How to End the Nightmare of Jobless America
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Over the last six months, reports of the faltering U.S. jobs market have inundated the media. Last Friday's bleak numbers showed unemployment ticking up a tenth of a point, from 8.1 percent to 8.2 percent. But largely absent from the discussion are the American cities where the jobs crisis is nothing new -- areas that have been experiencing an ongoing unemployment nightmare since well before the financial crash.
We can call them America’s " dead zones" —metropolitan and micropolitan areas where the unemployment rate has been at least 2 percentage points higher than the national average for five, 10 or 20 years.
Conventional wisdom assumes that economically distressed areas exist only in inner-city slums or rural backwaters. But dead zones, although plagued by persistent high unemployment, rarely fit those stereotypes. Rather, they come in all shapes and sizes; these cities are not necessarily crime-ridden or poverty-stricken. In fact, many dead zones have median incomes at or even above the national average. Instead, they share sustained, and in many cases are begrudgingly resigned to, high unemployment rates regardless of the national business cycle.
In general, between 25-35 percent of their residents’ incomes are provided by government aid, compared to 17 percent nationwide. Between 25-40 percent live on $30,000 a year or less. The workforce in most dead zones has a low education level, with more than 50 percent possessing just a high-school degree or less. Most jobs in dead zones are in low-end service industries, especially retail. Such jobs offer few prospects for upward mobility or skill enhancement.
A few dead zones are on the right track, while others are clearly headed down the wrong track. Shining a spotlight on five specific cases gives us clues to the scope of the predicament, and also potential solutions. We'll compare Henderson, North Carolina; Seneca, South Carolina; and Kokomo, Indiana with dead zones that seem doomed to further stagnation – Hanford, California and Natchez, Mississippi.
Inside Jobless America
1. Henderson, North Carolina
For more than 20 years, Henderson, population 43,000, has watched jobs vanish. The tobacco, cotton and textile industries once made it a thriving community, but for the last few decades the city’s main industries have been in distributional warehousing, low-end manufacturing and retail trade. Henderson’s median income has plunged by 9 percent over the past decade to stand at $45,000, the national average. Because of its poorly educated work force, Henderson sends few workers to nearby higher-education institutions like the University of North Carolina and Duke, or to Research Triangle Park, the high-tech hub located between Chapel Hill, Durham and Raleigh.
2. Natchez, Mississippi
Natchez has a lot in common with Henderson. Hugging the border with Louisiana along the Mississippi River, it was once a center for cotton, trade and textiles. Old South wealth settled in the area, and even today more than 200 antebellum structures remain standing. But today's Natchez has experienced high joblessness levels for 20 years. The 49,000 residents have a median income of $29,000, which is 11 percent less than a decade ago. In 2003, the already struggling city suffered a major loss when three companies shut down: International Paper Plant, Armstrong Tire and Johns Manville, a construction-supplies producer. Natchez now promotes itself as a retirement community and relies mainly on tourism, medical and retail industries, as well as a local casino and prisons.
3. Hanford, California
With 148,000 permanent residents, Hanford has had high unemployment for over two decades. The city’s median income is right at the national average, about the same as it was 10 years ago. Here, the primary employers are prisons, seasonal agriculture, the Lemoore Naval Base, a small Indian casino (located about 10 miles away), and two large firms: Del Monte (a canning plant) and Marquez Brothers (a cheese producer). As with other dead zones in the Southwest, Hanford’s economy depends on migrant workers. One area of strength is that Hanford provides the only major shopping center within 40 miles. Here again, however, low-paying retail work is the norm, with few opportunities for upward mobility.
4. Seneca, South Carolina