Thursday, May 14, 2015

Case of the Vanishing Worker

Unemployment rate is falling in industrial Midwest as residents move away, retire or give up on finding a job.
By one key gauge of economic health, this industrial city three hours south of Chicago is well on the way to recovery.
Denny Ryder left for North Carolina after he was laid 
off from this Caterpillar plant in Decatur, Ill., in 2013.
 Photo: Kristen Schmid for WSJ
Hit hard by the recession, when its unemployment rate topped 14%, Decatur over the past year has seen one of the swiftest declines in joblessness in the country, with the rate dropping to 7% in March from 10.2% a year earlier.
But look closer, and this city of 75,000 resembles many communities across the industrial Midwest, where the unemployment rate is falling fast in part because workers are disappearing: moving away, retiring or no longer looking for a job.
Longtime industrial city Decatur, Ill., has banned trucks 
downtown and tried to promote outdoor dining in an 
attempt to attract younger residents. 
Photo: Kristen Schmid for WSJ
“In cases like that, the unemployment rate makes things look better than they really are,” said Karl Kuykendall, U.S. regional economist at IHS Global Insight. In terms of overall economic growth, he said, “a decline in population and workforce is devastating.”
In many parts of the country, and at the national level, falling unemployment appears to truly reflect recent improvement. The Labor Department reported Friday that the U.S. jobless rate ticked down in April to 5.4%, its lowest level in nearly seven years.
CLICK CHARTS to ENLARGE
But the falling rate doesn’t tell the full story of a recovery that remains uneven nearly six years after the recession ended. Among the 20 metropolitan areas where unemployment fell by at least 2.7 percentage points in the past year, 16 also saw their workforces shrink over the same period, according to Labor Department data. Half of those were in Michigan or Illinois, including Detroit, Decatur, Flint, Mich., and Rockford, Ill.
Read the rest of the story HERE.

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