These 2 Cities Will Have the Worst Job Markets 5 Years From Now, According to an Economist

Everyone needs to make money to pay bills and meet financial goals, but while the construction and healthcare sectors are on the rise in terms of job growth, not all industries — or job markets — are thriving. As of August 2024, the national unemployment rate was 4.2%, up from 3.8%, according to the Bureau of Labor Statistics. The number of unemployed workers in the U.S. also rose from 6.3 million to 7.1 million.

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Certain U.S. cities seem to be bound for a worsening job market. Hiring rates, median pay and opportunities are either already lacking or showing signs of a heavy decline in the coming years.

If you’re looking for a job, these are two U.S. cities that could have the worst markets in five years, according to Dennis Shirshikov, an economics professor at City University of New York.

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Detroit

Shirshikov predicted that Detroit will face serious economic challenges in the next few years or so. The city, he said, “remains vulnerable to further downturns in the auto industry, which is facing increased competition from electric vehicle manufacturers and shifting production overseas.”

The current unemployment rate in the Detroit-Warren-Dearborn metropolitan area was 4.1% as of August 2024, according to the Federal Reserve Bank of St. Louis (FRED). According to WalletHub, Detroit is one of the worst cities to start a career due to a lack of quality career opportunities and poor quality of life. In fact, it ranked 175 out of the 182 major cities surveyed.

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Cleveland

Cleveland doesn’t rank quite as low as Detroit in terms of professional opportunities — 99 out of 182 — but Shirshikov said it’s likely to experience a significant decline going forward.

Cleveland “still struggles with population loss and slow private investment,” he said. This has restricted the development of higher-paying jobs. Shirshikov did note that the healthcare industry could be seeing a bit of a comeback, however.

According to FRED data, the Cleveland-Elyria metro area had an unemployment rate of 3.9% as of August 2024. Businesses and income have also seen some growth compared to similar cities.

However, a report by Greater Cleveland Partnership found that jobs have already become stagnant. From 2022 to 2023, the annual rate of job growth was just 1.1%.

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Cleveland and Detroit Are Recovering — But Not Quickly Enough

According to Shirshikov, both Cleveland and Detroit have been recovering from their manufacturing declines — albeit slowly. Neither city has seen significant growth in tech or other industries that would make the job markets stronger. They’ve also been growing more slowly than similar metropolitan areas.

“A heavy reliance on shrinking industrial sectors and a relatively low influx of new business development point to a difficult future,” he said.

Not all economists fully agree, however.

According to the Detroit Economic Outlook 2023-28 report, economists from the University of Michigan are “cautiously optimistic” about the future of Detroit’s job market.

“Slower national economic growth in 2024 poses risks to the local economy, but we expect Detroit’s economy to display encouraging resilience in the face of a challenging external environment,” said Gabriel Ehrlich, a co-author of the study and the university’s director of the research seminar in quantitative economics.

As for Cleveland, certain sectors are actually growing. One report found that healthcare, aerospace and manufacturing have contributed to overall job growth in the city. Newer industries to the area, like tech and green energy, have also attracted more investment and top talent. The logistics and distribution sectors may also be growing.

Other US Job Markets on the Decline

In Q3 2024, the U.S. Bureau of Labor Statistics released a report about unemployment rates in key metropolitan areas. While this metric doesn’t guarantee a declining job market in the future, it’s worth knowing if you’re trying to secure a quality job.

These are some of the key data points from that report, as of August:

• Kokomo, Indiana had the highest over-the-year unemployment rate increase amongst metropolitan areas at 6.5%.

• Los Angeles-Long Beach-Glendale, California had a 6.7% overall unemployment rate — the highest amongst metropolitan areas.

• Providence-Warwick, Rhode Island-Massachusetts had the largest over-the-year unemployment rate increase of 1.8%

• Lawrence-Methuen Town-Salem, Massachusetts saw an over-the-year unemployment rate increase of 1.5%.

• Lowell-Billerica-Chelmsford, Massachusetts-New Hampshire saw an over-the-year unemployment rate increase of 1.4%.

When it comes to the U.S. job market, there are several important factors to consider, including pay and opportunity. While certain sectors may be on the decline, others could contribute to future growth.

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