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States with worst jobless rates share root causes

Unlike the last recession, today's unemployment hot spots are all over the map.

The five states with the highest unemployment rates — Michigan, Rhode Island, South Carolina, California and Oregon — all have something in common, though: a heightened exposure to the root causes of this downward spiral.

The collapse of housing. The implosion of the auto industry. The meltdown of financial services. The exodus of manufacturing.

All states are feeling the pain, but the worst are getting hammered on multiple fronts.

Housing: The rotten housing market has punished California lenders and builders, taken an ax to Oregon's timber industry and soured the prospects for construction workers in Rhode Island, where buyers from neighboring states helped drive up home prices.

Manufacturing: The steady decline of the manufacturing sector has punished Rhode Island and South Carolina, where laid-off factory workers lack the training and job opportunities in an increasingly high-tech economy.

Autos: The auto industry's pain is Michigan's above all. But it is also being felt in states such as South Carolina, where German automaker BMW has cut 500 temporary workers, and in California, where many dealerships have shut down.

"What makes this a different recession," said Rebecca Blank, an economist at the Brookings Institution, "is that it is so widespread."

During the 2001 recession, which was largely tied to the dot-com collapse, the West had a disproportionate amount of the jobless burden: Oregon, Washington, Alaska and California (which was tied with Washington, D.C., and Mississippi) had the highest jobless rates.

One region of the country has largely avoided the country's real estate and manufacturing woes, and as a result has been spared the worst of the recession's pain.

A cluster of rural states — Wyoming, North Dakota, South Dakota, Nebraska and Utah — had the lowest unemployment rates in November, ranging from 3.2 percent to 3.7 percent. The Labor Department on Friday said the national jobless rate in December was 7.2 percent.

Historically high prices for energy and grains have helped their economies, although recent declines in commodity prices are beginning to bite, economists said.

Lincoln, R.I., resident Larry Miller thought he would retire from the auto parts manufacturer where he first got a job as a newly married 26-year-old. That was two factory closings ago, the most recent being a plant owned by KIK Custom Products, which also had employed his wife.

"The word loyalty is gone," said Miller, shaking his head. He found a new job in Massachusetts, but his wife is still looking.

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