Wednesday, July 29, 2009

If You Think Wichita's Unemployment Is Bad, Look At Detroit's!

The Bureau of Labor Statistics summarized the employment situation for the country's states and metropolitan areas. As announced earlier by the Kansas Department of Labor, Wichita's unemployment rate is 8.5 percent. That is up from 8.3 percent in May and is a lot worse than a year ago when 4.2 percent of Wichita's workforce was out of work.

While the number of unemployed has more than doubled in a year, the actual number of people saying they have jobs is down less than a half percent. Some of this discrepancy may reflect the inevitable variation arising from any statistical sampling of households. It could also mean more people are looking or saying they are looking for work as secondary wage earners seek to help out when the primary bread winner is laid off. The increased labor force participation may also come from an increase in the federal minimum wage. Firms may also be reacting to the new minimum wage by hiring more experienced, more productive, higher paid workers to replace less experienced workers.

Wichita looks good in comparison to the rest of America. Fifteen states have double digit unemployment rates. The Detroit-Livonia MSA has the dubious distinction of "achieving" more than double our our unemployment rate at 17.1 percent.

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