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Layoff pace increases in Minnesota

St. Paul, Minn. — Minnesotans filed nearly 48,000 initial claims for unemployment benefits last month. Minnesota Department of Economic Security research director Jay Mousa says about a third were laid off construction workers. A fourth, Mousa says, were retail workers.

"We had a weak holiday shopping season this year and this was reflected in the numbers. We have almost a 26-percent increase in layoffs in retail trade this December than we did in December of 2001," said Mousa.

The raw lay off numbers don't convey the impact of the job loss. Construction jobs, for example, pay as much as $23 an hour, half again as much as manufacturing jobs. So, construction job loss has a bigger effect than layoffs in some other sectors.

The December numbers close the books on a dark year for Minnesota's economy. It's true that layoffs for all of last year rose at a slower rate than 2001. Beyond that, Jay Mousa says, it's difficult to find any good news.

"For all of 2002 the rate of layoffs increased by 4.6 percent over 2001. Now that's slower than the annual increase of 50 percent from 2000 to 2001, but it remains very high. The layoffs were across the board with very few industries being spared from job cuts," he said.

The Minnesota initial claims for unemployment report from December shows the state economy is not improving as fast as hoped.

State economist Tom Stinson says, taken with national numbers, the overall economy is stagnant.

"One week the initial claims numbers are improving; the next week they're not improving. If you take the average over the last few months there really hasn't been much improvement in the continuing claims numbers nationally," he said.

Jay Mousa says Minnesota's December layoff numbers show having more education did not guarantee being able to hold onto a job.

"For the second year in a row, workers with more than twelve years of education experienced layoffs at a faster pace than those with 12 years or less," according to Mousa.

Mousa says layoffs in the hard hit dot com and technology businesses may explain the phenomenon.

Tom Stinson says the discouraging job loss numbers need to be viewed in context. Minnesota's 3.9 percent unemployment rate, he says, is still lower than the national average.

Stinson says Minnesota's economy will recover if the state continues to create well educated, efficient workers.

University of St. Thomas business professor Fred Zimmerman says the state is competing for jobs against increasing numbers of well-educated, efficient workers everywhere. He says Minnesota's economy will grow if the state encourages business development in emerging areas.

"Minnesota ought to focus on some things that are emerging problems, things like energy conservation, water purification, materials substitution. We're going to have to deal with these problems scientifically and I think there's a great opportunity in Minnesota for that kind of development," Zimmerman said.

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