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Jobs recovery hit by public-sector losses | Duluth News Tribune | Duluth, Minnesota

Published July 19, 2013, 12:00 AM

Jobs recovery hit by public-sector losses

Minnesota’s unemployment rate inched downward in June, pushed along by strong private-sector growth but held back somewhat by a loss of government jobs.

By: News Tribune staff, Duluth News Tribune

 

Minnesota’s unemployment rate inched downward in June, pushed along by strong private-sector growth but held back somewhat by a loss of government jobs.

The Department of Employment and Economic Development announced Thursday that Minnesota employers added just 400 non-farm jobs in June. That was because a 2,500-job increase in the private sector was offset by a 2,100-job loss in government employment.

In the Duluth-Superior Metropolitan Statistical Area the result was negative: Private employers added 882 jobs while government cut 1,081 compared to May, ending the month of June with 25,942 employees. This was the first June since 1992 where federal, state and local governments in the area employed fewer than 26,000 workers.

The Duluth-Superior MSA includes all of St. Louis and Carlton counties in Minnesota and Douglas County in Wisconsin.

AFSCME Council 5 Chief of Staff Eric Lehto said there are several reasons for the regional drop in government jobs, including demographics, changing ways of delivering public services — and political decisions.

“The massive and rather draconian cuts that (Gov.) Scott Walker made to the public sector in Wisconsin are coming home to Superior,” he said.

Decisions by the St. Louis County Board to close Nopeming Nursing Home and sell Chris Jensen Health and Rehabilitation Center also contributed to the longer trend of declining government jobs. Some of the jobs still exist, Lehto said, but now they’re in the private sector.

Another possible reason for the decline is the region’s declining school enrollment, DEED spokesman Steve Hine said.

The number of government jobs wasn’t what caught the eye of DEED regional labor market analyst Jan Saxhaug.

“The only number that jumped out at me was the mining, logging and construction, which went down 3.1 percent,” he said. “June is usually a pretty strong month for construction.”

“We saw some job gains in the private sector, which is a good thing,” he said. “A lot of those gains this time of year are seasonal. There was a 5 percent gain in leisure and hospitality, which is not at all surprising.”

Minnesota had a 5.2 percent jobless rate in June, a tenth of a percent lower than May and its lowest point since May 2008. Wisconsin’s unemployment rate was 6.8 percent in June, down from 7.0 percent in May. The U.S. unemployment rate in June was unchanged at 7.6 percent.

“The Minnesota economy continues to improve, with the unemployment rate reaching a post-recessionary low point and private sector employers adding 2,500 jobs in June,” DEED Commissioner Katie Clark Sieben said in a news release. “We have now recovered 95 percent of the jobs that were lost in the recession.”

Over the past year, Minnesota has added 54,100 jobs, a growth rate of 2 percent. The U.S. growth rate during that period was 1.7 percent.

Minnesota’s job growth has not been spread evenly. Year-over-year employment was up 2.9 percent in the Minneapolis-St. Paul MSA; 2.2 percent in the St. Cloud MSA; 0.8 percent in the Mankato MSA; 0.6 percent in the Rochester MSA; and 0.4 percent in the Duluth-Superior MSA.

Too many of the area’s new jobs don’t pay enough to support a family, Lehto said.

“This really illustrates a crisis in the Duluth-Superior area,” he said. “Even through unemployment is a concern in Duluth, far more the real problem is one of there being a wage crisis. The government jobs typically are higher paying good jobs that we are not attracting. That is a real problem.”

via Jobs recovery hit by public-sector losses | Duluth News Tribune | Duluth, Minnesota.

One comment on “Jobs recovery hit by public-sector losses | Duluth News Tribune | Duluth, Minnesota

  1. All of the decline in the unemployment rate since the end of the recession is explained by workers retiring and leaving the workforce. Welcome to the new abnormal.

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