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Minnesota Might Have a Jobless Recovery.

Minnesota 2020’s Jeff Van Wychen wrote a really interesting piece on whether the unallotment will mean Minnesota will have another “jobless recovery.” What this means is simple: during the recovery of a recession, the national unemployment rate stays higher than at the beginning of the recession. He points out that this recession we’re in now has become the worst of any Minnesota recession since data compilation began in 1976.

Based on early June numbers, the jobless rate in Minnesota increased to 3.6 percent. Before the current recession, the worst in Minnesota in unemployment was the recession of 1981, where from the start to the peak of the recession, the jobless rate increased by 3.5 percent. As the image suggests, Minnesota’s change in unemployment rate for the current recession might not have even hit its peak yet, and it has already surpassed the worst recession in Minnesota’s history.

Minnesota’s "no new tax" regime promised to deliver improved economic performance relative to the rest of the nation.  Instead, the opposite has happened, as the state’s economic performance in terms of the unemployment rate, job growth, median household income, and poverty rate have all deteriorated relative to the national average.

The budget cuts that have resulted from Governor Pawlenty’s unallotment have meant that more jobs will be lost. Cities are looking at cutting whatever they can to account for the loss of Local Government Aid (LGA), including reducing police and fire department staff and equipment, delaying purchasing playground equipment, and cutting park staff and recreation programs. Interestingly, an adherence to the "no new taxes" regime is forcing cities to consider property tax levy increases to account for the money they will lose. Track these cuts and more with the Defend Minnesota Budget Cuts Mapping Project and don’t hesitate to tell us how the budget cuts are affecting you by helping us build our map.


Photo Credit: Minnesota 2020

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