What are the forces moving the Minnesota economy? Adam Belz tries to identify the trends and show the connections between Minnesota and the larger U.S. and global economies. You can connect with him on Twitter: @adambelz
A modest proposal: Let people have the rights of corporations – Washington Post
Mortenson builds tallest flagpole in U.S. in Sheboygan – StarTribune
Amazon posts $126m loss, deliberately, investors a little irked – Bloomberg
Conrad Hotel planned for downtown Minneapolis – StarTribune
Rick Nolan wants Enbridge pipeline route moved south – Bemidji Pioneer
New home slowdown puts pressure on U.S. economy – WSJ
Bremer Bank to acquire Eastwood Bank in Rochester – StarTribune
California sees surge in high-paid white collar jobs – LA Times
Developer mulls high-rise apartments on the lake in Milwaukee – Journal Sentinel
Big problems in the global steel market, China edition – Yahoo
Vikings won’t enhance stadium to make it safer for birds – StarTribune
Interesting, wide-ranging QA with Larry Summers – New Republic
Ethiopia becomes China’s China in search for cheap labor – Bloomberg
Southeast Wisconsin hospitals are starting to control costs – Journal Sentinel
Minnesota names marijuana program director (it’ll be a business, folks) – StarTribune
Upstart outboard engine maker ditches gasoline for propane – Journal Sentinel
U.S. to railroads: Remove or retrofit old oil tanker in 2 years – StarTribune
Winona chain-maker Peerless sold to Japanese firm for $80 million – Winona Daily News
Somali singer, politician who lived in St. Cloud murdered in Mogadishu – St. Cloud Times
A visit to Sana’a, the old, beautiful and strange capital of Yemen – Idle Words
Kansas City plans $75 million training facility for U.S. Soccer – KC Star
Le Sueuer-based cheese firm Davisco sold to Canadian co-op – StarTribune
Usually quiet investors asks 1,000 boards for better dialogue – NY Times
Koch brothers try to build network of libertarian hackers – Yahoo
Schafer: High rents reflect shift in living patterns – StarTribune
Crash on I-55 tied to falsified trucker logbook – Chicago Tribune
New flood maps require thousands more to pay for expensive insurance – Fargo Forum
St. Cloud’s job market stumbled a bit in June – St. Cloud Times
Vacation rentals near Brainerd irk homeowners – Brainerd Dispatch
Officials probe fire at oil supply company in Williston – Bismarck Tribune
“Hipsters Surrender” great front page from the NY Post – Newseum
The debate over immigration policy is fast taking on more economic significance as the aging Minnesota and Midwestern labor force is shrinking.
The Minneapolis-St. Paul metro area added 108,000 immigrants to its population in the first decade of the millennium, more than any metro area in the Midwest other than Chicago and at a far faster rate than Chicago. It appears immigration has allowed the Twin Cities labor force to keep growing even as the overall workforce in Minnesota has started to decline.
The immigrant population statistics are laid out in a report published a month ago by the Chicago Council on Global Affairs. Whatever your politics, the figures illustrate that job markets in the Midwest are quietly beckoning a lot of people from other countries, as more baby boomers retire, leaving companies to search for employees in a smaller pool of workers.
Mark Brunswick wrote about this report already for the Strib, but at a time when the state labor economist says the workforce is hitting a 15-year period of little or no growth, it’s worth looking at the data a little more, and discussing why businesses are pushing for immigration reform.
The Minnesota labor force has shrunk each of the past four months, after peaking just over 3 million strong in the spring.
As baby boomers retire, “businesses that are going to want to expand are going to have to compete hand over fist, and tooth and nail for qualified workers,” said Steve Hine, economist at the Minnesota Department of Employment and Economic Development, in June.
Enter immigration, and the rapid growth of it in the Midwest.
More than a third of the population gain between 2000 and 2010 in Minneapolis-St. Paul, Chicago, Milwaukee, Cincinnati, St. Louis, Ann Arbor and Topeka was immigrant population growth.
In Duluth, immigrants accounted for ALL of the population growth, and offset a decline in the native-born population. The same is true of the Quad Cities between Illinois and Iowa, and South Bend and Terre Haute, Ind.
In Chicago, Akron, Ohio, and Sheboygan, Wis., immigrants accounted for more than half of all population growth between 2000 and 2010.
The numbers include naturalized citizens, legal permanent residents, temporary visitors who are here to work or study, and undocumented immigrants.
The shrinking labor force is something businesses are watching closely. It’s a key reason that groups like the Minnesota Chamber of Commerce are touting the economic contributions of immigrants, and pushing for comprehensive immigration reform.
“Americans need to continue to act with economic and cultural self-confidence in the presence of globalization, and continue to welcome immigrants,” the chamber report said.
Here's a spreadsheet I created using the Chicago Council's data, which was compiled from U.S. Census reports. It's the top 40 Midwestern cities by immigrant population growth in absolute terms.
As you can see, some cities, like Detroit and Cleveland, had big growth in their foreign-born populations, but not enough to offset a dramatic decline in population overall.
All the big banks have been reporting their earnings, and they’re all reporting a rebound in commercial and industrial lending, including Minneapolis-based U.S. Bancorp and Wells Fargo, Citigroup, PNC Financial and others, which is leading to a rebound in lending overall.
It’s a good sign for the economy, because it shows that businesses, particularly the mid-sized ones that are job-creating engines, are getting more confident and borrowing money to do more of what they do, and presumably grow and hire more people.
Nationally, fewer commercial and industrial loans are delinquent, and lenders are easing their standards, said Toby Madden, an economist at the Federal Reserve Bank of Minneapolis. More lending to businesses not only is a sign of an improving economy, but an economic stimulus.
“That reinforces itself in new plants and buildings, that means more economic activity is happening, which means that might create more demand for loans,” Madden said. “The good economic activity spurs more economic activity.”
I took a look at the Minnesota data from the FDIC (which only runs through the first quarter of 2014) and it shows that while lending to businesses is on the upswing in Minnesota, there’s still a long way to go to get back to pre-recession levels.
The collective commercial and industrial loan portfolio (the amount of loaned money at any given time, including lines of credit that are being used) for Minnesota banks ticked upward to $7.3 billion in the first quarter of 2014. That was the highest level since the end of 2009, but still 24 percent below the level in March 2009.
This lending to businesses tracked every other economic indicator in the downturn, dropping from $9.5 billion to $7.4 billion in 2009, as growth halted and businesses dug in for the recession. Lending levels continued to fall. As you can see, it’s been a slow climb back from the trough in March 2012.
Here’s the national data showing not the total amounts, but the annualized percent change by quarter. It shows that growth has returned across the country, but not growth on par with the boom years of 2006 and 2007, which is probably just fine.