By Paul Osolnick - 11/16/10 11:59 PM EST
A report released by the U.S. Department of Labor’s Bureau of Labor Statistics on Nov. 3 showed that Washington experienced a 0.3 percent drop in unemployment from the 6.2 percent rate held in August.
When compared to the national unemployment rate of 9.6 percent and other metropolitan areas with higher rates — including New York at 8.5 percent, Philadelphia at 8.7 percent and Los Angeles at 11.8 percent — it begs the question, why is Washington’s rate so low?
The Washington area has had the lowest unemployment rate among major metropolitan areas (or at least tied for lowest) eight of the past nine years.
The area was second in the annual average unemployment rate among large metropolitan areas in 2009, with a rate of six percent; the lowest city in 2009 was the Oklahoma City metropolitan area at 5.9 percent, according to Bureau of Labor Statistics records.
One reason for the trend of low unemployment is that jobs in Washington are not as “cyclically sensitive” as jobs in other places, said Gary Burtless, an economist at the Brookings Institute.
The lower sensitivity means that jobs are not as easily affected by the ups and downs of the market as other industries. Burtless attributed this to the jobs provided by the federal government.
“The government is a more stable source of employment,” Burtless said. “We do see some booms and busts, but nothing like other cities.”
Washington is less reliant on jobs that decline during an economic recession, he added.
Cyclically sensitive industries like construction and producers of consumer durables are not as prevalent in Washington as in other major metropolitan areas, Burtless said.
A producer of consumer durables hit hard by unemployment is the auto industry, particularly in Detroit, which saw 13.4 percent unemployment as a major metropolitan area, among the worst in September.
“The area that was hit the hardest and first was the construction sector,” said John Schmitt, senior economist at the Center for Economic and Policy Research. “Another sector that was really hit pretty hard was manufacturing, which really took a nose dive.”
The federal government not only provides stable public jobs, but also provides the environment for more stable private-sector employment.
“It’s important to keep in mind that a huge amount of the private sector in the metropolitan D.C. area is actually closely tied to the federal government,” Schmitt said. “Think about all the lobbyists, think about people who work for the Pentagon and people who work for the various government agencies.”
However, despite the lower unemployment found in the Washington metropolitan area, which includes portions of Virginia, Maryland and West Virginia, the District of Columbia has witnessed unemployment rates higher than the national average.
“When you look at the metropolitan area and not D.C. specifically, you do see a lower unemployment rate,” Reed said. “But in the District of Columbia itself, inside the diamond, unemployment has skyrocketed.”
The unemployment rate in D.C. was at 9.8 percent in September, ranked 38th among the unemployment rates on the state level.
While the entire unemployment rate of D.C. is slightly above the national rate, unemployment rates among the wards in the district are varied, according to a D.C. Fiscal Policy Institute report released in June. The average monthly rate for Ward 8 was 26.5 percent unemployment in 2009, while Ward 3 faced only 2.9 percent.
According to the report, the unemployment rate has been higher among particular groups, including African Americans, unmarried people and young people in 2009. The rates are higher in proportion to the groups’ percentage in the work force. While blacks made up 44 percent of the D.C. work force, 71 percent of those unemployed are black. The same goes for unmarried individuals, who constituted 56 percent of the work force and 70 percent of the unemployed.
People ages 18-24 were hit harder as well, representing 11 percent of the work force and 20 percent of those unemployed.
At 9.8 percent, D.C. is still above the national rate, but the district has seen a noticeable improvement over the past year as the unemployment rate has dropped from the nearly 12 percent it stood at last year.