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D.C. unemployment rate increases overall number for Washington metro area

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By V. Dion Haynes
Wednesday, February 3, 2010

Unemployment in the Washington region rose slightly in December, to 6.2 percent, according to government data released Tuesday, pushed up largely by an increase in the District's jobless rate.

The District's unemployment level during the same period rose from 11.8 percent to 12.1 percent and probably was the chief factor in bumping up the metropolitan area's overall jobless rate by 0.1 percentage point.

"The District represents a small fraction of the overall population of the metro area, but it represents a higher proportion of the area's unemployment," said Anirban Basu, chairman and chief executive of Sage Policy Group, a Baltimore-based economic and policy consulting firm.

Calling the city's 12.1 percent unemployment rate a "crisis," D.C. Council members introduced legislation Tuesday aimed at augmenting President Obama's proposed tax incentive to small businesses that create jobs. Under the council's measure, small businesses or corporations that agree over the next five years to hire 10 employees at salaries of at least $55,000 would receive a credit on their business franchise tax equivalent to half the amount they pay in federal payroll taxes -- or about $2,100 per new worker.

"No matter where you are in the city, unemployment is a crisis," council member Kwame R. Brown (D-At Large), who drafted the legislation, said at a news conference. Though the unemployment rate is only 3.2 percent in Ward 3, which includes Friendship Heights and Chevy Chase, and 5.9 percent in Dupont Circle's Ward 2, according to November data from the D.C. Department of Employment Services, it is high elsewhere in the city -- reaching 28.5 percent in Ward 8, which includes Anacostia.

"It's a citywide problem, one that we need to tackle together," he said.

The aim, officials said, is to reduce the unemployment rate by two percentage points and add about 6,600 jobs.

The region's 6.1 percent jobless rate was well below the national rate (not seasonally adjusted) of 9.7 percent in December. Analysts expect the federal government, which has protected the region from the full extent of the recession, to fuel major job growth in the future.

In a report issued last week, Woods & Poole Economics projected that the Washington area -- along with New York, Los Angeles, Houston and Dallas -- will be among the leading metropolitan areas in job growth from 2011 to 2040. The number of jobs in the region is predicted to increase 49 percent, to 5.9 million from 3.9 million.

Jobs would be created in the federal government as well as health-care, professional and business services, local and state government, and construction, the report said.

The Washington area "has a long history of growth, and we expect that to continue," said Martin K. Holdrich, a senior economist at Woods & Poole.

Economic development officials and community organizers, however, point out that hiring probably will not occur uniformly across the region and probably will exacerbate the disparity between the top and bottom wage earners. White-collar jobs for highly educated, highly skilled employees are growing, but the number of jobs is shrinking for undereducated workers with less skill.

"Many District residents do not work in the federal government and don't benefit" from the expansion of the workforce, added Basu, the economic analyst. "District residents appear to have been more impacted than other residents in the region by the downturn in retail and construction."

Overall, the number of unemployed people in the region remained steady at about 191,000, said Glenn Wingard, an economist at Moody's Economy.com.

Sectors that experienced a net gain in jobs from December 2008 to December 2009 were the federal government (13,000) and education and health (4,400). Those that experienced net losses during that period were construction (-14,000), financial services (-5,400) and retail (-6,800). Professional and business services were flat.

Unemployment "seems to be peaking, which is good," Wingard said.


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