U.S. Economic Crisis: Job Losses led to Financial Woes, Resulting in Population Declines

U.S. Economic Crisis
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The U.S. economic crisis led to many problems in the U.S. in 2017, including unemployment and population loss. According to the U.S. Census Bureau, Puerto Rico, Wyoming, West Virginia, Alaska, and Illinois states observed the maximum decline in their populations.

The reasons behind the population decline vary, though two major ones are high death rates and low birth rates. Some states are seeing a population exodus because of job cuts as people migrate elsewhere. Most states experienced a form of the U.S. financial crisis because of this situation. All of this factors in to these states’ economic decline.

Hurricane’s Effect on Puerto Rico: Destruction Led to Huge Financial Crisis

While still recovering from Hurricane Irma, Puerto Rico was then hit by Hurricane Maria on September 20. The most powerful hurricanes recorded in the Caribbean, the effect on Puerto Rico was devastating.

The category four storm caused massive flooding, destroying the electric supply, cell phone towers, and the state’s entire infrastructure. The humanitarian disaster led to massive job losses, which in turn caused a substantial financial crises on the island.

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Puerto Rico’s population fell by 11% and the overall economy declined by 15% in 2017. As a result, the government was unable to pay its bills, leaving Puerto Rico in debt.

Job Losses in Mining and Oil Industry Resulted in Economic Crisis in Wyoming

Census Bureau data revealed that Wyoming’s population declined by one percent in 2017, which is the largest decrease since 1989 and the steepest of any state in 2017.

The state began 2017 suffering a decline in the mining and oil industry, which brought Wyoming’s economy down with it. Due to this, the state experienced a decrease in population (due once again to migration) and a rise in unemployment. However, Wyoming went on to add over 1,000 jobs in the middle of the year, showing signs of improvement.

West Virginia Economic Decline: Shut Down Of Coal Mines Led to Job Losses

West Virginia has observed a steep decline in its economy since the closure of its coal mines. There was a 0.5 % fall in the state’s employment from 2012 to 2014 due to massive layoffs in the coal mining industry. In November 2016, the overall unemployment rate was six percent, the fourth-highest among the 50 states.

Because of the financial crisis, people aren’t coming in and young people are migrating in search of jobs to the other states. Decline in business has also resulted in a drop in population, though West Virginia’s population decline in 2017 is more tied to its aging population, as the state death rate is higher than the birth rate.

Alaska’s Economic Decline is a Results of State’s Recession and Unemployment

State, university, and private economists forecasted that Alaska’s recession will not end in 2017, but instead last through 2019. It is expected that the state will lose six to seven percent of available jobs before it comes out of its recession. In 2015 and early 2016, Alaska experienced job losses prominently in the oil and gas sectors, and later in 2016, job losses started spreading to other economic segments, like the retail sector.

At present, Alaska is facing an annual deficit of about $3.0 billion. Moreover, the state’s available savings accounts are running low. As a result, a significant action is expected this year in order to help with stabilizing this situation. Otherwise, it may lead to unemployment, which will eventually harm Alaska’s economy further.

Illinois Economic Decline: High Tax and Sluggish Employment Contributed the Most

Illinois, the sixth most populous state in the union, observed decline in its population for the fourth consecutive year. It lost the highest number of people than any other state in the union.

Residents walked away as the state’s politicians struggled to fix its finances. Now Illinois is under a mountain of debt and holds unmet pension obligations; reports state it has $250.0-billion public pension debt.

Decline in investment of the state is causing weaker wage growth. Income tax revenues are also expected to increase. Lower after-tax returns on investment reduce investment flows. This slows the capital stock growth and eventually reduces real wage growth, which negatively impacts the growth of employment and real GDP. So, very few people are willing to live and work in Illinois. Because of this, Illinois is facing a part of the U.S. economic crisis.

Some reports suggest the lack of entry-level jobs and a decline in the birth rate as the major factors in Illinois’ population decline.

Many factors are responsible for the U.S. economic crisis. The population of the U.S. grew by 2.3 million to 325.7 million in 2017; that’s a less than one-percent increase. Still, residents migrating to the U.S from other countries prove to be the significant factor in U.S. population growth. According to the census bureau, about 1.1 million people moved to the U.S. over the last year.

 

Sources

What’s Driving Population Declines in More States?,” The Pew Charitable Trusts, February 3, 2017.

U.S. Census Bureau: Idaho population booms; Illinois drops to sixth-biggest state,” USA Today, December 20, 2017.

Shrinking, shrinking, shrinking’: Puerto Rico faces a demographic disaster,” The Washington Post, October 18, 2017.

How Low Will Puerto Rico’s Population Go?,” Medium, November 17, 2017.

Wyoming population declines again, for 2017,” Oil City News, December 20, 2017.

Wyoming population drops, economy flat after energy, mining slump,” The Denver Post, December 22, 2016.

Report reveals deepening poverty in West Virginia,” World Socialist Web Site, 25 January 2017.

West Virginia Is Dying and Trump Can’t Save It,” U.S. News, May 25, 2017,

Alaska’s recession will last through 2019, economists tell Legislature,” JuneauEmpire.com, January 20,
2017.

Why is Illinois Shrinking?,” Chicago Tonight, December 27, 2016.

What’s dragging down illinois’ economy?,” Illinois Policy, December 20, 2017.

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Categories: Economic Decline, News

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