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Met Council assesses Twin Cities employment trends

Libby StarlingLibby Starling

The latest employment trends in the Twin Cities metro area are a classic “good news, bad news” story.

The good news, says the Metropolitan Council’s Libby Staring, is that “the economic recovery has begun.” The job supply in the region is growing and the unemployment rate is falling.

The bad news is that employment in the metro area still hasn’t returned to its peak level in 2007 or even to the level at the start of the last decade, and that the Twin Cities is lagging behind many of its regional peers in job growth.

Starling, the council’s research manager, reported on Twin Cities employment trends in a presentation last week to the council’s Community Development Committee.  She noted that employment is a key factor not only in the region’s economic well-being, but also in its development and land-use patterns.

graph of Twin Cities employment 2000-2011Employment is rising again in the Twin Cities, after dropping off severely in 2008.

Starling said the unemployment rate in the seven-county metro area was 5.3 percent at the end of 2011, compared with 8.3 percent nationally, and that it has trended 2-3 percentage points below the national rate for the last several years.

“The unemployment picture is better in the seven-county area than it is nationally, and in both cases the rate is falling,” she said.

Starling said total employment the seven-county area has begun climbing since reaching its low point in 2010. However, she said, the latest figure of 1.56 million jobs for 2011is still 70,000 below the peak year of 2007 and 64,000 below the number of jobs the region had at the start of the last decade in 2000.

The Twin Cities metro area historically has compared favorably with its peers in many areas, including educational attainment, labor force participation and home ownership. But job growth over the last 12 years is not one of them.

During the years 2000 to 2011, Starling said the number of jobs in the region declined by 1.4 percent, eighth worst among the nation’s 25 largest metro areas.

“Certainly, our job loss pales in comparison to Detroit or even San Francisco, which saw the dot-com bust,” Starling said. “But there are a number of regions we think of as our peers that have seen job growth over the 2000-2011 period.”

Among the 25 largest metro areas, the leaders in job growth during the period were Houston, 14.4 percent; San Antonio, 13.5 percent; Washington, D.C., 10 percent; Phoenix, 8.3 percent, and Riverside, Calif., 8.2 percent.

Gains and losses

In the Twin Cities metro area, Starling said the segments of industry with the largest employment gains over the last 12 years were education and health services, leisure and hospitality, and financial activities.

The segments with the biggest losses were those that historically have included well-paying blue collar jobs: manufacturing; trade, transportation and utilities; and construction.

Last fall, Twin Cities business leaders announced the formation of a new group – Greater MSP –  to market the region more aggressively and “with one voice.”  Its goal: to once again grow jobs at a faster rate than the national average and add 100,000 jobs over the next five years.

Starling indicated that the largest increases in employment over the last 12 years have taken place mostly in the outer-ring suburbs, while the developed core of the region has lost jobs.

She said the bigger gainers include Maple Grove, 13,000 jobs; Eagan, 6,300; Richfield, 5,800; Shakopee, 5,200; Woodbury, 4,400; Golden Valley, 3,600; Lakeville, 3,500; and Blaine, 3,000.

The biggest losers over the last 12 years:  Minneapolis, 21,000 jobs; Bloomington, 17,000, and St. Paul, 13,000.

Changing employment patterns, as well as a slow-down in population growth, are among the factors that the Met Council will likely consider as it prepares its next Regional Development Framework to guide future growth. The council already has begun work on the 2040 framework, which it plans to complete by 2014.

The framework, along with new population and job forecasts, will be provided to every community to help them update their local comprehensive plans. It’s all part of a once-a-decade planning process required by state law.

Comments (1)

  1. Submitted by Ray Schoch on 02/27/2012 - 07:00 pm.

    More bad news than good

    It’s an interesting comparison, reading this piece and then going back to read Louis Johnston’s related piece, noted at the bottom of Steve’s article. Never having gotten my Ph.D. in economics, I won’t try to parse the potential subtleties, but it does seem that quite a few of the “new” jobs aren’t going to be in the same league as the jobs that have departed when it comes to standard of living.

    I can’t speak for the other areas, but most of the job growth in Maple Grove is probably in the pay-and-benefits-poor retail segment. We ought to be wary, as well, of job growth in “health services.” Health care has the potential to bankrupt the state and the country, especially as boomers begin to reach age cohorts where health care requirements usually increase exponentially. At the same time, being a “medical assistant” at a clinic is as close to a dead-end job as the stereotypical burger-flipper at the local fast-food emporium. The workplace may be more pleasant, but the paycheck is not one that will support a middle-class standard of living. Leisure and hospitality fields are similarly low-paying. The crew on a cruise ship, the line cook at the hotel restaurant, the maid who changes the linens in both places – none of them are going to be buying upscale condos or 2,500-square-foot suburban housing.

    Financial activities are largely relevant only for the one percent. More importantly, the financial sector, while increasing dramatically as a share of the economy, is basically about shuttling money from one corner of the economy to another. It adds nothing – zero – to the GDP of either the state or the nation, and essentially becomes a poison pill, as we’ve seen over the past few years.

    So, yes, the job supply appears to be growing, but many of those jobs pay far less than the jobs that have disappeared or departed, and quite a few of those jobs are in health care, which is likely going to see an upheaval of some sort in the next decade or so. It’s not a field I’d want to try to build a career in, unless I already had my M.D. and someone else was picking up the tab for my medical school bills.

    Education pays poorly, for the most part. I spent 30 years in it and never reached the median income for the metro area where I lived during my classroom career. I’ve not seen any evidence that that situation has significantly changed. The raw numbers are higher, but so is the cost of living, and so is the median income for the areas where I’ve lived. Mostly, teacher salaries appear to be running in place.

    Overall, the job growth is at the bottom end, not the middle. We can’t build or sustain the current standard of living when the bulk of the population is working for low-end wages, with no benefits, in a state that permits “at-will” employment, and with a health care system that may well bankrupt us individually and collectively. I’d say the gains are illusory, and the losses genuine. That’s not a good prescription for what ails us economically.

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