How does your garden grow? Employment growth among the States.

• Author: Marcus, Morton J.
• Position: Statistical data

Some florid orators will tell that a state's economy like a garden. It must be nurtured, weeded, properly drained or absorbent enough to withstand flooding, and with an orientation toward the beneficial rays of the sun. Thus, we may ask: how have our gardens been growing?

States are an appropriate unit of analysis because there are few metropolitan economic development commissions with major authority. Only the states themselves have the power and the resources to influence economic development in a serious fashion. This said, from a purely economic point of view, the metropolitan area is probably the best unit of analysis since serious economic effects rarely spread far beyond the borders of a given metro area.

State Employment Growth, 1996 to 2006

We consider employment as the rose of the garden. Jobs are the focus of our politicians who are (whether they know it or not) tied to the Great Depression and who see one job as equal to some multiple of that number in votes.

When discussing the economy of states, it is inappropriate to compare the growth rate of any given state to the national growth rate. The national growth rate is not the average of the fifty states, but rather the growth rate for the United States, which is the sum of employment in all of the states. This is equal to the weighted average where California's growth rate counts for nearly forty-three times more than the growth rate of North Dakota.

The national employment growth rate from 1996 to 2006 was 13.4 percent. (1) This was also the median growth rate, dividing the top twenty-five states from the bottom twenty-five. The highest rate was realized by Nevada with 52.7 percent and the lowest rate (excluding hurricane-ravaged Louisiana) was -0.2 for Michigan. Indiana was forty-third in the nation with a 6.3 percent rate of growth, half the national pace.

Figure 1 presents the employment pathways followed by four states. Many states followed the same pattern as Idaho over this period of time: A basic upward trend, interrupted by a softening of job growth early in this decade, then resumption of growth. Indiana, Michigan, and Louisiana followed their own lower but similar path until a clear divergence appeared among the three in 2002. The effect of Hurricane Katrina on Louisiana is evident for 2006. The split between Indiana and Michigan grew over the latter years of the time span. Figure 2 offers the growth rates for all states. Western states predominate as the fastest...