Minnesota government shutdown overshadows private-sector job growth

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You can thank the Minnesota state government shutdown for the July increase to 7.2 percent in the state’s unemployment rate.

That’s up from 6.8 percent in June, according to state jobs data released Thursday.

The state lost a net 19,800 jobs, mostly due to the government closure, the Department of Employment and Economic Development reported.

State agencies laid off 22,000 workers when political leaders failed to pass a budget on time. Those employees were idled for 20 days in the nation’s longest state government shutdown in at least a decade.

The shutdown masked underlying job growth, with the private sector adding more than 8,000 jobs, said DEED Commissioner Mark Phillips.

In July, governments cut 28,000 positions, while manufacturers, professional services and the financial sectors added jobs.

In the greater Twin Ports area, the number of people working state government jobs tumbled 16.4 percent in July, compared July 2010, though that number may not reflect all the laid off state workers, says Drew Digby, regional labor market analyst for the Department of Employment and Economic Development.

Overall, government jobs in St. Louis, Carlton and Douglas counties were down 9.2 percent, while private-sector jobs were up 3.3 percent. Jobs in wholesale trade, retail trade, transportation and warehousing, financial activities, professional services, education and health care all showed gains.

Local manufacturing jobs were up slightly from June, in their best showing so far this year, but even that high was 2.3 percent below the level of manufacturing jobs that existed a year ago, Digby noted. Jobs in leisure and hospitality were up 6.5 percent, reaching a record level.

Meanwhile, in Wisconsin, the July unemployment rate was 7.8 percent, up slightly from 7.6 percent in June. A net loss of 8,200 jobs effectively wiped out gains of a month ago.

State labor officials said 12,500 private-sector jobs were lost, partially offset by a gain of 4,300 public-sector jobs. A month ago, Gov. Scott Walker announced that the state had a net increase of 9,500 jobs in June, saying it was partly the result of a renewed focus on drawing tourists to the state.

In announcing the July numbers, Wisconsin Department of Workforce Development Secretary Scott Baumbach said national and international factors probably contributed to the decline.

Both the Minnesota and Wisconsin jobless rates remain below the national unemployment rate of 9.1 percent. All are seasonally adjusted.

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