Fast-growing states like Florida and Nevada are among those most affected by the pandemic owing to their reliance on Hospitality and Entertainment Industries.
By Manuel Gutierrez, Consulting Economist to NKBA
U.S. employment growth for the decade prior to the start of the pandemic stood at 17%, but varied greatly from state to state. The range was from a high of 34% in Utah, to a low of 1% in West Virginia.
The employment growth path for each of the 50 states plus the District of Columbia is shown in Figure 1, color-coded to identify four different paths, including 20%+, 10% to under 20%, 5% to under 10%, and under 5%.
The majority of states follow a fairly steady progression, with minor variations in some months. That is, the economies of most states generally grew throughout the decade from 2010 to 2019.
Half the states in the U.S. saw their employment drop by at least 5% since the start of the pandemic, with Utah and Idaho the only two registering a gain.
However, there is a handful of states that have a more erratic growth pattern. One of them is North Dakota, highlighted in Figure 1 at the top, which shows very rapid growth through 2015, followed by a noticeable dip. By the end of 2019, North Dakota’s growth fell to a total of 19% since 2010. This state benefitted greatly from the oil fracking boom.
At the bottom of Figure 1 are three states that rose to reach 5% employment growth by 2015, only to slow down in the following four years. They include Wyoming and Alaska, each with 3% growth over the decade, and West Virginia, with just 1% employment growth.
In Figure 2, total employment growth is isolated by state from 2010 to 2019. The vertical gray line in each of the two panels reflects the total U.S. growth, which was exactly 17% over this period. There are just 15 states with growth above the national average, and 36 others, including the District of Columbia, below the U.S. average.
Also, as indicated at the bottom of the left panel, the red line separates those states whose growth exceeded 20% over the decade. Among the six fastest-growing states are those with low population, such as Utah and Nevada — which have come on strong — but also two of the most populous states, Florida and Texas. This partially is due their low taxes and pro-business policies.
How each state has fared since the pandemic began is addressed in Figure 3, where February 2020 employment, just prior to the pandemic, is compared with February of this year. For each, the shortfall since pre-pandemic is shown.
There are 25 states with a gap higher than the national average, the left panel of Figure 3, and 25 states that have a smaller gap. Growth dynamics have changed since before the pandemic based on the extent to which each state was affected, as well as policies put into play in reaction.
For instance, three the six fastest-growing states in the decade prior to the pandemic, shown in Figure 2, have grown slower than the national average since February 2020. Nevada, which had enjoyed 29% growth between 2010 and 2019, the second fastest in the nation, has current employment at 9.9% below last year. This is understandable because of the state’s high dependency on the hard-hit Hospitality and Entertainment industries.
Florida is another state that saw its fast growth stall after the pandemic. While its pre-pandemic employment growth was 27%, its employment is currently 5.4% below last year. The state’s high dependency on tourism and entertainment has resulted in slowed growth recently.
Since last April, when U.S. employment bottomed, the recovery by state has been uneven. The percent growth in employment between April 2020 and February 2021 is displayed in Map 1.
There is no discernable geographic pattern for growth. For instance, the dark-shaded Nevada, with 15.9% growth, is next door to the pale-shaded California, at 7%. Similarly, Michigan has the fastest post-pandemic growth (21.3%) next to Wisconsin’s 9.4%.
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