Propelled by a burst of hiring in August, Minnesota has finally recaptured all the jobs it lost during the Great Recession.
Employers added 12,200 positions last month, the state reported Thursday, with significant gains in education and retail. Only January saw bigger job increases over the past year.
“We have certainly passed a milestone that’s a significant one,” said Steve Hine, a state labor market economist. “We’re now 5,100 jobs above our previous peak.”
The state Department of Employment and Economic Development reported that the state economy now supports 2.79 million jobs, surpassing the pre-crisis high set in February 2008. Unemployment ticked down to 5.1 percent, well below the national average of 7.3 percent.
The recession and recovery have shifted the mix. Health care, private education and back-end office jobs have proliferated. Health care employs 44,000 more people than it did before the job market crashed.
But gains in many other fields have been tepid, and key middle-class jobs in construction and manufacturing are still missing. Minnesota factories employ 40,000 fewer people than they did in February 2008, and construction employs 18,000 fewer people.
“A lot of the job mix that we see now compared to 2008 would be shifted towards generally lesser-paying occupations,” Hine said.
Minnesota had a near-record number of job openings this summer, and good jobs are available, but the median wage offer fell to $12.50 an hour in July, more of the openings were part time and the number of temporary jobs has surged in recent months.
About 152,000 people remain unemployed in Minnesota. And while the state now has as many jobs as it did in 2008, the population rose by an estimated 130,000 in that time.
The recovery has been slower for Minnesota’s black population. July numbers from the government’s Current Population Survey show that blacks account for a growing share of the unemployed — 14 percent — but only 5.5 percent of the state’s total population.
The Latino population has fared better, accounting for 4.7 percent of the unemployed and 4.9 percent of the total population.
As of July, 16 states had surpassed their pre-recession employment levels, but some have fallen back, Hine said.
The 16 included Iowa, Nebraska and the Dakotas, but not Wisconsin.
Reaching that benchmark is a “nice achievement” for Minnesota, but “one shouldn’t get too euphoric,” said Tom Stinson, an economist at the University of Minnesota.
“We would have liked to reach it sooner, and it’s not going to cause people to suddenly rush out and start buying things and hiring people,” he said.
Stinson said he is more impressed with how Minnesota compares with the nation by several measures.
The state has added 63,100 jobs in the past year, a 2.3 percent growth rate that exceeds the national rate of 1.7 percent. The country as a whole is still 1.8 million jobs from recovering all the positions lost in the downturn.
“The bottom line is we’ve been growing faster than the U.S. no matter what comparison you make,” Stinson said.
But labor force participation — the percentage of working-age people who are either working or looking for a job — fell in August to 70.3 percent, its lowest rate since January 1982.
While this has been offered as evidence that the unemployment rate does not capture the full extent of the problems in the labor market, Hine and Stinson said it is more the result of baby boomers retiring than a sign that more Minnesotans are giving up the job search.
The number of discouraged workers in Minnesota has fallen from 10,900 in August 2012 to 6,900 this past August, according to unofficial monthly survey data. But with more than 50,000 Minnesotans turning 65 each year and that number growing, the labor force participation rate will likely continue to drop.
“You have this big gob of people born after World War II, and now they’re turning 65, 66, 67,” Stinson said.
The weakness of manufacturing hiring is a lingering concern. The state’s manufacturing output has risen at an average rate of 7.4 percent over the past three years, but hiring has stalled in 2013.
Including the August decline of 3,400 jobs, Minnesota has lost 8,500 factory jobs this year. “What I would like to see,” Stinson said, “is some growth in manufacturing.”