Stateline Story

Unemployment Hits Tourist, Western States Hard

  • November 20, 2001
  • By Jason White
Unemployment rates increased or remained level in 42 states during October, with the sharpest rate jumps occurring in Hawaii and Nevada, according to data released Tuesday by the U.S. Bureau of Labor Statistics.

Nationwide, the jobless rate rose to 5.4 percent, up a half-percent from September's 4.9 percent rate.

"There is concern that anytime you have increases in your employment rate you have disruptions to your wage earners," said Arturo Perez, fiscal analyst for the National Conference of State Legislatures. "Behind these numbers are families and individuals that are going to be affected."

Four states reported unemployment rates of 6.0 percent or more in October. All are in the western United States.

Washington recorded the nation's highest unemployment rate, 6.6 percent, a half point increase over September's 6.1 percent rate. Oregon followed at 6.5 percent, and Nevada and Alaska came in at 6.3 and 6.0 percent respectively.

"We are looking at Washington's figure as one of the first significant demonstrations of the weakening or softness in the state's economy," said Gary Kamimura, spokesman for Washington's Employment Security Department. "That softening had been starting since the beginning of the year. But we hadn't anticipated such a jump."

Kamimura said the causes behind October's sharp uptick include a "significant and atypical" pullback in two sectors -- construction, especially trade contracting, and services, including computer and temporary help.

Washington's unemployment figures do not include layoffs in the aerospace industry, which have been announced but not yet implemented. The aerospace sector plans to layoff as many as 30,000 employees beginning in mid-December, said Kamimura, which could lead to as much as a one percent increase in the state's unemployment rate.

Hawaii's unemployment rate grew 0.9 percent, due mainly to a dropoff in tourism and related activities. The state's situation is dire enough that Gov. Ben Caytano convened an economic summit in late October to brainstorm ways to kickstart Hawaii's tourism-dependent economy. Many analysts, however, think it will be at least a year or two before the state's economy turns around.

Nevada, another state whose lifeline is connected to the tourism industry, had the biggest increase at 1.5 percentage points. Total employment in the state fell 11,300 during the month, with hotels and gambling industries accounting for the full measure of the decline.

"Layoffs in Las Vegas are due to a loss of tourism following Sept. 11," said Karren Rhodes, spokesperson for the state's Department of Employment Training and Rehab. "We were beginning to see weakness before Sept. 11, just as the rest of the nation was, but the attacks just hit people harder here."

There were a few bright spots in October's unemployment figures. Eight states saw their unemployment rates fall. And New England and the North Central states, which include the Dakotas and Nebraska, reported regional rates below 4.0 percent.

The success of North Dakota -- which at 2.0 percent boasted the nation's lowest unemployment rate -- and surrounding states stems in part from their economic distance from the events of Sept. 11.

"There's not a lot of exposure to the airline industry, to tourism, to the technology industry," said Steve Cochrane, senior economist for Economy.com, an economic consulting group. "On the positive side, farm prices are holding steady right now."

"That area probably has the farthest economic distance to the events of Sept. 11."