State Policy Network
SPN State Job Report: November shows mixed results in states’ job recoveries
SPN’s new State Job Report shows that while states continue to add jobs, they can do more to drive economic recovery.

The United States added 245,000 jobs in November 2020, a drop in growth rate from the previous six months of economic recovery. Despite the slower pace, the jobs recovery churned onward for the majority of states, with two out of three states adding jobs in November.

The economy’s slowing growth put stress on families for the holiday season. Only one-third of Americans think the economy is in good or excellent shape as of mid-November, when the Bureau of Labor Statistics (BLS) jobs collected data. America’s slowing jobs engine is particularly concerning because there are still 9.6 million fewer jobs compared to the beginning of 2020, a massive opportunity gap left in the wake of the pandemic recession. However, policymakers have levers to pull to drive recovery.

Job report shows majority of states are putting Americans back to work

Texas gained 61,000 jobs to lead all states in job growth, followed by California (57,100), New York (29,500), and Ohio (29,400). Hawaii’s 13,900-job gain was the best November jobs performance of any state on a per-capita basis, a welcome bright spot for the Aloha State. It’s worth noting, however, that Hawaii’s tourism-driven economy still significantly lags all other states in putting citizens back to work over the duration of the recovery.

On the negative side of the ledger, Illinois (-20,000), Minnesota (-12,600), Michigan (-10,700) and Iowa (-10,100) all shed more than 10,000 jobs in November.

More progress is needed for states to recover lost jobs

Job performance can fluctuate significantly from month-to-month. Over the coming years, states should focus on recovering all the jobs they lost during the pandemic recession and advancing new ways to add jobs. Growth-friendly economic policies can prevent job loss and catalyze the strong, steady job growth that is the key to a comeback.

No states have regained the jobs numbers they had at the beginning of 2020, though Idaho and Utah are closing in on that goal.

Key Takeaways:

How states can prevent job losses and drive economic recovery

State policymakers should exercise caution when imposing economic restrictions and stay-at-home orders. Multiple studies tie those government restrictions to economic losses. While the rising tide of the pandemic itself is the primary cause of economic contraction, government policies can worsen the situation and contribute to excess job losses.

In 2021, hundreds of millions of Americans will be vaccinated against the coronavirus and Americans will increasingly return to regular life. They will want the robust, broad economic growth that existed before the pandemic hit. Policymakers can do their part in creating such success.

State policymakers should focus on torts, tax, and tape to get their recovery right. This means states should create lawsuit protection for small businesses, enact commonsense tax relief to catalyze growth, and make their economy more efficient by cutting through the tangle of red tape that can tie up entrepreneurs and workers.

In addition, state budget season is just around the corner and governors will present budget proposals in the first months of 2021. This will bring a reality check for profligate states where spending reform was long overdue before the pandemic hit. Although Congress agreed on a new aid package that includes $106 billion in revenue for education and transit, they stopped short of providing discretionary grants for state and local governments.

In short, states that entered the pandemic recession with mismanaged finances should finally improve their long-run trajectory by putting their fiscal houses in order. The American economy works best when all states achieve high growth, and commonsense policy reforms can let all states enjoy the blessings of growth that are now flowing to better-managed states.

Related Commentary

SPN State Job Report: How many jobs must states reclaim to return to pre-pandemic levels?

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Categories: Policy Issues
Organization: State Policy Network