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How Long Will It Take to Regain the 65,000+ Jobs Lost in Minnesota in 2008?

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The near universal legislative support of the unemployment bill signed into law on Thursday by Governor Tim Pawlenty is a first step by the state to address an economic and employment crisis that is escalating at record levels in Minnesota. The bill will extend the unemployment benefits of more than 3,000 unemployed workers who have not yet qualified for a federal extension of their benefits for up to 33 weeks.

While this measure aimed at lessening the current economic hardships of a particularly vulnerable segment of the state is but a first step, Minnesotans are no doubt eager to see how the DFL-controlled legislature and Governor Pawlenty can work together to curb the current jobless explosion and begin to restore these tens of thousands of men and women to the workforce.

Unfortunately, the grim prose invoked of late by the governor characterizing the dire economic situation faced by the state is not simply a political maneuver to lower expectations of his administration. He has no doubt looked into the state’s future by looking at its past.

Even if an economic turnaround began today, and brought to a halt the current employment skid, Smart Politics projects it could take at least four years to restore the 65,000+ jobs lost in the state during 2008.

Minnesota began January 2008 with a seasonally adjusted unemployment rate of 4.7 percent, with 137,360 residents out of work. The state closed 2008 in December with 6.9 percent of the labor force jobless, or 202,814 – a net job loss for the year of 65,454 workers.

The last time Minnesota endured an unemployment rate of 6.9 percent was 25 years ago, in January 1984. At that point Minnesota was already in an economic upswing, with unemployment levels having dropped or flattened in 14 consecutive months, dating back to November 1982 when the jobless rate peaked at 9.0 percent.

However, it still took the state nearly four years – from January 1984 to December 1987 – to reduce the unemployment rate from 6.9 to 4.7 percent. At that rate, Minnesota wouldn’t restore the 65,000+ jobs lost in 2008 until December 2012.

That, however, might be the optimistic view, as there is even more sobering news for the state of Minnesota today compared to the economic situation of January 1984: there are few signs the state will be able to stop the bleeding in the short-term and more job losses are expected throughout 2009.

Moreover, while the start and rate of recovery from this period of economic hardship cannot be known at this time, the fact that it will likely not mirror the rate from 1984-1987 is probably because it will only be worse – given the Governor’s characterization of Minnesota’s current economic crisis as the worst in the state since the Great Depression.

Minnesota's Employment Recovery, 1984-1987

Year
Month
# Unemployed
Rate
1984
January
151,390
6.9
1984
February
144,057
6.5
1984
March
141,796
6.4
1984
April
143,697
6.5
1984
May
142,063
6.4
1984
June
140,476
6.3
1984
July
135,560
6.1
1984
August
133,884
6.0
1984
September
133,554
6.0
1984
October
132,264
5.9
1984
November
131,930
5.9
1984
December
137,087
6.1
1985
January
137,263
6.2
1985
February
133,455
6.0
1985
March
131,173
5.9
1985
April
132,169
5.9
1985
May
127,314
5.7
1985
June
128,558
5.8
1985
July
137,725
6.1
1985
August
131,940
5.9
1985
September
136,254
6.0
1985
October
136,429
6.1
1985
November
136,313
6.1
1985
December
141,639
6.3
1986
January
134,660
6.0
1986
February
134,349
6.0
1986
March
133,338
5.9
1986
April
129,954
5.8
1986
May
124,066
5.5
1986
June
123,419
5.5
1986
July
122,806
5.4
1986
August
119,453
5.3
1986
September
121,224
5.3
1986
October
121,575
5.4
1986
November
123,224
5.4
1986
December
123,109
5.4
1987
January
121,200
5.3
1987
February
122,437
5.3
1987
March
122,802
5.4
1987
April
114,685
5.0
1987
May
120,417
5.3
1987
June
122,023
5.3
1987
July
118,056
5.1
1987
August
118,842
5.2
1987
September
117,471
5.1
1987
October
114,398
5.0
1987
November
113,167
4.9
1987
December
109,651
4.7
Source: Minnesota Department of Employment and Economic Development.


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  • Good Job We hope so get better

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