Go to HHH home page.
Smart Politics
 


December 2013? July 2016? Estimating When Unemployment Will Return to Pre-Recession Levels in Minnesota

Bookmark and Share

Governor Tim Pawlenty and State Economist Tom Stinson have frequently declared that Minnesota is in its worst recession since World War II.

If that is the case, how long will it take to return to the halcyon days of a thriving Minnesota economy, with unemployment returning to its pre-recession levels of a year ago?

If past is prologue, many, many years.

The current recession, says Stinson, began a little over a year ago. At that time, the unemployment statewide was hovering around 4.5 percent, according to the Department of Employment and Economic Development (the seasonally adjusted unemployment rate was 4.5 percent in November 2007, January 2008, and February 2008, and 4.7 percent in December 2007).

Since then, the jobless rate has climbed to 8.1 percent through February’s estimated numbers.

The last time the Gopher State flirted with numbers this high was June 1983, at 8.0 percent – about a half year after the state’s unemployment rate peaked at 9.0 percent in December of 1982.

The state first reached 8 percent unemployment back in June 1982. However, it took 2 years and 8 months to rise from 4.5 percent unemployment in October 1979 to reach that 8 percent mark. In the current recession, it has taken only 12 months to rise from 4.5 to 8.1 percent unemployment.

And the Reagan recovery?

After dropping from 9.0 percent unemployment in December 1982 to 8.0 percent in June 1983, it took an additional 5 years and 2 months to return to jobless levels of 4.5 percent, eventually achieved in March 1988.

So, what about today – if there is an "Obama recovery?"

Following the 1980s model, here is one best case scenario:

If, hypothetically, unemployment levels have peaked during this current recession (and no economist is saying they have), that would mean Minnesota would not return to its February 2008 jobless rate of 4.5 percent until December 2013, holding to the Reagan recovery blueprint.

If, however, unemployment levels continue to rise to 9 percent during the coming months, as many economists predict, the end date for Minnesota to return to pre-recession jobless levels will be extended several months longer into 2014.

And that’s a best case scenario?

Counting from the date unemployment last hit 4.5 percent in Minnesota during the Jimmy Carter administration, in October 1979, it took 8 years and 5 months to return to that level, in March 1988. Using that formula as a guidepost, Minnesota wouldn’t see pre-recession unemployment levels statewide until July 2016.

There are, of course, many unknowns at this point. When will unemployment reach its peak? At what level will it peak? Will the eventual recovery be uninterrupted or will there be bumps and bruises along the way? Moreover, the Minnesota economy of 2009 is different than that of 1983, as are the national and world economies.

But what makes the rate of recovery (that has not yet begun) even more difficult to project is that the escalation of jobless claims have risen at record rates during the past year – it’s been a recession on steroids.

While Reagan keyed on tax cuts while presiding over his recovery, one wonders if the nation and Gopher State can more quickly curb this recession and expedite a recovery with the performance-enhancing drug it received this year – in the form of the federal government’s recently-passed stimulus package.

Follow Smart Politics on Twitter.

Previous post: Erik Paulsen's (Semi) Close Shave Could Get Closer in 2010
Next post: Pawlenty Faces 4th Largest Democratic-Dominated Legislature Among GOP Governors Nationwide

1 Comment


  • Well, I do not have a computer at home, nor email, but I am not not surprised by these numbers and predictions, as I lived through them in the 1970s to 1980s. The worse thing, though, is that Clinton had the formula used to calculate unemployment changed. The old formula, now called U-6, indicates that true unemployment is over 17%, with some experts claiming that it is over 22%. If Obama's past performance is any indication, his employment summit will lead to proposals that--if carried out--will worsen the situation. Bear in mind that large retailers such as K-Mart and Wal-Mart are highly dependent upon banks for funding their daily operations. If the banking industry recieves another shock, such as the collapse of Abu Dhabi, then it is possible that many retailers will close stores and merge their remaining stores with other marginal firms. The same is true for our remaing factories. Some states, such as Ohio, Michigan, and Minnesota--as well as Oregon, washington state, California, as well as Massachusetts and New York, will be hit as badly as they were in the depth of the Depression.

  • Leave a comment


    Remains of the Data

    Who Has Won the Most Votes in US Senate Electoral History?

    Only three of the Top 10 and nine of the Top 50 vote-getters of all time are currently serving in the chamber.

    Political Crumbs

    Six for Thirteen

    Collin Peterson remarked last month that he is leaning to run for reelection to Minnesota's 7th Congressional District in 2016. If he does and is victorious, he will creep even closer to the top of the list of the longest-serving U.S. Representatives in Minnesota history. The DFL congressman is only the sixth Minnesotan to win at least 13 terms to the U.S. House of the 135 elected to the chamber in state history. Peterson trails 18-term DFLer Jim Oberstar (1975-2011), 16-term Republicans Harold Knutson (1917-1949) and August Andresen (1925-1933; 1935-1958), and 14-term DFLers Martin Sabo (1979-2007) and John Blatnik (1947-1974). Andresen died in office, Sabo and Blatnik retired, and Knutson and Oberstar were defeated at the ballot box in 1948 and 2010 respectively. At 70 years, 7 months, 11 days through Monday, Peterson is currently the ninth oldest Gopher State U.S. Representative in history. DFLer Rick Nolan of the 8th CD is the seventh oldest at 71 years, 1 month, 23 days.


    Seeing Red

    Congressman Nick Rahall's failed bid for a 20th term in West Virginia this cycle, combined with a narrow loss by Nick Casey to Alex Mooney in Shelley Moore Capito's open seat, means that West Virginia Democrats will be shut out of the state's U.S. House delegation for the first time in over 90 years. The Republican sweep by two-term incumbent David McKinley in the 1st CD, Mooney in the 2nd, and Evan Jenkins over Rahall in the 3rd marks the first time the GOP has held all seats in the chamber from West Virginia since the Election of 1920. During the 67th Congress (1921-1923) all six seats from the state were controlled by the GOP. Since the Election of 1922, Democrats have won 76 percent of all U.S. House elections in the Mountain State - capturing 172 seats compared to 54 for the GOP.


    more POLITICAL CRUMBS

    Humphrey School Sites
    CSPG
    Humphrey New Media Hub

    Issues />

<div id=
    Abortion
    Afghanistan
    Budget and taxes
    Campaign finances
    Crime and punishment
    Economy and jobs
    Education
    Energy
    Environment
    Foreign affairs
    Gender
    Health
    Housing
    Ideology
    Immigration
    Iraq
    Media
    Military
    Partisanship
    Race and ethnicity
    Reapportionment
    Redistricting
    Religion
    Sexuality
    Sports
    Terrorism
    Third parties
    Transportation
    Voting