Look at the details when evaluating job growth

Tom West, West Words
Tom West, West Words

Most Americans know that in the short term, the Federal Reserve Bank has the most effect on the U.S. economy. It isn’t all powerful, but at times it seems that way.

Longer term, of course, it still comes down to our industriousness as a people. If too many of us walk away from our debts, too many opt to be on the government hand-out list instead of engaging in productive industry, or too few are able to create successful new businesses, it won’t make any difference what the Fed does. We all will be in a world of hurt.

Naturally, politicians often take credit for certain situations that they had nothing to do with. Lately, they have been telling us that the economy is really improving. They point to surging home sales and values, a stock market near all-time highs as well as a growth in jobs.

While one can still get quite an argument about whether the Fed has done too little or too much pump priming, it still looks from this vantage point that we are skating on perilously thin economic ice.

For the last few elections, politicians of all parties have said the most important issue is to create jobs. Their promise to focus on that issue, of course, is meaningless. The majority of the people we elect have never had to hire or fire someone, much less owned their own business. They have no idea how to create a job or understand how difficult it is to maintain one.

So it was that Thursday, the Minnesota Department of Employment and Economic Development (DEED) put out a press release celebrating the addition of 4,300 jobs in July. It claimed growth over the past year, totaling 71,500 new jobs in Minnesota, a 2.6 percent increase compared to the national average of 1.7 percent. Hurrah.

But if one keeps reading beyond the headline, it’s easy to see just how thin this thin ice is.

First, it notes that the state jobless rate remains unchanged at 5.2 percent.

Second, it noted that the figures for June have been adjusted. Just a month ago, DEED proclaimed that the state had added 400 jobs. Now it has revised that number, noting that the state actually lost 1,000 jobs.

Thus, before we celebrate 4,300 jobs too loudly, perhaps we ought to wait a month or two to see if they are still here.

Third, of the 4,300 jobs said to be created, 4,000 of them were created in government. Job categories that showed increases included financial, leisure and hospitality, other services, information and professional and business services.

Sectors experiencing job losses included education and health care, construction, manufacturing, trade, transportation and utilities. Logging and mining held steady.

In other words, most of the sectors where wealth is actually created lost jobs or held steady, while most of those that offer support services to those industries gained jobs. That does not bode well for long-term growth.

Then the question becomes, who gets credit or blame? Well, Minnesota is doing better than the nation. Could that be because we operated with a split government since 1990? Mark Dayton is the first DFL governor since Rudy Perpich, who lost the 1990 election. Meanwhile, in electing Dayton, Minnesota voters revealed their desire for power-sharing by turning the Legislature over to the Republicans for the first time since 1972, when legislators were first elected under party labels.

Other states have weathered the Great Recession better than Minnesota — think Texas — while many more have fared worse — think Illinois and California.

If Minnesota is doing better than most, then the credit needs to be shared, even though it took two government shutdowns for Dayton and the Republicans to reach agreements on budgets that raised some fees, but not income or sales taxes.

That changed this year under one-party DFL control, when state taxes went up a projected $2.1 billion. Since most of the changes implemented by the DFL took effect only a few weeks ago, it can’t take sole credit for Minnesota’s relatively lofty position.

What readers can do, however, is note where we are today, both as a state and a nation, and see how we are trending a year from now when they begin thinking about the 2014 election.

They also should think about how Central Minnesota is doing as a region. The most recent county-by-county employment totals released by the state are for June.

The facts are these: Compared to June of a year ago, only Benton and Stearns counties of the area including Morrison County and the neighboring six counties, have added jobs in the past year. Morrison County lost 164 jobs, while Benton added 211 and Stearns added 816.

This is an ongoing trend of regionalization, in which a few regional centers around the state are growing, but the remainder of the state is struggling.

As the table indicates, in the seven counties including and surrounding Morrison County, job growth has been sporadic, adding only slightly more than 5,000 jobs in the past 13 years, of which 4,484 were added in Stearns.

Morrison County employs 16,461 people today. The last time June employment was that low was 2000.

Make a note and check back next year to see if the ice is any thicker.

Tom West is the editor and general manager of the Record. Reach him at (320) 632-2345 or by email at [email protected].