Minnesota’s unemployment rate dipped to 5.9 percent in November, but might not be good news. Minnesota also lost 13,700 jobs in November and more than 22,900 jobs in the last three months. How do we lose jobs and have lower unemployment?
According to the Minnesota Department of Employment and Economic Development press release, “Several factors could account for the conflicting results, including sampling errors in the separate surveys that are used to tabulate the unemployment rate and employer hiring, more people becoming self-employed or contract workers, changes in Bureau of Labor Statistics methodology, and a declining labor force participation rate.”
“More people becoming self-employed or contract workers” most likely means more people working without benefits and for lower income. “A declining labor force participation rate” means people giving up — no longer even looking for work.
MinnPost reports that Steve Hine, DEED’s director of Labor Market Information, questions the accuracy of the Bureau of Labor Statistics figures.
The beef that Hine and fellow state labor officers have is that the BLS started conducting employer surveys on its own last January. Saying it could save $5 million by not contracting with each state labor office to gather the survey data, the BLS in Washington felt it could do the same job at lower cost. …
As a result of the change, Hine said the BLS often misses what’s happening in the states and has to come back later to revise numbers, usually upward.
I’d like to believe that BLS is missing something, and Minnesota’s job picture is much better than the numbers show. That doesn’t seem likely, however, given the longevity of the trend.
Overall, Minnesota has added only 9,200 jobs since November 2010 — a mere 0.3 percent job growth. Cuts in state and local government spending are holding back recovery. The Minnesota DEED report says that, “Government led year-over-year job losses, down 12,800.”
Minnesota continues to report substantially lower unemployment than the national numbers — 8.6 percent in November. That’s a mixed blessing, since an unemployment rate below six percent means Minnesotans soon may lose eligibility for extended unemployment benefits. (Of course, the Republicans in the House may end the entire extended unemployment benefit program, so Minnesotans might not be alone.)
The rules for extended benefit periods are very complicated, but basically say that good news (lower unemployment in a state) leads to bad news — state’s unemployed workers are no longer eligible for extended benefit payments. MPR reports that, “The state has drafted letters to the roughly 14,000 workers who are either receiving extended benefits or poised to enter that program to warn them of its potential demise.”