PoliGraph: Dayton’s accuracy on job growth claim depends on data set

During his State of the State speech, Gov. Mark Dayton made some troubling observations about Minnesota’s economy, including this one:

“Our employment growth averaged in the bottom 10 among the 50 states during the past decade,” he said on Feb. 9, 2010.

While the state’s job growth in the last decade has been lackluster, Minnesota’s rank is difficult to pinpoint.

The Evidence

Dayton’s facts come from a report by Minnesota2020, a left-leaning think tank that argues the state is in poor economic health. According to the report, Minnesota’s employment growth rate rank sank from 26th in 2002 to 46th in 2007, but was on the uptick again toward the end of the last decade.

PoliGraph crunched the numbers, too, and found that between 2000 and 2010, Minnesota’s rank hovered around 30th place – not in the bottom 10.

It appears the Minnesota2020 report used employment data from the Local Area Unemployment branch of the Bureau of Labor Statistics (BLS), which can include those who are self-employed and farm workers. PoliGraph used employment data based on the number of payroll jobs in the country from the Current Employment Statistics branch of the BLS, which likely accounts for the different rankings.

But regardless of where Minnesota ranks, the data underscore Dayton’s overall point: The state’s unemployment growth has been less than impressive over the last decade, lagging behind other states and the national average.

The state experienced above average population growth throughout the 1990s, and that translated to more jobs. But in 2001, the country fell into a recession. Minnesota’s job growth stalled around that time, and it hasn’t been able to bounce back since.

The reasons are a bit mysterious, according to state economists. In part, Minnesota’s job growth deteriorated along with national declines in manufacturing. Other industries, including financial services and the airline business, have suffered, and slow housing and construction industries may also have played a role. And it may be that some employers have been more productive with a smaller workforce.

All that said, employment growth is just one of many factors used to gauge a state’s economic health. Indeed, the state’s unemployment rate has consistently remained below the national average, Minnesotans make more income per capita than many other states, and Minnesota’s employment ratio – meaning the percent of working age people that do have a job – ranks among the top 10 in the nation.

The Verdict

PoliGraph ranks this claim Inconclusive because Minnesota’s employment growth ranks differently depending on the way you measure it. That said, Dayton’s overall point is correct: Minnesota job expansion in recent years has been modest at best compared to other states.

SOURCES

Minnesota2020, On Our Way to Average: Ranking Minnesota’s Economic Performance, by Jeff Van Wychen, January, 2010

Employment Growth Rankings: 2000-2010, Bureau of Labor Statistics, Non-Farm Employment, Seasonally Adjusted, created Feb. 11, 2011

Minnesota Management and Budget, Minnesota Economic Outlook, Nov. 2010

Minnesota Management and Budget, State Revenues on Forecast Since November, Jan. 2006

Minnesota Management and Budget, State Revenues on Forecast in February and March, April 1999

Management and Budget, November and December Revenues Less than Forecast, January 2001

Minnesota Management and Budget, Economic Outlook, Nov. 2008

The Hubert H. Humphrey School of Public Affairs, Economic Challenges Facing the Upper Midwest, March 2004, accessed Feb. 12, 2011

Minnesota’s Economics and Demographics: Looking 2030 and Beyond, by Tom Stinson and Tom Gillaspy, July 2008

Minnesota State Demographic Center, The Long Run Has Become the Short Run: Budget Implications of Demographic Change, Feb. 3, 2011

The Bureau of Labor Statistics, Differences Between Data Series, accessed Feb. 16, 2011

Interview, Jeremy Drucker, spokesman, Gov. Mark Dayton, Feb. 9, 2011

Interview, Art Rolnick, former director of research, Minneapolis Federal Reserve; Senior Fellow, the Humphrey School of Public Affairs, Feb. 11, 2011

Interview, Tom Gillaspy, State Demographer, Feb. 14, 2011

Interview, Catherine Varner, Economist, Bureau of Labor Statistics

More

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