According to a Labor Department report released Wednesday, the jobless rate topped 15 percent in fourteen U.S. metropolitan areas. Eleven of those were in California, which only highlighted the economic troubles leading to insolvency for many Californians.

The city with the highest rate of unemployment of all metropolitan areas was El Centro, which had a jobless rate of 27.9 percent, not taking into account seasonal adjustments.

Partly because California was such a large beneficiary of the housing boom, the resulting foreclosure crisis has cost the state dearly in job losses and insolvency. The financial crisis has resulted in the deepest recession since the end of World War Two for cities nationwide, and municipal bankruptcy is becoming an increasingly likely option for many California cities. Vallejo has already filed and Antioch is considering the move.

Unemployment can hit cities especially hard by driving up demand for basic and relief services while driving down tax revenue at the same time. As a result, municipalities and states tend to gauge economic progress by unemployment rates, rather than growth in gross domestic product, the measure the federal government uses.

Nationwide, 128 cities reported unemployment rates of at least 10 percent, up from only 91 a year ago. The Labor Department report measures nearly 400 metropolitan areas. Seasonally adjusted, the national jobless rate was approximately 9.8 percent in May.

According to a survey of city officials by the National League of Cities, unemployment rates have risen in virtually all U.S. cities over the past year, and poverty has grown worse.

Among the 49 metropolitan areas with populations of a million or more, the Detroit region had the highest unemployment rate, at 14.8 percent. The San Bernardino/Riverside area or "Inland Empire" had the third highest rate among large metro areas. Overall, Nevada and California unemployment rates are at an all-time high.

Related Resource

"California cities have highest jobless rates in April" (Reuters, June 2, 2010)