The economy of northern Minnesota has been compared to a three-legged stool, propped up by the timber, taconite, and tourism industries. The global pandemic has made that foundation wobbly. Unfortunately, some of the actions taken by government bureaucrats are threatening to kick it right over.
As we work to slow the spread of COVID-19, restrictions put in place by government bureaucracy have created a new crisis for the heartbeat of northern Minnesota’s economic livelihood. Minnesota has more than 500,000 citizens unemployed. For perspective, that is nearly 100,000 more than the entire population of Minneapolis. Inconsistent and confusing stay-at-home orders and decisions made behind closed doors by government officials have exacerbated this problem and threatened the long-term survival of our timber, taconite, and tourism industries.
Our iron mining industry and support services — from parts suppliers to local restaurants to shipping companies — are the backbone of our economy here in northern Minnesota. China is doing everything in its power to kick us while we are down by continuing to dump steel and manipulate currency to the detriment of our Minnesota industries.
The decline in demand and price is creating a perfect storm that is putting timber, taconite, and tourism industries in jeopardy. Think about steel. Who is buying a new car or appliance right now? Many car dealerships and appliance dealers are shuttered because they have been declared nonessential. This is bad not only for Minnesota but for a resource that is critical to national security.
Forgotten in this economic crisis is the Minnesota Permanent School Trust. Every Minnesota school child benefits from royalties paid by mining and logging operations on school trust land; with less production comes fewer royalties. Mineral producers Hibbing Taconite, KeeTac, and Cleveland Cliffs Northshore Mining have been forced to idle facilities, temporarily laying off nearly 1,500 blue-collar Minnesota workers. Loggers also buy the rights to harvest trees from school trust lands, so a decreased timber demand significantly reduces payments to your local school district.
After a horrendous winter with terrible ice conditions decimated northern Minnesota resorts, another crippling crisis stands ready to decimate our resort industry once again. Years ago, we could count Minnesota’s resorts by the thousands; today, that number is less than 800. With cancellations because of health concerns, travel restrictions, and economic hardship, by the time our resorts can operate as usual there could be fewer than 400 resorts remaining. Resorts are not multimillion-dollar corporations; these businesses are often mom-and-pop operations run by the second or third generations of families. If they’re lost, who will be left to be stewards of our beautiful lands and lakes?
The best way to protect Minnesota’s timber, taconite, and tourism industries, and the tens of thousands of jobs they support, is to help Minnesotans return to work safely and get our state’s economy going again.
Allowing any of our Minnesota iron ore, timber producers, or resorts to go bankrupt would undo much of the progress made in the last three years to build up the American economy. Iron or timber going bankrupt would hurt Minnesota’s regional economies and our national security by forcing us to once again rely on foreign producers.
In the Minnesota Senate, we have passed funding to support our Minnesota Department of Health, hospitals, and front-line workers, all with overwhelming bipartisan support. Legislators are working to increase testing for COVID-19, and Minnesota companies are stepping up phenomenally to help manufacture personal protective equipment.
We can and should safely reopen Minnesota’s economy and take steps to ensure businesses have the needed access to capital so that they can come out stronger than before. The state should partner with community banks to ensure there is capital at the local level, much like what the federal government did with the Paycheck Protection Program. Local banks are essential parts of each community. They can often originate business loans much more efficiently than the government can, making sure the much-needed capital gets where it’s needed the most.
All state legislators must continue to work as a team to ensure we start taking steps to begin opening Minnesota’s economy sooner rather than later. The governor’s model proves we can do this now while maintaining public health and safety.
What we need to realize is the cure should never be worse than the disease. Minnesota has overcome adversity many times in the past, and we can and will do it again.
We all know the world will look different when things go back to “normal,” but we should ask ourselves what kind of Minnesota we want to come back to. The longer this crisis goes on, the less likely we will recognize our new normal.
As someone who grew up in a family business and who is a current small-business owner, I know firsthand how vital strong timber, taconite, and tourism industries are to local businesses and the state economy. As a legislator, I am committed to standing with our blue-collar workers, miners, loggers, resorts, small-business owners, and all of northern Minnesota to reopen quickly and safely.
We will defeat this pandemic and come out stronger; it’s what Minnesotans do. Once we overcome this, I’m confident our blue-collar workers across this state and country will help fuel our economic recovery.
All Minnesota Workers are essential. We will defeat this together.
Republican Sen. Justin Eichorn of Grand Rapids represents north-central Minnesota’s District 5 in the state Senate.