3 States With Super-Low Unemployment Rates

For one state, the backstory shows that statistics can be deceiving

Aug 23, 2014 at 4:00PM

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Flickr / Andreas Klinke Johannsen.

Although the national unemployment rate is trending downward, there remains a large disparity between the jobless rates among the 50 U.S. states. While some states – like Georgia, Michigan, Nevada, and Rhode Island – still have unemployment rates well above the national average of 6.2%, others are reporting jobless rates of well under 4%.

While the energy boom is responsible for ultra-low jobless rates in states like North Dakota, and, by extension, South Dakota, the reasons behind the stellar numbers for Nebraska, Utah, and Vermont are not as obvious.

Nebraska: 3.6%
Nebraska has proved itself to be nearly immune from the effects of the Great Recession, and has never reported an unemployment rate above 4.9% in the last 10 years. Even when the U.S. rate touched 10% in October, 2009, Nebraska enjoyed a jobless rate of less than half the national average. 

What has made Nebraska so resilient? In a word: agriculture. The state has stepped up its exportation of agricultural products and livestock recently, as well as other goods and services. From May 2013 to May 2014, the state increased the value of its exports from $675.9 million to $772.7 million, according to state officials. 

Another reason that Nebraska has suffered less than other states is that real estate values there did not plummet, as they did in other agricultural states, like California. 

Utah: 3.6%
Unlike Nebraska, Utah experienced high unemployment during the throes of the Great Recession, but has bounced back with vigor. Much of this rebound has been due to the efforts of the state's governor, Gary Herbert.

In an interview last summer with The Economist, Herbert recounted how the state's diverse economy, highly skilled workforce, and can-do attitude has helped pull Utah out of the economic slump it fell into during the post-crisis years. Just recently, the state has met the Governor's challenge to create 100,000 jobs in only 1,000 days – with the biggest job growth in sectors such as construction, and information services.

Vermont: 3.7%
Despite its wonderfully low unemployment rate, all is not well in Vermont. Though all three of the states under discussion saw their jobless rates tick upward a bit in July from the prior month, Vermont is the only one that has seen its rate rise since April of this year.

Unfortunately, the reason for the state's low unemployment rate lies less with a vigorous economy than with a dwindling labor force. In fact, things are so bad in some parts of the state that Vermont officials speak of "two Vermonts". One, such as the Burlington area, is doing quite well. But in scenic Newport, which borders Canada, joblessness abounds. 

Recently, Vermont's economy has grown even weaker, and Governor Peter Shumlin has warned of budget cuts. This may cause even more able-bodied workers to flee the state, which has seen its labor force drop to 351,000 from the October 2009 level of 357,000. 

The difficulties being experienced by Vermont, despite its statistically low jobless rate, highlights how checkered the economic recovery has been – and continues to be – across the U.S. Similarly, the stories of these three states also show that tackling the unemployment problem head-on, like Utah has done, can produce stellar results.

Though there are geographic and other differences between states that surely influence their economies, I can't help but think that troubled states could learn something from their more successful brethren. With two-thirds of the country lagging behind in the area of job recovery, however, much more than advice-sharing will be needed before a full national recovery truly gets under way.

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