More job losses predicted

Minnesota will likely shed an additional 61,000 jobs by the end of this year, and might not see any employment gains until early 2010, a state official said.

Steve Hine, labor market information director at the Department of Employment and Economic Development, made this grim prediction Jan. 13 to members of the House Bioscience and Workforce Development Policy and Oversight Division. No action was taken.

Hine said the projected net loss for this year would come on top of the approximately 39,000 jobs lost last year.

The projections are based on national economic trends predicted by Global Insight, a widely cited economic forecasting company, he said. Global Insight predicts an economic rebound in early 2010 — although, as Hine noted, it took Minnesota more than four years to regain the number of jobs it lost during the last recession, in 2001.

Among the other bad news, Hine said the state is likely to reach all-time highs in its total number of unemployed workers — as many as 260,000 by the end of 2009 — as well as the number of workers claiming and receiving unemployment benefits.

As if all that weren’t bad enough, he said Minnesota’s employment rate has also been lagging behind the national average in recent years.

“There’s a lot of speculation as to whether we’ve lost our luster here,” Hine said, noting that the state’s labor market, prior to 2006, had historically performed as good as or better than the United States as a whole.

Hine said the downturn in the housing market likely plays a role in Minnesota’s below-average employment rates. In particular, the state’s forest products manufacturing industry has been negatively impacted.

Division Chairman Rep. Tim Mahoney (DFL-St. Paul) said members of the division have their work cut out for them.

“We’re not growing the way we need to grow to keep the state healthy,” he said.

Division members also learned that the state faces the long-term challenges of an aging workforce, possible labor shortages and — despite an influx of immigrants — much slower growth in the state’s labor force.

Rep. Steve Gottwalt (R-St. Cloud), the division’s lead Republican, said the projected long-term trends are particularly troubling. “If these numbers are reflective of what’s going to happen even with the immigration we’re expecting, we’re in a world of hurt.”