15 States with the Worst Job Markets
In this article, we will be taking a look at the 15 states with the worst job markets. To skip our detailed analysis, you can go directly to see the 5 states with the worst job markets.
The United States of America actually closed the year 2022 by adding 223,000 jobs in December 2022 as reported by the Bureau of Labor Statistics. This meant a great deal for the economy of the country, helping it remain healthy despite the oncoming fears of recession. To find out the best state for economy, there are three values that are taken in consideration: the employment rate, job growth, and the labor force participation rate. Employment is considered as 1/3rd of the value for a good economic state. However, the question still is, is the job market good currently? The answer depends on where you live. Some states in the country have a great job market, with jobs continuously being added in sectors where there is a demand, providing great opportunities to the people dwelling in those states. On the other hand, other states in the United States of America are currently going through a rough time where finding a job is getting harder by the day. In those states, the starting salaries offered are quite low, and there is a poor possibility to find better opportunities as well. So even if you have the best skills and a great past working experience, you are still likely to end up unemployed in these states as they do not have enough options available to hire and fulfill that demand. The job market is also very specific to the professions and industries. While one sector maybe thriving, the rest might be suffering simultaneously.
It has been a tough year for the USA, considering that inflation rates reached highs not seen in decades and the Federal Reserve also hiked interest rates to help calm the labor market. However, 2022 proved to be one of the lowest unemployment rates for the USA, though having a low unemployment rate is necessarily not a good thing. Unemployed includes everyone who does not have a job currently but are actively searching for one, and hence low unemployment rates make for a healthier economy. On the other hand, one reason for this could be a decline in the participation rate of labor in America. The labor participation rate is calculated as the percentage of civilians who are actively either working or in search of a job, and only those who are 16 or above are considered to be part of the labor pool. This is why it is also not considered the best of news, as companies then have to fight to find the best labor if the labor pool is very restricted, and this leads to higher costs faced by companies. It is a bittersweet symphony for the country, which is trying to stay afloat despite economic trends showing an upcoming state of recession globally.
Technology companies such as Meta Platforms, Inc. (NASDAQ:META) have also been hit by the doomed job market in USA. This led to a lot of people being laid off, and thus affected the trust and value that the "metaverse" initially had on people. After aggressive hiring during the pandemic, many companies had to cut down expenditure in order to make it through. However, some companies are still working hard in making sure that their companies survive and help the country's economic growth at a significant level. TikTok, a video hosting service platform, owned by a Chinese company ByteDance, announced a major hiring spree at the end of the year 2022, giving hope to the thousands of people laid off from tech companies. There are online business as well that are working in the recruiting industry allowing job seekers to seek jobs, such as Workday, Inc. (NASDAQ:WDAY). Workday, Inc. (NASDAQ:WDAY) is a company that specializes in cloud-based human capital management (HCM) software. Over the past year, its stock price has seen a significant rise of approximately 20%. This upward trend can be attributed to the robust growth of the HCM software market and Workday, Inc. (NASDAQ:WDAY) consistent focus on innovation and the development of new products. Over the past five years, Workday Inc. has achieved an impressive annual revenue growth rate of 19%, allowing the company to showcase its consistent and substantial financial progress. Another such company is Monster Beverage Corporation Corp (NYSE: MNST), a global online employment marketplace. Its stock price has increased by about 10% over the past year. This is likely due to the strong growth of the online employment marketplace, as well as Monster Beverage Corporation Corp's (NYSE: MNST) acquisition of CareerBuilder in 2017.
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“The lagged impact of aggressive Fed tightening, the drag on real wages from high inflation, and knock-on impacts from the downturn in Europe will drive the U.S. economy into recession territory next year – with the unemployment rate increasing to 4.7% at the end of 2023, and peaking at 5.3% in 2024,” said Olu Sonola, head of U.S. Regional Economics. Employability consists of a set of skills, achievements, experience, that render a person good enough to be hired. It involves attributes that are more likely going to help someone get a job. So to look at this term from a macroeconomic outlook, a lack of employability will lead to unemployment and this adversely impact the labor's productivity. This will lead to a downward spiral in the gross domestic product per capita of the country and eventually lead to a decline in the standard of living as well. Hence, employability is essential to a healthy growth of a country's economy. As creating jobs help the economy, a bad job market leads to a decline in the state of the economy.
Methodology
To find out the 15 states with the worst job markets in 2022, we have used the statistics published by the Bureau of Labor Statistics. We used the unemployment rates rates in December 2022, and arranged them in ascending order. The highest unemployment rate stood at number 1 in the list. Hence, we now take a look at the 15 states with the worst job markets in 2022.
15. Mississippi
Unemployment Rate in Dec 2022: 4.7
Total Unemployed: 50,208
Even though Mississippi is actively working towards improving their unemployment rate, Mississippi has a relatively low educational attainment rate, which can make it more difficult for people to find good-paying jobs.
14. Delaware
Unemployment Rate in Dec 2022: 4.8
Total Unemployed :21,710
Delaware’s economy is heavily reliant on financial services. This industry was hit hard by the COVID-19 pandemic, which led to job losses in Delaware. Also, Delaware has a high cost of living. This can make it difficult for businesses to operate in the state, which can lead to job losses.
13. Texas
Unemployment Rate in Dec 2022: 4.8
Total Unemployed: 571,199
With an extremely high number of unemployed people, Texas is considered of the states with the worst job market. The Lone Star state has been under the heat for having low protection standards for the employees. With a decelerating nationwide growth, Texas could be in trouble if a recession hits the country, especially considering its high ranking among the states with the worst job markets.
12. Connecticut
Unemployment Rate in Dec 2022: 5.1
Total Unemployed: 79,832
In December 2022, Connecticut ended up losing 1,600 jobs, and is still struggling to recover the jobs lost during the pandemic. "The Federal Reserve is attempting to slow the national economy to lower inflation, and Connecticut is participating in that slowdown as job growth slowed toward the end of the year," said Patrick Flaherty, the states' Labor Department’s Director of Research. However, with a high unemployment rate and rising costs of living, Connecticut is definitely one of the states with the worst job market.
11. Illinois
Unemployment Rate in Dec 2022: 5.1
Total Unemployed: 303,217
High taxes, high unemployment rates and a high number of unemployed people place Illinois number 11 on this list. Stagnant job growth and a large amount of missing jobs makes it hard for people to find good opportunities.
10. Michigan
Unemployment Rate in Dec 2022: 5.1
Total Unemployed: 208,388
Michigan is one of the states that have not been able to recover from the job losses that they suffered through the pandemic. They are still reeling from the adverse after effects of the economic shutdown in 2020. If this trend continues, there will be more job losses than gains for the state.
9. New Jersey
Unemployment Rate in Dec 2022: 5.1
Total Unemployed: 162,539
With a low average annual income and a high cost of living, it is no wonder New Jersey has one of the worst job markets. Here, the companies looking for people to hire are having a hard time filling up positions that are open, even through the constant distress of an upcoming recession.
8. Nevada
Unemployment Rate in Dec 2022: 5.2
Total Unemployed: 80,470
Nevada exhibits one of the highest unemployment rates in the United States of America and thus is considered one of the worst job markets in the country. With higher costs of living, people living in this state have to find higher paying jobs in order to be able to support their families through these rates. Most people are in a state of transition, trying to switch jobs, and shift from the leisure and hospitality sector as well. With inflation hitting them hard, gas prices on the rise, the job market is definitely suffering, and so is the economic condition of the state.
7. Maryland
Unemployment Rate in Dec 2022: 5.4
Total Unemployed: 127,584
Boasting an unemployment rate of 5.4 which is considered quite high, the Mid-Atlantic state finds itself at number 7 on this list of states with the worst job markets. However, upskilling might be able to help Maryland get their residents better employment opportunities.
6. New York
Unemployment Rate in Dec 2022: 5.4
Total Unemployed: 412,333
The unemployment rate of New York has suffered mainly because of COVID-19 and the industries that suffered and continue to do so are the ones that require in-person interactions such as hospitality, leisure, and construction. With unaffordable housing and slow job recovery, the job market in New York has taken a serious hit and it has become increasingly difficult for job seekers to find jobs.
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Disclosure: None. 15 states with the worst job markets in 2022 is originally published at Insider Monkey.