Is unemployment in Ward 8 really the highest in the US, as Bloomberg recently reported? Nope. In fact, it isn’t even the highest in D.C. , if we use the most up to date data.
The unemployment rate, a common shorthand for economic health, is one of the ways we know that the Washington region weathered the recession better than most metropolitan areas. It also shows that some areas of the District and the region are struggling. Yet the Bloomberg claim that Ward 8 is worse off than the El Centro, Calif. metropolitan area is wrong for two reasons.
First, the claim suffers from an apples to oranges comparison problem. Comparing one ward, a very small part of our region, to entire metropolitan areas simply doesn’t make sense.
The second problem is that the official ward-level unemployment rates are calculated using old data.
Currently, the District calculates these rates thusly: Every month, the U.S. Bureau of Labor Statistics (BLS) samples D.C. residents and estimates unemployment for the District as a whole. Then the D.C. Office of Labor Market Research and Information takes the BLS numbers and, using ratios derived from Census 2000, estimates the unemployment rate for each ward.
Of course, the District has changed in some pretty significant ways over the last decade. Using outdated ratios obscures the actual distribution of employed and unemployed residents across the District.
Ward-level unemployment estimates can be made using more recent figures — specifically the 2005-2009 five year averages from the Census Bureau’s American Community Survey(ACS), the most recent available (unfortunately, the 2010 census does not cover employment status). Using more recent data reveals some new insights on unemployment in DC, especially east of the Anacostia River.
| Unemployment Rate for January 2011 (not seasonally adjusted) | |||
| Using Census 2000 ratios | Using 2005-2009 ACS ratios | Percentage point difference | |
| Ward 1 | 8.8% | 7.9% | -0.9 |
| Ward 2 | 5.0% | 4.7% | -0.3 |
| Ward 3 | 2.7% | 3.6% | 0.9 |
| Ward 4 | 8.3% | 8.4% | 0.1 |
| Ward 5 | 13.6% | 14.2% | 0.7 |
| Ward 6 | 10.0% | 9.4% | -0.7 |
| Ward 7 | 17.2% | 20.7% | 3.5 |
| Ward 8 | 25.2% | 18.6% | -6.7 |
| Source: Office of Labor Market Research and Information, Current Population Survey, American Community Survey | |||
Two points jump out. First, the unemployment rate in every ward is different from official estimates, particularly in wards 7 and 8. Second, unemployment is worse in Ward 7 than in Ward 8, a reversal of our previous understanding that Ward 8 has had the highest unemployment in the city.
The new estimates of 20.7 percent unemployment in Ward 7 and 18.6 percent unemployment in Ward 8, while lower than previously thought, show that those two wards are still in crisis, and Mayor Gray was right to highlight the need to work together to make sure all residents experience the revitalization of the District.
The first step to addressing a problem is to understand the context. We encourage the city to use this method, or something similar, to take advantage of the availability of new data from the Bureaus of Labor Statistics and the Census Bureau.
