Extra 36 Minutes Brings in $35 million

By Alex Christensen, Policy Associate, October 22, 2012 at 7:30 am

At 5.8% unemployment and an additional 5,900 seasonally-adjusted jobs, September was a good month. However, with 2012's employment ups and downs, we have no idea if Minnesota is on the road to full recovery. 

Here's where we are: The unemployment rate still stands higher than at the beginning of 2012, although the labor force appears to be stabilizing – which is good. Just below the headlines, however, there are more interesting dynamics lurking.

The Duluth area, which has been ravaged by floods and poor recreation weather, experienced almost half of the state’s growth, with 2,250 new  September jobs. Most of that growth came through education, which skews the overall picture because those numbers aren't seasonally adjusted—meaning that they do not take into account natural employment swings throughout the year. In the absence of seasonally adjusted numbers, a better comparison is year-over-year change in employment.

From September 2011 to September 2012, Duluth's job growth was only 0.3%, or 400 jobs. No doubt those 400 jobs are important to 400 families.

There are signs that Minnesota is beginning to experience a real recovery. Steve Hine of the Department of Employment and Economic Development (DEED) notes that the average work week rose by 36 minutes in September, which is the equivalent of 40,000 additional jobs. Based on the average wage in Minnesota, that equals $35 million more income earned each week. An increase in hours worked each week can also be a precursor to increased hiring. After giving existing employees more work, employers will need more employees and hire anew.

Another bright spot comes from Administrative and Support and Waste Management and Remediation Services, which added 2,700 jobs in September and nearly 12,000 in the last twelve months. The majority of growth in this category is in employment and personnel services, meaning temporary hiring and staffing companies.

After a recession, many employers hire temporary workers until assured that the economy is stable and robust, according to DEED Spokesman Monte Hanson. These workers may soon be converted to permanent employees—but that will depend on macroeconomic conditions over the next six months.

Manufacturing employment in Minnesota, which has added 15,000 jobs since the worst of the recession, is experiencing minor setbacks. After steady gains through 2011, Minnesota had 1,600 fewer seasonally-adjusted manufacturing jobs than at the beginning of 2012.

Unfortunately, some of the job market may be out of the control of Minnesota employers. The economic troubles in the European Union appear to be affecting manufacturing exports to that area of the world, according to Monte Hanson. A sharp increase in manufacturing unemployment claims in Southwest Minnesota also indicates that food processing and manufacturing may be slowing down, at least temporarily. In fact, since July's 2012 high, Minnesota has lost 5,600 seasonally-adjusted manufacturing jobs.  

Overall, the employment picture in Minnesota has not changed significantly. There are some signs of a robust recovery on the horizon, but the job market is still experiencing the effects of the Great Recession. With a continuation of the positive signs into the October numbers, and potentially an upward revision in the September numbers, the employment picture in Minnesota could be positive going into the holiday season. But, Minnesotans will probably have to continue playing the waiting game for the months to come, especially if Minnesota's Legislature is slow to enact any job growth programs when the session starts in January.

Posted in Economic Development | Related Topics: Job Growth  Unemployment  Working / Middle Class Issues