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The New Economy

As unemployment soars, 'new Michigans' emerge

By / June 19, 2009

A job searcher browses opportunities on a computer at WorkSource Oregon in early June. Oregon is one of eight states that has reached its highest unemployment rate in 33 years of federal record keeping.

AP Photo/Rick Bowmer

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Michigan is a national leader in a dubious category.

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Not only did it see the largest month-over-month increase in its unemployment rate in May, the Wolverine State also continues to post America's highest state unemployment rate: 14.1 percent, according to a release Friday by the US Department of Labor.

But Michigan has been here before. In November 1982, its jobless rate peaked at a seasonally adjusted 16.9 percent.

Eight other states have now fumbled into uncharted territory. They're enduring the highest unemployment rates they've ever seen in 33 years of federal record keeping. They are the "new Michigans."

Oregon (12.4 percent), Rhode Island and South Carolina (12.1 percent), California (11.5 percent), Nevada (11.3 percent), and North Carolina (11.1 percent) are all significantly above the national average (9.4 percent). Two other states are reasonably close to the national average – Florida (10.2 percent) and Georgia (9.7 percent) – but they're still experiencing their highest unemployment rate since at least 1976.

Nebraska and North Dakota, by contrast, tied for the lowest rates in the nation: 4.4 percent.

The new Michigans are a diverse lot – and less dependent on a single industry as Michigan has been. Still, their problems have accumulated. Some, like California and Nevada, have been at the center of the real estate maelstrom. Others, particularly Oregon, appear to be suffering from its spillover effects.

High-tax Rhode Island has seen big declines in manufacturing and services jobs. The nonunion and lower-tax Carolinas have been hit with declines in manufacturing, apparel, and (in North Carolina) banking.

Forecasters say unemployment will rise before it gets better. The silver lining is that it won't last forever. It took nearly 15 years, but by the mid-'90s, Michigan's economy was roaring again and the unemployment rate had fallen to below 5 percent.

So the new Michigans can rise again and become, say, the new North Dakotas.

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