Consider the economy in bad shape? It's worse than you think
The national economic news can be summarized in a word: Gulp.
Worse, as Dane Smith notes this morning, Minnesota's economy is actually under-performing compared to the national standard. Smith -- like the three authors of another op-ed in today's St. Cloud Times -- focuses on the absence of smart public investments.
This is a fact, but sadly not the whole picture. Some hair-whitening state stats to follow.
As we've noted before, investing in infrastructure is one of the smartest long-term economic decisions we can make collectively. That's true of other social spending, too -- it's an investment in Minnesota's people. Give people a shot at an education and better jobs, and they can build better lives for themselves and their children. Get kids out of poverty, and they contribute more to society.
That's long-term. In the short term, things look like they're going to get worse. The housing market's cold has the rest of our state's economy wheezing for the foreseeable future. Nationally, the dramatic drop in service industry jobs is the latest indicator of a wobbly house of cards.
"This is a stunning fall,'' said Michael Moran, chief economist at Daiwa Securities America Inc. in New York. "If accurate, it's dire news on the economy.''
Consider that in the context of the latest Minnesota labor statistics released on Feb. 1. Some lowlights:
* In November and December, there were 87 mass layoff events. A "mass layoff" is defined as when one employer has 50 or more unemployment insurance claims filed against them within one week. That means big employers are hemorrhaging jobs fast. In the four months prior to November combined, there were less than 40 similar batches of layoffs.
* For the metro area, construction saw the biggest job losses -- a troubling 4.4 percent number over the last year. That's all happening during the biggest public works project in a long time (35W reconstruction), plus the Twins stadium and the Wakota bridge. These enormous, high-profile endeavors can't mask the collapse of new home construction. The losses have been steady since September.
* Information sector jobs are down four percent. All those Strib and Pi Press slots haven't been replaced elsewhere, and even though online media is growing (whew), that doesn't offset the dramatic overall drop.
* Even the good news isn't good. The lone growth sector in the metro area is health care, and that's largely due to consolidation in the industry (Boston Scientific, Medtronic, Guidant). Which means our growth is just job loss from elsewhere being moved here.
If we were to graph the economy's last 60-120 days, it might look like the Price is Right's game Cliff Hanger, where a yodeling replica climber makes his way to the edge of a mountain. He must approach the ledge, but not go over.
Are we at the precipice, or are we over already?
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