Posted at 7:00 AM on October 21, 2010
by Paul Tosto
Filed under: Jobs & unemployment
We've been watching a weird phenomenon the past few months, a steep drop in Minnesota's labor force through the spring and summer. We'll know later today if it's continuing when the state releases updated labor force data along with the September unemployment rate.
Some 32,217 Minnesotans left the state's labor force (sum of the employed plus the unemployed) between April and August. There are guesses why, but no one good explanation.
The crucial question we've been asking: Why isn't the improving economy bringing discouraged workers back into the labor force the way experts expected?
That's the way it's supposed to work -- things get better and all those folks who gave up start trying again.
"The jobless may be going back to school, retiring early or taking care of family until the labor market creates opportunities that use their skills and match their reservation wage." Kyle Uphoff, a state labor analyst, told us last month.
The school explanation makes sense. Enrollment in the Minnesota State Colleges and Universities system hit another record this fall.
The thing is, we've always believed that when the job opportunities return, the people will, too. Right now, that's not the case.
Minnesota's labor force participation rate -- the percentage of working age people who have a job or are unemployed and seeking a job -- slipped to 71.8 percent in August. We haven't see a rate that low here since December 1988.
Will September data show the state labor force is finally growing again?