Last week’s election results amplified the debate about the extent to which economic anxiety and dislocation, particularly in small towns and rural communities, contributed to Donald Trump’s Electoral College margin. Whatever role those worries played in the outcome, Trump’s policy positions on issues such as trade, infrastructure investment, and environmental regulation represent in part his responses to long-term trends in the labor market. The decline in labor force participation (the proportion of people who are working or actively looking for work) raises fears that the economy is on shakier footing than the low U.S. unemployment rate indicates, and that some would-be workers may not be finding their way back to employment. The decline in labor force participation among prime-age workers is of particular concern.
Policy decisions in Washington over the next few years will shape economic opportunity and security for millions of workers and communities. At the same time, critical labor market patterns play out differently in different parts of the country, highlighting how important it is that local leaders understand their context in order to best marshal the assets and resources under their control.
A quick review of national figures provides a useful benchmark for understanding local variation. More than three-quarters of working-age adults ages 18-64 participated in the labor market in 2015, meaning they were either working (72 percent) or looking for work (5 percent). A significant portion, however, (23 percent) was not in the labor force. This is a heterogeneous group of people, doing different things with their time and with different motivations for not entering the labor market, making them tricky to classify. Many devote their energy and time to alternative activities, including raising children or going to school. Others are retired or may have disabilities that preclude employment. Still others may be discouraged workers—those who would like to work but are no longer actively job-searching (a requirement to be counted as unemployed) because they don’t believe they will be offered a job. Indeed, the number of discouraged workers rose during the recession, although other factors such as an aging population also account for the falling labor force participation rate.
Ultimately, it’s local conditions and interventions that matter most for connecting job seekers to work opportunities. And at that level, headline labor market statistics vary considerably. Detroit emerges as an outlier among large cities and counties nationwide (defined as those with populations of over 500,000), with just 51 percent of its working-age adult population employed—21 percentage points below the national figure. The next lowest include Hidalgo County in Texas’s Rio Grande Valley (62 percent), Stanislaus County in California’s Central Valley (63 percent) and Philadelphia and the Bronx in New York City (both 64 percent). These numbers suggest that in a tough job market some will simply stop looking for work.
Figure 1. Among large jurisdictions, the share of adults who are not working ranges from 18-49 percent
At the other end of the spectrum, the share of working-age adults who are employed reaches 80 percent and higher in Johnson County, Kan. near Kansas City (83 percent); Hennepin County, Minn. (which contains the city of Minneapolis) (82 percent); the city of Seattle (81 percent); and Anne Arundel County, Md. (80 percent). Strong economies such as these draw more people into the labor force, including those who might have given up the job search or not be competitive candidates in weaker labor markets.
Of course, a wide variety of public, private, and civic efforts in all types of cities and counties aim to expand job opportunities for adults. To be successful, localities must tailor their efforts in education and training, community development, public job creation, and social services to address the specific circumstances and characteristics of out-of-work adults in their jurisdiction—within the broader context of the regional economy. These needs and circumstances can show substantial differences even within the same regional labor market.
Take, for example, the Washington, D.C. area. The District of Columbia and the adjacent suburban counties of Montgomery and Prince George’s in Maryland all have relatively strong economic bases with employment rates above the national average. While the D.C. region is generally diverse and highly educated, the demographics of its individual jurisdictions vary, including those who are employed, unemployed, and out of the labor force.
Figure 2. The demographics of the unemployed and those not in the labor force vary by place
Blacks are disproportionately likely to be unemployed in each of these three places, as is the case nationally. But the magnitude of these discrepancies differs by place. In the District, blacks make up 42 percent of the working-age population overall, but 74 percent of the unemployed, a 32 percentage-point difference. In Prince George’s County, blacks account for 63 percent of the population and 75 percent of the unemployed, a much smaller 12 percentage-point difference. This may indicate that black residents in the District face greater disadvantages in finding work than their counterparts in Prince George’s County.
Latino residents show a different pattern within the region. In the District and Prince George’s County, they are under-represented among the unemployed relative to their population share. In Montgomery County, by contrast, Latinos comprise 27 percent of the unemployed, versus 19 percent of the working-age population. Latinos in Montgomery County may be less able to compete in the labor market than their counterparts in the District and Prince George’s County.
This type of information could inform the work of regional organizations with specific competencies in connecting black and Latino populations to job opportunities and help them target their services geographically. For purposes of informing those strategies, these sorts of statistics only begin to scratch the surface, and we’ll be developing a deeper look at these populations across cities and counties in the coming months. Improving local understanding of these employment patterns will be critical for sustaining local economic growth, and ensuring that growth is widely shared across populations and communities.