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Number of Minnesota jobless highest since 1985
by Jeff Horwich, Minnesota Public Radio
August 12, 2003

Chris Stoehr, a manager at the Midway Workforce Center in St. Paul, assists with a computer job search. Stoehr says there are still lines to use the computers, but officials and some clients say they've noticed some people are giving up the job-hunt. (MPR Photo/Jeff Horwich)

New economic numbers show Minnesota reached a number of important benchmarks in July. Unfortunately none of them are good news for the state's unemployed. The latest unemployment statistics show more Minnesotans out of work than at any time in 18 years, and the unemployment rate reached a level only seen once in the past decade. Officials say in the midst of an economic recovery, Minnesotans are still waiting for the layoffs to stop.

St. Paul, Minn. — As far as jobs are concerned, July brought more of the same for the Minnesota economy. Minnesota companies eliminated more positions than they created; after adjusting for seasonal factors, the state lost 3,600 jobs.

Government employees suffered big losses, and construction work also fell off after a few strong months. Manufacturing showed some growth in July, but nothing to make up for the 54,000 layoffs that sector has suffered over the past three years.

The acting research director at Minnesota's Department of Employment and Economic Development, Steve Hine, describes it this way:

"The economy's not plummeting, but it's continuing to slide downhill pretty persistently," Hines said.

On a seasonally adjusted basis, more than 135,000 Minnesotans were out of work in July. The state hasn't seen a number that high since July of 1985, at the tail end of that decade's major recession.

The more recent recession began in March of 2001. Since that time, the state has lost 68,000 jobs. That's one out of every 40 jobs the state had when the recession started. The recession technically ended a year and half ago, because the output of the economy started growing again. But Hine says the layoffs continue.

"The stage should to be set for an economic recovery that is strong enough to pull some job growth along with it," Hine says. "(But) we've been saying that for a year. It's been a long time we've been anticipating job growth would start to follow the economic recovery."

No one is anticipating that turnaround more than the people job-hunting at a St. Paul Workforce Center. A former loan assistant at Wells Fargo says she's willing to take "anything and everything" after getting laid off almost a year ago. An electric technician says companies are posting jobs, but not actually hiring anyone.

James was a company shipping director before getting laid off, hired by another company, and then laid off again this spring.

"They laid off about eight of us, and they called us on a Sunday of all days," he says. "We're getting ready for the week, the work week, and they knew it on a Friday. But they called us on a Sunday. But that's just the nature of the business, they way things are going. With employers, nothing's steady."

James found some work to help pay the bills, and he doesn't want to use his last name in case his current boss hears he's shopping around again for a better job. He's noticed the Work Force center is getting less crowded.

"I'm seeing less people here at the job service than I was a couple months ago," James says. "But what I'm also finding is that people are giving up."

Officials also see signs more people are giving up the search for work. Minnesota's unemployment rate of 4.6 percent is historically high, but it would be even higher if it counted those who had stopped looking for jobs.

Not every corner of the economy is emitting bad news. Medical device maker Boston Scientific has 2,500 employees in Plymouth and Maple Grove. Spokesman Paul Donovan says the Massachusetts-based company is "extremely bullish on Minnesota."

"We are going to be hiring several hundred people this year," Donovan says. "We've already hired several hundred in Minnesota, we expect to hire several hundred more. This is part of a 1,400 person hiring push that we're putting on this year, and a great deal of those jobs will be in Minnesota."

An official with the Minneapolis Federal Reserve says all the fundamentals are in place for an economic recovery. But he expects it may be the end of the year before businesses will have the confidence to start hiring once again.

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