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No, Minnesota is not ‘dead last’ in the Midwest in job growth

REUTERS/Jonathan Ernst
Given Johnson's promise to “go all Scott Walker on Minnesota,” it's worth noting that Gov. Walker’s economic policies haven’t helped Wisconsin catch up to Minnesota in per capita income, unemployment rates, or other indicators of economic health.

Quick quiz for those who've been paying attention: Was Minnesota’s private sector job growth slower or faster than Wisconsin’s from March 2013 to March 2014?  

The correct answer is, of course: yes.

If you read the news, or listened to Jeff Johson in the first gubernatorial debate, you know that Minnesota’s private sector job growth was — at 0.8 percent — not only slower than Wisconsin’s from March 2013 to March 2014 but was also "dead last" in the Midwest and 41st in the nation.

But those numbers were drawn the from the Quarterly Census of Employment and Wages, which is only one of three sources from which to draw job growth data. For example, a different metric — the Current Employment Survey — shows Minnesota’s private sector jobs growing by 1.7 percent and Wisconsin’s growing 1.3 percent. Now it’s Wisconsin that is near the bottom in job growth, not Minnesota.

Like so many things having to do with the economy, the picture looks different depending on the data you consult. So let’s take a look at what’s available on state job growth and then dig into the numbers. 

State and federal government statisticians compile a variety of databases on state-level job growth. The three most commonly cited are Local Area Unemployment Statistics (LAUS)State and Metro Area Employment, Hours, & Earnings; and the Quarterly Census of Employment and Wages (QCEW).

To compile the numbers, the Bureau of Labor Statistics conducts two surveys each month, one of households and one of business establishments. The household survey, formally known as the Current Population Survey (CPS), is the source for the LAUS data. The business establishment survey — the Current Employment Statistics (CES) survey — provides data for the State and Metro Area Employment, Hours, and Earnings reports.

But the QCEW is different: Rather than taking a sample from either households or businesses, the data are drawn from “a comprehensive tabulation of employment and wage information for workers covered by State unemployment insurance (UI) laws.”  In other words, the QCEW attempts to actually count all employees in establishments covered by state unemployment insurance law rather than make an estimate based on a sample of these establishments. The Bureau of Labor Statistics refers to this as a “near census” because they aren’t able to count every single worker in the United States.

Theoretically, figures from a census should be better than estimates computed from samples because the former is a true count of employment while the other is a statistical inference that carries all of the statistical baggage carried by estimates. Further, the QCEW forms the benchmarks for the two surveys; that is, the survey data are measured against the QCEW and adjusted over time so that they better match the census data.

So, what do we see when we look at these data?

Here are the QCEW data for March 2004 to March 2014:

Private job growth, QCEW: March 2004–March 2014

Now, take a look at the CES data for the same period:

Private job growth, CES: March 2004–March 2014

Both pictures are drawn on ratio scales so that the slope of the lines indicate the growth rate of employment — the steeper the line, the faster the growth rate.

The QCEW data show Minnesota slowing down from March 2013 to March 2014. But the CES data do not. The truth is probably somewhere in the middle — and that’s why we collect data on employment from multiple perspectives.

The long term trends, however, are quite clear. First, private sector job growth in Minnesota was faster after the Great Recession than Wisconsin’s. Second, Wisconsin is falling far short of the 250,000 net new private sector jobs that Gov. Scott Walker promised would be created in his first term.

The latter point is relevant given Johnson's promise to “go all Scott Walker on Minnesota.” Gov. Walker’s economic policies, as I’ve talked about before, haven’t helped Wisconsin catch up to Minnesota in per capita income, unemployment rates, or other indicators of economic health.

Of course, candidates often cherry-pick statistics that fit their particular policy positions (or that make their opponents look bad), but this episode also brings up an important point. Whomever wins the governor’s race, let's hope they take a more careful look at all the available data when it comes to making decisions — not just latch on to the set of numbers that favor their political point of view.

Comments (5)

  1. Submitted by Tom Christensen on 10/03/2014 - 11:55 am.

    Cherry picking numbers, for political reasons, can make anything look good or bad when compared to something else. When you look at the entire Minnesota vs Wisconsin picture one state has a burning desire to become the Mississippi of the north and the other is working to make the state better for everyone. Wisconsin is taking the extremist approach so Walker can look presidential ala Tim Pawlenty. We all know how that worked out for Pawlenty. Pawlenty doesn’t want to live in the mess he created so he moved out of state. Governor Dayton has brought us back to balanced fiscal sanity. The balanced approach wins out every time.

  2. Submitted by Constance Sullivan on 10/03/2014 - 12:21 pm.

    I really love taking this mini-classes on economics from Louis Johnston! Excellent presentation of what some would call the fine print.

    Let’s hope that the GOP candidate for MN governor doesn’t get the chance to “go all Scott Walker” on us. OMG. (I hadn’t read or heard that quotation before this.)

  3. Submitted by Greg Kapphahn on 10/03/2014 - 07:18 pm.

    “Go All Scott Walker”

    Here’s what that statement by Mr. Johnson reveals about him.

    The things in which he “truly believes” tell him that under Scott Walker, Wisconsin is better off and Wisconsin’s average citizens are better off because of the things Scott Walker has done.

    In other words, Mr. Johnson reveals himself to be so locked into what he “truly believes” as to be unable to allow the mountains of evidence which show how terribly much WORSE off Wisconsin and it’s citizens are under Scott Walker,…

    to even enter his awareness.

    Why and how we would elect a man so far out of touch with measurable, factual, reality to be our Governor,…

    and how anyone could believe that someone who is incapable of even identifying what the problems that linger in Minnesota are,…

    and also incapable of using facts and evidence to design solutions to those problems because those facts and that evidence would likely disagree with what he “truly believes,”…

    (which means those trying to suggest solutions would find that he is incapable of even allowing what they’re saying to enter his awareness)…

    is beyond my comprehension.

    Men such as Walker and Johnson can do NOTHING but continuously create more and more victims,…

    while blaming those victims for the effects of what their own cold-hearted, wrong-headed, backward-looking policies have done to them to destroy their lives in the first place.

    NO. THANK. YOU. to more of Scott Walker in Wisconsin, and to the travesty of justice and everything else that a Gov. Johnson would be in Minnesota.

  4. Submitted by Brad Hokanson on 10/03/2014 - 10:22 pm.

    Reports from other Great Lakes states

    One outside view is from Michigan Public Radio:

  5. Submitted by Eric Ferguson on 10/04/2014 - 12:00 am.

    Let’s not forget the other sort of cherrypicking

    Besides picking the preferred report, it’s possible to pick a range that supports your point. What if the range is March 2013 to March 2014 because that’s the only range where it looks like Minnesota’s private sector growth was slow? Our unemployment rate has fallen considerably since then, making me suspect a wider range or more recent months would give a different result, and such result would be more favorable to Dayton.

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