Minnesota’s unemployment rate jumped up a half percent from June to July, as the state lost 8,600 jobs. The state’s July unemployment rate is 5.8%, higher than the national average of 5.7%. The July data marked a continuation of Minnesota’s declining performance.
Minnesota’s unemployment rate is no longer below the national average. When Governor Pawlenty took office in January 2003, his “no new tax” conservative public policy agenda was supposed to bolster the state’s economy and create more jobs. The sad reality is just the opposite.
The graph below compares monthly unemployment rates for the entire U.S. and Minnesota from January 1990 to July 2008.
Since 1990, both the Minnesota and the national unemployment rates have fluctuated, although Minnesota’s rate has remained significantly below the national average until recently. Beginning in approximately January of 2003, the gap between Minnesota’s unemployment rate and the national unemployment rate began to disappear. The graph below shows the gap between the Minnesota and the national unemployment rates from January 2003 to July 2008.
During the era of “no new taxes,” state investment in education, transportation, and other public services has diminished both in real dollars and relative to other states. Progressive voices in Minnesota predicted that this pattern of disinvestment would ultimately harm the state’s economy. The most recent unemployment rate data would seem to indicate they were right.
For information regarding Minnesota’s shrinking public investment and deteriorating economic performance, see the recent Minnesota 2020 report, Minnesota’s Slip Toward Mediocrity: Less Investment, Less Return.