Guest Blog: Unemployment in Ward 8 is high, but not worst in the nation or even the District

April 4th, 2011 | by Benjamin Orr, Research Analyst at the Brookings Institution

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  Using outdated ratios obscures the actual distribution of employed and unemployed residents across the District.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.

20 Responses to “Guest Blog: Unemployment in Ward 8 is high, but not worst in the nation or even the District”

  1. Chuck Bean says:

    Benjamin, thank you for this insightful article, and thanks to DCFPI for this post and all of the analysis you bring to the District.

  2. [...] rate is not the highest in the nation or even DC writes the Brookings Institution’s Benjamin Orr on the DC Fiscal Policy Institute blog. The post responds to Bloomberg’s recent article that stated that Ward 8 had the highest [...]

  3. Travis M says:

    Interesting. Could you go into more detail on how the district-level unemployment rate is converted into ward-level unemployment rates using the “ratios”? Do the ratios deal with the characteristics of Ward residents, e.g. education, sex, race, or only the population counts? Also, is there a way that we could get confidence intervals for these statistics? It seems that the confidence intervals have to be very wide, at least using monthly data, so it may be difficult to claim that Ward 7′s unemployment rate is actually greater than Ward 8′s. I’m just looking now and seeing that DC’s monthly 90% confidence interval is +/- 1 percent ( http://www.bls.gov/lau/lanrderr.pdf )

  4. Jacque D. Patterson says:

    I am curious to know if your stats take into account the number of actual Ward residents that are unemployed or does it take into account only those who have lost a job and are currently looking for a job or are receiving unemployment benefits? How does this report document those residents who are not documented in BLS or DOES as unemployed, yet are in fact DC residents and can not find work?

  5. [...] in D.C., the unemployment rate citywide was 9.6 percent in January. In predominately black Wards 7 and 8, [...]

  6. [...] of Washingtonians without work altogether; the Ward 7 unemployment rate, for instance, was about 20 percent in April. So although the District may appear to be a beacon of economic recovery to those across the [...]

  7. [...] the ward with the highest concentration of black residents — Ward 7 –  also has the highest unemployment rate. It’s difficult to isolate race and class when faced with such stark [...]

  8. [...] the poet Ezra Pound and singer Marvin Gaye. Today the area’s unemployment rate is officially nearly 20%. District-wide, it’s 9.8%, a figure that drops as low as 3.6% in the whiter, more affluent [...]

  9. [...] the poet Ezra Pound and singer Marvin Gaye. Today the area’s unemployment rate is officially nearly 20%. District-wide, it’s 9.8%, a figure that drops as low as 3.6% in the whiter, more affluent [...]

  10. [...] the poet Ezra Pound and singer Marvin Gaye. Today the area’s unemployment rate is officially nearly 20 percent. District-wide, it’s 9.8 percent, a figure that drops as low as 3.6 percent in the whiter, [...]

  11. [...] the poet Ezra Pound and singer Marvin Gaye. Today the area’s unemployment rate is officially nearly 20%. District-wide, it’s 9.8%, a figure that drops as low as 3.6% in the whiter, more affluent [...]

  12. [...] the poet Ezra Pound and singer Marvin Gaye. Today the area’s unemployment rate is officially nearly 20 percent. District-wide, it’s 9.8 percent, a figure that drops as low as 3.6 percent in the whiter, [...]

  13. [...] the poet Ezra Pound and singer Marvin Gaye. Today the area’s unemployment rate is officially nearly 20%. District-wide, it’s 9.8%, a figure that drops as low as 3.6% in the whiter, more affluent [...]

  14. [...] the poet Ezra Pound and singer Marvin Gaye. Today the area’s unemployment rate is officially nearly 20%. District-wide, it’s9.8%, a figure that drops as low as 3.6% in the whiter, more affluent [...]

  15. [...] the poet Ezra Pound and singer Marvin Gaye. Today the area’s unemployment rate is officially nearly 20%. District-wide, it’s 9.8%, a figure that drops as low as 3.6% in the whiter, more affluent [...]

  16. [...] Even a number of impoverished by ward that DC provides any month is deeply flawed. Each month, a sovereign Bureau of Labor Statistics samples DC residents and reports stagnation for DC. The DC Office of Labor Market Research afterwards allocates that series to any sentinel formed on prehistoric ratios from a final census. Ben Orr of Brookings has shown that a ensuing numbers of jobless by sentinel are infrequently extravagantly inaccurate. [...]

  17. [...] did the poet Ezra Pound and singer Marvin Gaye. Today the area’s unemployment rate is officially nearly 20 percent. District-wide it’s 9.8 percent, a figure that drops as low as 3.6 percent in the whiter, more [...]

  18. [...] Wal-Mart is planning to set up shop, unemployment is the highest in the city at 20.7% according to Brookings Institute of Research.  If local politicians demand that Wal-Mart stores reserve the majority of these jobs for DC [...]

  19. [...] the poet Ezra Pound and singer Marvin Gaye. Today the area’s unemployment rate is officially nearly 20%. District-wide, it’s 9.8%, a figure that drops as low as 3.6% in the whiter, more affluent [...]