery Hits More States, Hammers Same Old Few

7/30/2003 --

ANN ARBOR, Mich.---America's weak economic recovery since the end of the recession in November 2001 has been longer, more severe and more widespread than the similar recovery of the early 1990s, says a University of Michigan economist.

The current "job-less" recovery has lasted nearly twice as long and has resulted in three times as many job losses (940,000 jobs vs. 300,000 jobs) compared to the economic recovery in 1991-92, according to Donald Grimes, an economist at the U-M Institute of Labor and Industrial Relations, which is directed by the University's Business School and School of Social Work.

"Even though the economic pain of a weak recovery has been much more equitably distributed among the states this time around, those that have been hit the hardest are, in general, the same states that were hurt the most during the previous recession," Grimes said.

According to Grimes, 37 states have lost jobs overall since employment peaked in February 2001, compared with 21 states that did so in the recession and recovery period of June 1990-February 1992. Since the end of the most recent recession, 27 states have posted job declines, compared with 14 states that lost jobs in the March 1991-February 1992 recovery.

Massachusetts has the highest rate of job loss (4.39 percent) during the last 28 months (it also had the second-worst rate of job loss in the early 1990s), while the industrial states of Illinois (3.55 percent), Ohio (3.51 percent) and Indiana (3.45 percent), along with South Carolina (3.41), which is heavy in textile manufacturing, round out the top five.

New York (3.33 percent), Michigan (3.32 percent), Oregon (3.18 percent), Colorado (2.96 percent) and Kentucky (2.89 percent) ranked sixth through 10th in the rate of job loss.

"While most people would attribute the continued weakness to job losses in information technology industries, states that have suffered the greatest during the post-recession period are not technology-based states, but are industrial states in the Midwest," Grimes said. "The most populous state, and the one most closely identified with information technology–California–suffered a much greater job loss in the early 1990s (2.74 percent) than it has so far during this recession and recovery period (1.81 percent)."

Using data from the Bureau of Labor Statistics, Grimes found that not only has the United States lost more jobs in the current recovery compared with the recovery of the early 1990s, but 1.66 million jobs were lost in the 2001 recession (March-November 2001) versus 1.28 million job losses in the previous recession (June 1990-March 1991). In all, 2.6 million jobs (1.96 percent) have been lost in the most recent recession and recovery, compared with 1.58 million (1.44 percent) in the early 1990s.

Grimes says that, if the job market recovery begins soon, the most important lesson economists can learn from this recession, and from the 1990-91 recession, is that even after production levels begin to increase following a recession, employment will continue to decline for a substantial period of time.

See chart of states ->



For more information, contact:
Bernie DeGroat
Phone: 734.936.1015 or 734.647.1847
E-mail: bernied@umich.edu