Here Are the 10 Best (and Worst) Cities Ranked By Economic Recovery

When the COVID-19 outbreak began and governments started imposing economic lockdowns, most parts of the country experienced huge upticks in unemployment. But how have different cities fared in the year since? A new report from WalletHub offers some insight.

The financial analytics firm looked at cities’ most recent unemployment rates, from May 2021, and compared them to their pre- and mid-pandemic unemployment rates from May 2019, May 2020, and January 2020. Using the national unemployment rate of 5.9 percent as a standard, this gives us a useful comparison showing how different cities have recovered from the pandemic and ensuing economic damage.

Here are the top 10 cities with the best post-pandemic unemployment rates as of May 2021:

1. Manchester, New Hampshire: 1.6 percent
2. Nashua, New Hampshire: 1.7 percent
3. Burlington, Vermont: 1.3 percent 
4. South Burlington, Vermont: 1.2 percent 
5. Lincoln, Nebraska: 2.2 percent 
6. Huntsville, Alabama: 2.4 percent 
7. Omaha, Nebraska: 2.8 percent 
8. Salt Lake City, Utah: 2.7 percent 
9. Sioux Falls, South Dakota: 2.7 percent 
10. Billings, Montana: 3 percent

And, in stark contrast, here are the 10 cities with the worst post-pandemic unemployment rates as of May 2021:

1. Hialeah, Florida: 8 percent 
2. New Orleans, Louisiana: 11 percent 
3. Long Beach, California: 10.6 percent
4. Glendale, California: 10.4 percent 
5. Newark, New Jersey: 11.6 percent 
6. New York City, New York: 9.8 percent 
7. Los Angeles, California: 10.1 percent 
8. San Bernardino, California: 9.6 percent 
9. Chicago, Illinois: 9.3 percent 
10. North Las Vegas, Nevada: 9.9 percent 

What explains the wide discrepancy between the cities who have essentially entirely recovered and those that remain deep in the red? Well, there are undoubtedly many factors influencing these cities’ unemployment rates, but two glaring ones stand out.

Economies are complex systems, and cannot simply be switched on and off like a light switch. Those cities whose governments strangled economic activity over an extended period of time and hoped it would all come back when they decided to “open up” are clearly still experiencing the economic pain.

Secondly, the availability of ultra-generous unemployment benefits that pay many unemployed people more to stay home on welfare surely has had some influence on these rankings. States like New Hampshire with cities ranking highly have announced that they would end these benefits early, whereas states like California, Illinois, and New York have left them in place. The clear work disincentive presented by an unemployment system where households can earn the equivalent of $25/hour in many states has surely led to prolonged and heightened unemployment in the states which continue to embrace it.

Of course, there are many complex causes of city-level variations in unemployment rates and the economic recovery. But time and time again across these statistics and, frankly, the entire global economy, we see that areas with freer markets and less interference prosper more than those stifled by government control.

This article was originally published on FEE.org. Read the original article.

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