Largest Metro Areas Lose Living-Wage Jobs in First Year of Pandemic

South, Northeast Had Biggest Increase in ‘Functionally Unemployed’ During Pandemic

Eighty-four of the nation’s largest metropolitan areas posted negative growth in living-wage jobs — five by double digits — during the first year of the pandemic, according to an analysis by the Ludwig Institute for Shared Economic Prosperity (LISEP).

“Too many Americans remain functionally unemployed in all regions of the U.S., but some regions have done better, proving that recessions, like economic recoveries, are not created equal,” said LISEP Chairman Gene Ludwig. “If policymakers are to make decisions to facilitate an equitable recovery, it’s important for them to be aware of the disparities these data show. And these data are much more revealing about the economic picture of these local areas than headline economic data.”

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LISEP today released a comprehensive analysis of the True Rate of Unemployment (TRU) by Metropolitan Statistical Area (MSA), a more in-depth version of its monthly True Rate of Unemployment report. For the purpose of this analysis, LISEP highlighted TRU’s sister metric: the TRU Out of the Population. This is defined as the percentage of the MSA’s total population (age 16 and older) who do not hold a full-time job, works part-time but desires full-time, and does not earn a wage paying above the poverty level. The calculations are based on data compiled by the U.S. Bureau of Labor Statistics (BLS).

Analyses based on the employment status of the entire population, as opposed to only the civilian workforce, serves as a more revealing barometer of labor trends during the pandemic due to a spike in discouraged workers dropping out of the labor market, according to LISEP.

In the TRU by MSA report, which compares 2019 to 2020 rates, LISEP found that of the largest metropolitan areas in the country, the Atlanta-Sandy Springs-Alpharetta MSA had the biggest increase in the functional unemployment rate among the most populous MSAs, with the TRU Out of the Population rate jumping by 12.39 percentage points from 2019 to 2020, followed by Boston–Cambridge–Newton at 11.61 percentage points. The functional unemployment rate jumped 11.33 percentage points in the Los Angeles-Long Beach MSA, followed by Bridgeport–Stamford, Conn. (up 10.86%), Memphis, Tenn. (up 10.78%), and Knoxville, Tenn. (up 9.54%) and Birmingham–Hoover, Ala. (up 9.06%).

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On the opposite end of the spectrum, Richmond, Va., posted the most-improved TRU Out of the Population rate in the first year of the pandemic, improving by 7.4 percentage points. Tucson, Ariz., was the second-most improved MSA, with functional unemployment dropping 5.65%, followed by Virginia Beach–Norfolk with a 4.59% improvement, El Paso, Texas, improving by 2.7%, and Tulsa, Okla., with a 2.21% improvement in the living-wage job rate.

“Breaking the U.S. economy down into individual, local economies gives us a clearer picture of how prepared we were for the economic shock delivered by the pandemic, and may offer clues on how we can be better prepared when another major recession occurs,” Ludwig said. “However, COVID and people’s reluctance to come back to low-wage jobs paints a troubling picture about how low- and middle-income Americans have fared over the past 50 years.”

In addition to its monthly national TRU report, LISEP will continue to issue functional unemployment data by MSA following the annual release of self-employed earnings through the Annual Social and Economic Supplement (ASEC), released jointly by the U.S. Bureau of Labor Statistics and the U.S. Census Bureau each fall.

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