State’s employers cut payrolls to weather recession

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In late January, International Paper, the world’s largest pulp and paper company, announced plans to shutter its Roseville plant. At the time, the container-board production facility employed 106 workers, including 88 members of United Steelworkers Local 264.

International Paper, like many of Minnesota’s employers, is looking to survive the global economic downturn by cutting labor costs. That trend revealed itself in the Minnesota Department of Employment and Economic Development’s labor market report for January 2009, released Feb. 26.

The statistics were dire. Employers shed 20,700 jobs in January, driving the state’s unemployment rate to 7.6 percent, the same as the national rate. Minnesota has lost nearly 75,000 jobs during the past year.

“Companies nationwide are concerned about the slowing economy and are cutting jobs to ensure their long-term survival,” DEED Commissioner Dan McElroy said, explaining the job losses.

Blue-collar workers are bearing the brunt of the recession in Minnesota. Manufacturers like International Paper eliminated 9,600 jobs in January – more than any other sector of the economy.

Nearly 62,000 of the 75,000 jobs lost statewide over the past year – roughly 82 percent – came from blue-collar or service sectors of the economy, including manufacturing (down 21,500 jobs); construction (down 18,600); trade, transportation and utilities (down 14,600); leisure and hospitality (down 6,800); and logging and mining (down 200).

Some good news
DEED has some good news for laid-off workers, however, courtesy of President Barack Obama’s economic stimulus plan. The agency announced March 2 that the state’s unemployed will receive an additional $25 a week under the American Recovery and Reinvestment Act.

Workers receiving either regular or federal extended unemployment benefits will be eligible for the supplemental payment. Federal extended unemployment benefits will also be available to Minnesota workers through the end of 2009.

Unemployed workers do not have to make a special request for the supplemental payment, DEED said. They can simply follow their usual procedure for receiving benefits and the supplemental payment will be made automatically.

The supplemental payment of $25 will be issued by the state’s Unemployment Insurance Program to every applicant who is eligible the week beginning Feb. 22, and for each eligible week thereafter, though the initial disbursement was not scheduled to begin until the week of March 15.

More information on unemployment benefits is available at www.uimn.org.

Small consolation
But unemployment benefits and severance packages are small consolation to workers at plants like International Paper’s Roseville facility, who find themselves looking for work in the tightest job market in recent memory.

Paul Lallas, Local 264’s business agent, said the company, which bought the Roseville plant from Weyerhaeuser last August, is phasing in layoffs until April 3, when it will officially close the facility.

“International Paper was saying there just isn’t enough capacity for the plant to stay open at this time,” Lallas said. “Some of the work will go to a facility in Arden Hills, other work will go to the company’s White Bear Lake facility and International Paper facilities elsewhere.”

Lallas said the company pledged to give workers at the Roseville plant preference for job openings at other International Paper plants when possible, but Lallas seemed less than hopeful about the prospects for most of the local’s 88 members.

“There’s a chance for some to transfer, possibly,” he said. “But it’s going to be tough, and it doesn’t look like it’s getting much better.”

Michael Moore edits The St. Paul Union Advocate, the official publication of the St. Paul Regional Labor Federation.

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