Fed Economist Examines Trends in Neighborhood Unemployment

From 1980 to 2000, unemployment in Louisville was increasingly clustered in a few neighborhoods, a trend that also mirrored the other three major Eighth District cities—St. Louis, Memphis and Little Rock. On Oct. 30, St. Louis Fed economist Christopher Wheeler presented his study, The Rising Residential Concentration of Joblessness in Urban America, at a Community Affairs-sponsored program in Louisville. The report focuses on the trends in neighborhood-level unemployment across more than 166,000 Census block groups within 361 U.S. metropolitan areas.

The research presented did not identify specific Louisville areas that were hardest hit by joblessness, but the study did reveal that the rise in unemployment was not as pronounced in Louisville as in the other three cities.

While Wheeler’s research does not pinpoint why pockets of unemployment are occurring, he offers three theories behind the rise in unemployment concentration: urban decentralization, or sprawl away from city centers; the changing industrial structure and unionization, resulting in a loss of manufacturing and other industrial jobs; and the rising incidence of segregation by income and education, or the trend for people to choose to live near others with similar income and education levels. “As we are de-industrializing, the unemployment rate tends to go up,” Wheeler said.

The forum also featured a panel discussion about recent efforts in Louisville to broaden job opportunities for those living in the most distressed areas. Michael Gritton, executive director, KentuckianaWorks, served as moderator for the facilitated panel discussion that included Kimberly Maffett, Norton Healthcare and a board member of KentuckianaWorks; Dr. Anthony Newberry, president of Jefferson Community and Technical College; Alyce French Johnson, assistant director, TARC; and Dana Jackson, Louisville coordinator of Making Connections, a community networking effort in the California, Phoenix Hill, Shelby Park and Smoketown neighborhoods.

Jackson said, “As neighborhoods go, people go, and as people go, neighborhoods go.” Since its launch in 2000, Making Connections, which relies on community organizers to educate people about job opportunities and training, has created a pipeline of workers for Louisville employers.

Kimberly Maffett noted that there is additional momentum, such as a recently announced program to train new workers (including minorities and women) over the next three to five years for an anticipated 7,700 construction jobs on projects like the downtown arena, the Museum Plaza skyscraper and the UPS expansion. “We’re going to train people from this region, not bring them in from outside,” she said.

The panelists also cited the success of other programs. For example, Anthony Newberry, president of Jefferson Community and Technical College, said 36 of 38 previously unemployed people who enrolled in a driver education course at C.W. Johnson Xpress earned a commercial driver’s license.

While industry shifts, declining union activity and sprawl per se are of limited importance, transportation time does seem to be a significant factor for those seeking work in high-unemployment areas. Wheeler suggests the following strategies be considered to eliminate higher concentrations of unemployment in distressed areas: creating, operating and subsidizing public transportation to ease movement around local labor markets; encouraging mixed-income housing; and bringing jobs closer to high-unemployment areas.