Minnesota governments are hiring again after a long drought

Cities, counties and schools are starting to hire again.

After a deep dive that started about a year after the drop in private sector employment, local government payrolls appear to have bottomed, a good sign for an economy that needs more people employed and spending money.

Local officials are feeling more comfortable adding people amid rising property values, stabilizing budgets and some restoration of confidence in the broader economy.

"It's a big sea change there and that's making overall job growth numbers better month to month," said Scott Anderson, chief economist for Bank of the West. "We've stopped the bloodletting."

Local governments in Minnesota have added an average of 1,100 jobs per month for the past year after shedding thousands during the economic downturn.

Oriane Casale, a labor market economist for the state of Minnesota, said the rebound started last summer. "July 2012 was the trough."

Monday afternoon, 12 cadets for the Minneapolis Fire Department practiced with ladders at a training tower on the north side.

"Getting this job is like winning the lottery; everyone here will tell you that," said Brad Lange, 34, a construction worker for the past 12 years whose wife cried when she opened the letter from the fire department. "I got lucky."

Much attention since the recession has focused on federal employees, whose numbers have shrunk nationally and in Minnesota since spiking in 2010 thanks to stimulus dollars.

But local governments employ a larger workforce by far, with a more profound economic impact than state and federal government combined. Cities, counties and school districts employ 14 million Americans and close to 300,000 Minnesotans — compared with 2.7 million federal employees nationwide and 30,400 in Minnesota.

Cities and school districts in Minnesota are quick to point out that they're not creating thousands of new positions, but they agree that the nose-dive of 2010 and 2011 — when local governments shed more than 5,000 jobs — has ended.

"We are not in a strong hiring mode yet," said Steve Gatlin, city manager of Coon Rapids, which is looking to hire a city engineer and hoping to add two new police officers.

"All of our increased hiring over the last four or five years has been around our enrollment growth," said Annie Doughty, executive director of human resources for the school district.

Statewide, employment at school districts was up 10 percent in Minnesota in July compared to a year earlier, an increase of about 10,000 jobs, according to unadjusted figures from the state's labor market information office.

Gary Amoroso, executive director of the Minnesota Association of School Administrators, said the increase is likely the result of the low numbers a year ago, when hiring hit bottom. School districts may be adding back jobs that had been eliminated, and a 1.5 percent increase in state funding probably freed money for hiring.

"I know most school districts are not increasing their staffing by 10 percent," Amoroso said. "That's absurd."

The city of Plymouth has 18 job openings posted on the League of Minnesota Cities website, but all but one of them is seasonal, part-time or temporary — positions like lifeguards, flag football officials and seasonal maintenance workers. The league's site has 144 openings posted, the majority of which are seasonal or part-time.

But it's clear that local government hiring is no longer contracting. Statewide, the number of jobs at cities, counties and school districts rose in 2012 for the first time since 2008. In the past six months, according to the state's monthly job surveys, the number has continued to rise. Local government added more jobs in July than any sector.

Laura Kushner, director of human resources at the League of Minnesota Cities, said she received lots of calls from cities about layoffs, downsizing and early retirement incentives in 2009, 2010 and 2011. But cities' topics of concern have shifted, she said. "The trend in our department is less about layoffs and downsizing and more about hiring," she said.

Nationally, local governments still employ 529,000 fewer people than they did in July 2008. But the return of modest hiring has helped offset cuts to the federal workforce and is contributing to stronger monthly employment numbers nationally, Anderson said.

"The state and local budgets are now balanced for the most part, and you're actually starting to see some hiring," he said. "A lot of theses jobs are teachers, and firefighters and police officers, people that are critical for local communities to function ."

Adam Belz • 612-673-4405 Twitter: @adambelz