High Unemployment Could Plague Midwest for 10 Years


"Although it will take us awhile to recover we don't believe it will take us 10 years," Herwat said. The metro economies report "takes a look at a lot of statistical measures and doesn't take a look at what is really happening within cities."

Diffley explained that the manufacturing industry had an "incredible number of layoffs" in late 2008 and 2009 that outpaced the number of workers needed for production. Even without the recovery, those companies had to increase hiring to keep up with sales, which made cities like Detroit and Dayton appear to be recovering faster than anywhere else in the country.

"The magnitude of cycle was sharper, a sharper fall and a sharper increase," Diffley said.

For the first quarter of 2011 Detroit's unemployment rate dropped 3.5 percentage points, more than any other city in the country, but after having lost 18 percent of its jobs in the past 10 years, this growth in employment was just a drop in the bucket.

"People get really excited. They say here's a plant that's going to hire 600 people, but we've lost hundreds of thousands of jobs," said Rick McHugh, a staff attorney for the National Employment Law Program. "If you were wackin' them by tens of thousands of jobs per month you cannot recover when the economy is only adding a couple thousand jobs nationally."

"The consensus is that manufacturing employment is going to continue over the long term to decline," Diffley said. "In the midwest Rust Belt states it's hard to see where any new growth will come from."

In 2009 Michigan's unemployment rate hit a 10-year high at 14.1 percent. Indiana reached 10.9 percent unemployment and Ohio got to 10.6 percent.

Asher said Ohio will definitely be a state to watch during the general election because while Cleveland is one of the strongest Democratic sections in the state, the slow recovery and high unemployment rates could mean bad news for President Obama.

The metro economies report predicted that Cleveland would be one of the slowest major metro areas to recover to pre-recession unemployment levels, a statistic the city of Cleveland disputes.

In 2008 the president won Ohio by 4 percentage points, but Republicans won back five House seats, a senate seat and the governor's mansion.

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