By Clinton Reeder, USCM Intern
July 16, 2007

Although economic growth has been moderate this year, 310 metros have gained jobs over the previous year, with only 49 showing decline, according to a report released at the 75th Annual Conference of Mayors on June 25 in Los Angeles.

While U.S. Metro economies are mostly on the rebound with higher job growth and lower unemployment rates, the report also uncovered a significant “job growth gap” that points to a continued lag in job generation that has marked the existing economic recovery. The gap results from the economy producing 100,000 fewer jobs per month than in 1998 when the economy last had a declining unemployment rate of 4.5 percent, the same as today’s.

“Slower job creation in today’s economy is a serious concern and demonstrates why so many citizens do not feel part of the mainstream,” said Conference President Trenton Mayor Douglas H. Palmer. “We often speak of the American Dream, but so many people in this country never get to experience it.”

The report titled The U.S. Metro Economies: Employment and the Workforce Special Report was released by The U.S. Conference of Mayors and its Council on the New American City and prepared by Global Insight, Inc., a leading economic forecasting firm.

In its other findings, the report found that the overall percentage of participation in the labor force has dropped by 1.3 percent over the past seven years. If the participation rate had not fallen off, the US labor force would have an additional 3.1 million members today. “This report shows that not everyone is participating in our economic recovery. Mayors working together can have a great impact to turn the situation around, but need a stronger and immediate commitment from the federal government,” commented Conference Executive Director Tom Cochran.

Besides the job growth gap, the U.S. economy has seen unemployment spread unequally among different occupations. The decline of the unemployment rate since 2003 is most notable in management, professional, and related occupations, reaching a 1.9 percent unemployment rate in May. These occupations represent one-third of total US jobs. Natural resource, construction and maintenance occupations, which represent 10 percent of U.S. jobs had the largest unemployment drop, from 11.1 percent in early 2003 to 5.8 percent now. While food preparation and serving related occupations and farming, fishery, and forestry brought in the highest unemployment rates at 7.2 percent and 8.6 percent respectively.

The top five occupations with the lowest unemployment rate (1.6 percent) are clustered in the skilled positions: legal (1.3 percent); healthcare practitioner and technical (1.4 percent); architecture and engineering (1.7 percent); management (1.8 percent); life, physical, and social science (1.8 percent) with their average pay of $35.65. The bottom five occupations with the highest unemployment rate (6.8 percent) include farming, fishing, and forestry (9.5 percent); food preparation and serving (7.2 percent); building & grounds cleaning and maintenance (7.0 percent); construction and extraction (6.8 percent); and transportation and material moving (6.2 percent) with their average pay of $12.86.

The report identifies a visible “opportunity pay gap” of $23 dollars between the five occupations with the lowest unemployment and the five occupations with the highest unemployment ($35.56 vs. $12.86). “Opportunity” in the sense that if one is prepared and seizes the day, one will likely find a well-paying job; an “earnings gap” in the sense that the less prepared, less educated—those who fall between the cracks—will face a dramatic earnings gap. This gap illustrates that where the labor market is very tight, firms are drawing on a smaller pool of skilled workers. This gap illustrates that where the labor market is very tight, firms are drawing on a smaller pool of skilled workers. As baby boomers retire, the opportunity will be even greater for younger worker.

Turning to the metro economies, Billings (MT) at 1.8 percent, and Logan (UT-ID) at 2.0 percent, led the nation as the cities with the lowest unemployment. Among the largest metros Birmingham (AL), Washington (D.C.), and Salt Lake City (UT) had unemployment rates under 3 percent. More than one-half, or 205 of the 361 metros, had rates less than the U.S. average of 4.5 percent. Rates of job gains continue to be very robust (3 percent plus) in large metros such as Phoenix, Riverside'san Bernardino, Houston, Dallas and Seattle. In the Northeast, New York City has generated more new jobs in the past year (70,000) than all but Dallas, Houston, and Phoenix. Of the 49 metro economies that are projected not to recover by the end of the decade, 29 are in the Midwest region of the country. These metros are still suffering from the last recession and global competitive pressures.

“Cities, states and the federal government must have a much more aggressive strategy and focus on education and training in America’s cities,” said Kilpatrick. “The future economy of this nation will need every person of every race, every religion, and every background to meet the demand for these skilled, higher paying positions. This is critical for our global competitiveness.”