More of the same: “Nothing spectacular” in state jobs report

The new state jobs report is out and not surprisingly, it’s more of the same that Minnesotans have come to expect and accept. Last month Minnesota plodded along with an increase of some 1,900 jobs statewide.

Yet even the status quo’s biggest apologist–the Star Tribune–characterized the numbers as “a slight overall gain” that continues “slow, steady growth in the state job market.”below-av

“Although it’s been nothing spectacular, I think it’s been notable that as long as it’s been going on, our growth rate has been very persistently solid, if not remarkable,” said Steve Hine, a labor market analyst for the state.

“Nothing spectacular.” “Not remarkable.” Is that really the standard most Minnesotans set for themselves and the state? The fact is Minnesota’s economy has not kept up with even the sluggish 1.7 percent overall U.S. job growth rate, lagging behind at 1.4 percent increase in jobs in the last year. That’s not just unspectacular, it’s below average.

It also tells us nothing about the quality of the jobs being created. American Experiment’s recent report, Minnesota’s Economy: Mediocre Performance Threatens State’s Future, points out that the quality of jobs in Minnesota has been declining. There are fewer Minnesotans employed in high-tech jobs today than there were in 2000. And Minnesota’s job growth is centered almost exclusively in the relatively low-productivity education and health care sectors, while sectors that produce up to six times as much GDP per average job, like mining, languish.

One bright spot is that wages in the private sector rose at an average hourly rate of about 50 cents, up five percent over last September. Unemployment among black and Hispanics has also fallen. Yet at the same time, one of Minnesota’s strongest advantages over the competition–labor force participation–continues to decline.

The state’s labor force participation rate has fallen more than a percentage point in the past four months, to 69.2 percent, its lowest level since June 1979. That shows an increasing shortage of workers in Minnesota and rising numbers of retirements.

The reality is that Minnesota’s economy is not as strong as many think, and is no model for other states to emulate. In fact, American Experiment’s report found that Minnesota ranks 30th among the states in income growth and 28th in job growth over the past 15 years.

Get used to such meagre performance–unless and until Minnesota adopts more competitive regulatory and tax policies.