It's no secret that Minnesota's economy underachieved through much of the last decade. Most worrisome, perhaps, was a slide in household income. Minnesota was the only state to post an actual decline in median household income between 2004 and 2009, while the nation made modest gains. The state fell from seventh to 12th nationally-- still a respectable ranking, but not a welcome trend.
Unemployment numbers were troubling, too, as the state's jobless rate briefly inched above the national average for the first time in more than three decades. Big job losses at Northwest Airlines and Ford, along with the subsequent fallout in retail activity, were significant factors. So were job losses in construction, lumber and timber as the housing market hit the skids in the Twin Cities earlier than most anywhere else. All of that was tough medicine for a state accustomed to scoring above average on almost every test.
Today, even though the state's unemployment rate ticked up in August, the larger trend is positive, and employment is returning to more familiar territory amid faint signs of economic recovery. According to the most recent report, Minnesota employers added 600 jobs in August, but the unemployment figure itself came in at 7 percent, up from 6.9 percent in July but well below the national average of 9.6 percent in August.
That's still unacceptably high, but there's some comfort in not being quite as miserable as most everyone else. The state's unemployment rate began to trend downward in summer 2009, partly because the airline and auto losses had been absorbed, partly because the health care and education sectors began hiring again, and partly because California's severe problems continued to have a disproportionate impact on the national numbers, making Minnesota look comparatively better.
In announcing the August numbers on Wednesday, state officials noted that Minnesota has added 32,500 jobs in the past year, a growth rate of 1.2 percent.
It's often said that balanced economies do better in bad times, and Minnesota's diversification again proves the point. The auto industry's hold on Michigan and the terrible overreliance on housing and tourism in Florida, Nevada, Arizona and California are now plain to see. Even in Silicon Valley, once considered America's ticket to the future, technology jobs are hard to come by.
Indeed, the unemployment problem has a distinct geography. Only eight states have jobless rates lower than Minnesota's. All of them are small and rural -- two in New England (Vermont and New Hampshire), and six in the heartland with economies centered on agriculture or energy (Kansas, Nebraska, Iowa, Wyoming, North Dakota and South Dakota). Among states dominated by metropolitan economies, Minnesota is doing the best. The Minneapolis-St. Paul jobless rate has mirrored the state's in recent months. Among major metro areas with populations over 2 million, only Washington, D.C., outperforms the Twin Cities on employment.
What the numbers don't say, of course, is how much a job is worth nowadays. In many industries, the pay trajectory is lower and lower. Still, it's encouraging to see jobs slowly returning to Minnesota. State economist Tom Stinson summarized the situation: "It's a recognition by the private sector that Minnesota's workforce is extremely productive and that if you're going to start investing again, this is a pretty good place to start."
