Northern Minnesota more reliant on state paychecks

We still don’t know which government jobs will be deemed “essential” and “non-essential” (Justice Ed Stringer explains how they decided in 2005), but it does look like a shutdown could have a greater impact on Northern Minnesota than on the state as a whole.

Public Insight Network source Aaron Brown lives on the Iron Range and keeps an eye on Northern Minnesota for MinnEcon. Back in March, Paul Tosto spoke with Brown:

[Brown]’s also keeping watch on the political debate over public employees (he’s one). He’s not sure that people realize employee layoffs could cascade through the economy, hurting retail and other consumer spending. “The implications could be deeper here than in other parts of the state.”

Turns out, he’s right that Northern Minnesota is more reliant on state jobs in an important respect. MPR News Business Editor Bill Catlin has been looking at who makes up Minnesota’s state employee pool and he’s been crunching some numbers (see Marty Moylan’s story here). When compared to the statewide totals, Northern Minnesota’s workforce does not have a much higher percentage of state employees.

The impact would come from the wages they earn. The amount of money earned by state employees accounts for 2.7 percent of all wages earned in Northern Minnesota. In the metro, it accounts for 1.8 percent. While the numbers may seem small, this shows that state wages are 50 percent more important in northern Minnesota than in the overall state economy.

These wage calculations exclude the pay of state workers in the educational services field — people who provide instruction and training — because it unclear how the University of Minnesota and MnSCU schools would be affected by a shutdown. MnSCU schools appear more likely to be affected. When we do include state government employees who work in education, the difference is more stark. In this case, 5.6 percent of Northern Minnesota wages come from state employees’ salaries, compared to 3.6 percent for the state overall.

Here’s the breakdown (click on the table for a clearer view):

northernmn state jobs.JPG

Nate Dorr is a Public Insight Network source who works for the Minnesota Department of Employment and Economic Development (DEED) as a regional analyst in Bemidji. His town has a high rate of state employees and he’s worried about what a state government shutdown would mean for Bemidji. He writes, “Bemidji was hit hard by the recession, and this second or third wave of layoffs would be bad.” He’s concerned that some of the temporary layoffs that come with a shutdown could become permanent.

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