You have to look back more than 30 years — probably all of the way back to the Great Depression of the 1930s — to see jobs crawl back as slowly in the Twin Cities as they have since the latest recession hit in 2007.
At this point in the recovery from the deep recession of 1981, the Twin Cities actually had regained all of its lost jobs and even pulled ahead a bit.
Not so this time.
By the end of March, (the 9th quarter after the recession started) employment in Minnesota’s largest metro area stood at 93.4 percent of its 2007 level, according to the Brookings Institution’s MetroMonitor. [PDF]
To be sure, the Twin Cities is doing better by several measures than some other U.S. metro areas. Most other cities could envy the Twin Cities’ latest unemployment rate — 6.4 percent for May this year. (Note to watchful wonks: Metro area figures are not seasonally adjusted, so this rate isn’t comparable to the 7 percent statewide rate you’ve seen for May.)
The Twin Cities’ rate is roughly the same as that for Minnesota as a whole. By either measure, we are not even close to the nationwide jobless rate, which sticks stubbornly above 9 percent.
Running against your personal best time
Another way to view the problem, though, is to think like a jogger in a 10K race: Unless you are one of a few elite runners, you are watching your personal best times, not the entire field. In other words, you run to improve or at least meet your own top performance.
Seen that way, the Twin Cities’ goal should be to match or beat its unemployment rate in November 2007: 3.9 percent.
We’ll have to pick up the hiring pace to get there any time soon.
Unemployment recovery 9 quarters after recession started (percent of jobs)
The Brookings report provides some useful comparisons for “Twin Cities now” v. “Twin Cities past” in terms of recovery from hard times. It also shows how the Twin Cities is doing in the context of the nation’s 100 largest metro areas.
The metros are a big-deal barometer for the economy as a whole because the nation’s economic performance is driven largely by their economic engines.
National recovery largely jobless, increasingly fragile
Overall, the report portrays metro areas leading a nationwide recovery that is largely jobless and increasingly fragile.
“All of those economies saw some economic growth in the first quarter of 2010, and some returned to their pre-recession levels of output, but none recovered its pre-recession employment level,” the report says.
The Twin Cities was one of just a few metro areas where the unemployment rate dropped slightly during the 12-month period ending March 2010. Most metro areas continued to lose jobs, and several cities in California, Florida and Nevada saw their rates climb by about 3 percent early this year.
Look at the history of recent recessions, though, and you see a picture that is far more discouraging for the Twin Cities.
At this point in the 1981 recession, the metro area had recovered from its job losses and even added more openings. The same was true after the recession that started in 1990. Jobs came back more slowly after the 2001 recession, but the Twin Cities economy was close to being whole again by this point in the recovery.
This March, by contrast, the Twin Cities had recovered just 93.4 percent of the jobs its economy was generating as the recession was starting in 2007.
The same picture held through 79 of the 100 metro areas reported in the Brookings study. Employment recovery was weaker nine quarters after the start of the Great Recession in those 79 cities than it was during the same time span after the start of any of the previous three recessions.
In terms of overall recovery, the Twin Cities ranks somewhere near the middle of the nation’s metro areas — not doing as well as nearby Des Moines, Iowa, and Madison, Wis., but doing far better than big cities in California, Florida, Michigan and Arizona.
Housing-price recovery lags
One drag was the housing market. Even while employment held relatively strong, the Twin Cities lagged in the recovery of its housing prices. The Brookings report ranks it among the weakest 20 metro areas in the housing price comeback so far.
The Twin Cities also stood among the weakest metros in terms of bank-owned properties in March this year. But the report says that the Twin Cities is pulling out of that trough.
All of these calculations and comparisons can help us understand where we have been and where we need to go. We shouldn’t lose sight, though, of the people represented by the unemployment rates, the people with the greatest stake in economic recovery for the Twin Cities, the state and the nation.
Looking for jobs
Nearly 119,000 workers in the Twin Cities metro area still were looking for jobs in May. They represented the majority of the 190,000 who were counted jobless statewide that month.
These are the people at the middle of the debate facing Congress after its July 4th break: whether to extend unemployment benefits yet again. The federal government’s emergency unemployment compensation extensions expired at the end of 2009. Congress has twice extended them, but now the last extension has expired and the jobless are being phased off the benefits.
More than 44,000 jobless workers in the Twin Cities (part of some 80,000 statewide) were on extended benefits this year, and several hundred of them exhaust their benefits each week. A state extension could buy additional time for some of them.
Blocked by Republicans in Senate
Meanwhile, Congress is under pressure to quickly pass another federal extension. Senate Republicans blocked the latest extension bill just before lawmakers left town for the holiday, arguing that costs of the extension must be offset by cuts elsewhere so they don’t drive up the deficit. Both sides, though, express concern for workers trapped in long-term joblessness.
With the pitch of the related political debates sure to rise, Washington Post op-ed columnist Eugene Robinson offered this thought:
“The employment numbers aren’t just a monthly set of partisan talking points. They represent actual lives. They represent mortgages that might not be paid and college educations that have to be deferred; they tally mental health crises and broken marriages. Those sterile, emotionless figures speak of pain and anxiety. They mock our faith in the American dream.”
Sharon Schmickle covers science, economics, international affairs and other topics.