Wednesday, April 20, 2011

Miami vs. Detroit

If you’re out of work, you’re better off in Detroit than in Miami.

Detroit has become the poster child of America’s economic downturn, in much the way Miami became the poster child for the national housing crash. With the recession over, it looks like depressed auto sales are easier to recover from than a burst housing bubble.

A year ago, Detroit was at 14.5 percent unemployment, two points higher than Miami-Dade’s. Now the math has reversed. Miami-Dade is at 12.9 percent unemployment but Detroit is down to 11.1 percent. The states with the highest unemployment rates in Tuesday’s federal report — California, Florida and Nevada — are also the states with the highest run-up in housing during the boom years.

A closer look at the numbers shows some encouraging signs for Miami-Dade versus the Motor City.

One of the main reasons that Detroit’s unemployment rate went down is because its labor pool dropped, too. That is, the number of people either looking for a job or working declined from a year ago— down 2.8 percent. Hiring only went up 1 percent.

That’s usually not a good sign, suggesting either people are moving out of town or are so discouraged by the hiring climate they’ve given up looking.

In Miami-Dade, though, the labor pool grew 1.1 percent in a year, while hiring went up 3.3 percent. That’s an encouraging trend when both measures increase, but the combination makes it harder to lower the unemployment rate.

Still, Detroit’s rosier jobs figure hits a nerve in Florida, which has long enjoyed booming status while Michigan languished in a rust-belt malaise. In December, that officially changed on the hiring front as Michigan’s unemployment rate inched below the Sunshine State’s.

One of the problems Detroit has over Miami is image: it’s hard to look like you have a bad economy when you can take a picture of an unemployment line under a palm tree.