Unexpectedly, Part 2

As yesterday’s announcement that Minnesota has created only 2,900 jobs so far in 2014 makes the rounds, it will be important to put the numbers into a useful context.

For her part, the Democrat appointee in charge of Minnesota’s Department of Employment and Economic Development (DEED) says she isn't worried,

Minnesota’s economic indicators remain positive, and underlying employment data continue to look strong.

Unfortunately for the Democrats in charge of state government, the underlying data actually look even worse than the headlines.

As the Democrats whistle past the graveyard, touting a falling unemployment rate, the size of the state’s workforce continues to shrink.

That’s how the math works.  We have only created 2,900 jobs in 2014.  To make the unemployment rate fall—as it has since the start of the year—the number of people who have stopped looking for work must be more than the number of jobs created.

The only way to make that happen is for the size of the state’s workforce to shrink.  We have people quitting the workforce at a rate faster than we are creating jobs.

As I noted yesterday, the state’s workforce participation rate has fallen to 70.1 percent, the lowest level since 1980.

Since the peak of the last economic boom (June 2006), the state’s workforce has grown by less than four percent.  In that same time period, the state’s population has grown by something closer to five percent.  In other words, the only way we are keeping the unemployment rate down is to convince more and more Minnesotans not to bother looking for work.

I would not put that into the underlying strength column.