Area Illusion [Unemployment rates]/Paul Kurgman

Area Illusion

I’m a big fan of Gillian Tett’s work, but — such statements always come with a “but”, right? — in today’s piece she falls prey to a map trick. She looks at the divergence in unemployment rates among US states, and suggests that America is experiencing European-style divergence:

In the last few months, there has been a flurry of hand-wringing about the high level of US unemployment, currently running at about 9 per cent. But what is equally striking is the variation between regions: while some places such as North and South Dakota, or Nebraska, had rates below 5 per cent in December 2010, Florida, California and Nevada all posted rates above 10 per cent.

And it’s true that if you look at a map, it seems as if there are large regions with low unemployment:

But nobody lives there: the Dakotas and Nebraska combined have only 3.3 million people, around 1 percent of the US total.
What you really want to do is compare large US states with large European nations. And there aren’t any low-unemployment large states. Yes, there’s a divergence: New York and Texas have unemployment rates of 8.2 and 8.3 percent, respectively, while California’s rate is 12.5. But that’s nothing like the divergence between Germany, with a 6.6 rate, and Spain, with a 20.2 rate.
For the most part, all of America is sharing in this slump.