What do New York City, Des Moines, and San Francisco have in common? All three were relatively good places for people with less than a high school diploma to find employment during the Great Recession of 2007-2009. Perhaps not coincidentally, all three are among the 20 metropolitan areas with the highest share of college employment in the United States.
An interesting new report by Alan Berube at Brookings breaks down trends in employment among 100 diverse metropolitan areas in the United States to understand which workers fared the worst, and where they live. The report finds, among other things, that employment declines were much steeper among the less educated workers (2 points) than among college educated workers (.5 points).
Living in a metropolitan area with more educated people was slightly protective for lower educated workers (but the trend was far from uniform). The areas where it was worst to be a lower educated worker were concentrated in the Sun Belt and manufacturing areas, while the areas that were worst for college educated workers were actually areas with large, diverse labor markets (such as Los Angeles and San Diego).
Before 2007, there were larger trends in the structure of the American economy that the recession likely accelerated. Berube writes:
“The Great Recession may have continued, or accelerated, a longer-run trend in these areas of declining job opportunities in middle-skill white- and blue-collar occupations. Metro areas with concentrations in manufacturing employment, such as Toledo, Grand Rapids, Greensboro, Dayton, and Seattle, seemed especially susceptible to this outcome.”
The report recommends a number of fairly vanilla policies to address the effect of the recession for lower educated workers such as job retraining. To my mind, the big question is why not encourage lower educated workers to move to expanding labor markets? This is a recommendation made by several people including former President Bill Clinton. Paul Krugman took issue with this suggestion back in September, claiming that “structural” explanations for unemployment were unfounded and distracted from the lack of policy resolve to stimulate the economy. But this report at least provides some evidence that there is some large, spatial mismatch in the labor market. Finding ways to get people to jobs is not a substitute for a second large-scale stimulus that would boost short-term employment, nor is it a substitute for investments in education that would boost long-term employment, but it’s a start.