Our view: Yippee for the economy, boo for jobs

• Drew Digby

Drew Digby is the regional labor market analyst for the Minnesota Department of Employment and Economic Development. (2009 file / News Tribune)

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• Northeastern Minnesota unemployment rates fall

Yes, absolutely, be excited about the economic news that arrived last week, with figures that showed strong growth from 2009 to 2010 across all industries within the Duluth Metropolitan Statistical Area, an area that includes all of St. Louis, Carlton and Douglas counties.

But don’t go overboard. The news isn’t all good, as Drew Digby, the regional labor market analyst for the Minnesota Department of Employment and Economic Development, was quick to point out during a chamber-sponsored luncheon Tuesday at Clyde Iron.

And isn’t that so Duluth, where it seems no positive can be void of a negative, where no celebration can be held without caution?

But first, the good news. The Duluth area’s estimated gross domestic product rose 5.85 percent, from $9.23 billion in 2009 to $9.77 billion last year. Leading the way was a 115 percent jump in mining and natural resources, from $233 million in 2009 to $501 million in 2010. Even without mining, our GDP growth bettered the national average of 2.5 percent.

“(The growth) was really across the board,” Digby said. In addition to mining and natural resources, our manufacturing; trade; health care; finance and insurance; professional and business services; leisure and hospitality; transportation and utilities; and arts, entertainment and recreation industries all enjoyed healthy GDP bumps.

“And you think, ‘Wow, we should have a lot more jobs,’ ” Digby continued.

But (and here comes the bad news) we don’t. And, “That is sort of the paradox of what is happening in our economy,” Digby explained.

Only 120 new jobs were created from 2009 to 2010, he reported. That’s job growth of 0.1 percent while our GDP was growing by nearly 6 percent. Blame the recession, sure. But anyone who thinks job growth will catch up once the recession is over can think again. The recession has taught many businesses how to operate leaner. Why wouldn’t they continue to do so post-recession to continue maximizing profits?

“There’s this big transformation going on, a structural change,” Digby said, offering two examples. Production in mining grew 130 percent from 2003 to 2008 — with virtually no new jobs created. Similarly, production in manufacturing grew 38 percent — while its work force shrunk by 7 percent.

And the economic paradoxes continue:

The Northland’s long-term residential care industry employs a ton of people, about 5,000. But most of them make low wages, as low as $8 to $10 per hour.

The Duluth Economic Development Authority, APEX and others tout the region’s educated, dedicated, low-turnover work force when wooing new businesses and industries. But that work force is being gutted of its average-wage jobs. Educated and trained people who work hard just aren’t in demand, driving down salaries for bank workers, teachers and others from the shrinking middle class.

Say what you will about government jobs, but 30 years ago 24 percent of us worked for the government. In 2010, that dropped to fewer than 17 percent.

“We’ve lost hundreds and hundreds of government jobs,” Digby said. “For the work force, what it means is all those jobs in the middle are gone. … Those jobs have disappeared.”

Leaving 20 percent of Duluthians earning $11,000 to $22,000 a year, which is at or near poverty levels.

“One in five are out there working and really struggling to make ends meet,” Digby said.

Can we end on an up note?

“We’re still a place where people really, really want to be,” Digby said, referring to survey results released in August that said Northland residents have strong emotional ties to where they call home, something that bodes well for economic and other types of growth. Of course, the same survey also said we’re not very open to new ideas, new people, people who are different from us and college students.

So there’s yet another paradox. And isn’t that so Duluth?

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