Editorial: Hold the celebration on jobs numbers

06/15/2006

Minnesota’s job market is still catching up.

Star Tribune
June 14, 2006

Gov. Tim Pawlenty called a special news conference Tuesday to release the state’s May jobs report and announce that Minnesota’s unemployment rate fell to 3.7 percent, the lowest in five years. No surprise there—this is pretty good news, and a governor who is campaigning for reelection can be expected to broadcast it.

But the May employment numbers are not quite as good as they appear, and voters should read them carefully. As the Department of Employment and Economic Development pointed out, actual job creation in May was modest. The unemployment rate went down chiefly because some 9,000 Minnesotans simply stopped looking for work and weren’t counted as jobless. Consider the bigger picture: The share of working-age Minnesotans with jobs is still lower than it was five years ago, when the last recession began, 70.4 percent vs. 73 percent.

To get a clearer view of the state economy, it’s important to put the monthly numbers in historical and national context, and here Minnesota’s performance has been unimpressive. The state has created 47,000 jobs in the last 12 months. That’s a big improvement over 2003 and 2004, but it’s well below the comparable period of the 1990s, when the state economy routinely created 60,000 to 70,000 jobs per year.

While it’s true that Minnesota has surpassed the nation in the pace of job creation during the last 12 months, it has underperformed the nation in job creation over the full period since the 2001 recession ended. That’s a sharp departure from the 1990s. Similarly, while Minnesota climbed up the state-by-state income rankings steadily during the 1990s, it has been stuck or falling in the income ranks since about 1999.

No one should give a governor too much blame or credit for these broad trends. The Minnesota economy is dynamic, complicated and mostly beyond the control of any one politician. But Pawlenty came to office promising that he would improve Minnesota’s economic performance, and he has held the state to an austere budget regimen to achieve that goal.

The new Minnesota—with a lower tax ranking and a leaner government—may yet surpass the Minnesota of the 1990s, but so far its performance is nothing to boast about.