State Policy Network
SPN State Jobs Report: 49 states gain payroll jobs in March
For the first time in recent months, job creation largely reflected the size of state economies.

The March Bureau of Labor Statistics (BLS) jobs report revealed a strong month of broad-based jobs growth across the states, with 49 states achieving a monthly gain in payroll jobs. For the first time in recent months, job creation largely reflected the size of state economies, with California and Texas leading and other large states scoring near the top for total jobs gained.

The longer-term picture, however, still reflects greater labor market pain in states that rely on tourism and in states that enacted the most burdensome lockdown policies. In fact, the five worst states for overall jobs recovery are also the five worst states for recovery of leisure and hospitality jobs. Nearly half of the country’s remaining job losses are in the leisure and hospitality sector.

Idaho and Utah remain the only states that have fully recovered the total jobs count they had in January 2020, before the pandemic recession struck. Strong job creation, economic reopening, and state economic reforms can help achieve more growth and will allow more states to cross the jobs recovery finish line in coming months.

Jobs recovery marches on

The US economy created 916,000 jobs in March, the best month of jobs creation since August of 2020. Broad national strength contributed to gains in every state except Alaska, which showed a loss of only 200 jobs. California led with 119,600 jobs gained, followed by Texas (+99,000), New York (+63,700), Florida (+32,200), and Illinois (+32,200).

On a percentage basis, New Mexico (+1.3%) and Oregon (+1.1%) had the strongest showing in March, followed by Hawaii, Iowa, and Oklahoma (+1.1%).

State recovery gaps remain

Forty-eight out of 50 states still have fewer jobs than they did in January 2020, before the pandemic recession hit. Idaho (+1.4%) and Utah (+0.8%) are the only states to have made a full jobs recovery, and they exceed their previous jobs peak. Montana had a strong gain in March, leaving the Treasure State poised for recovery with only 7,100 fewer jobs (-1.5%) than it had before the pandemic. South Dakota (-1.6%), Arkansas (-2.5%), and Nebraska (-2.5%) are close behind.  

The worst states for recovery largely remain the same as in previous months. In terms of sheer job loss, California still has 1.5 million fewer jobs than in January 2020, while New York has 1 million fewer jobs. The worst states for jobs recovery are Hawaii (-16.9%), Nevada (-10.0%), New York (-10.0%), California (-8.4%), and Vermont (-8.3%). These five states also have the worst recovery of leisure and hospitality jobs, the sector most heavily hit by the pandemic recession. Hawaii and Nevada are the most heavily dependent on leisure and hospitality jobs as a portion of total state payroll jobs, followed by Florida. The Sunshine State’s middle-of-the-pack recovery (-5.6% fewer jobs compared to January 2020) has been allowed by fewer restrictions and strong in-migration of residents from other states.

What states can do to close the jobs gap

The jobs recovery gap remains large between states. Many states with lagging jobs recoveries have achieved strong jobs growth in recent months. Yet states that have enforced prolonged economic restrictions are dramatically behind on jobs recovery.

States should target funds from the American Rescue Plan Act (ARPA) towards replenishing their unemployment trust funds, if allowed by Treasury guidance, to prevent a pending tax increase on business payrolls that is triggered in states with depleted funds. States should also look for creative ways to provide enduring tax reform within the guardrails allowed by forthcoming Treasury Department rules and guidance.

Lawmakers across states continue to enact tort liability protections, which will ensure that small businesses and first responders do not face frivolous lawsuits related to the pandemic. There should also be a focus on cutting red tape, for example by easing the burden of occupational licensing and creating regulatory reforms to fast-track business innovation. Although the health crisis from the pandemic continues to subside, the economic crisis of lost opportunities will endure, and policymakers have a critical role to play in allowing opportunity to flourish again.

Categories: Policy Issues
Policy Issues: Jobs
Organization: State Policy Network