MinnEcon Category Archive: Economic Lookouts

Economic Lookout: Better times on the Range, long-term worries

Posted at 2:30 PM on March 2, 2011 by Paul Tosto (0 Comments)
Filed under: Economic Lookouts

MinnEcon note: Aaron Brown spoke last summer about his concerns that policy makers were betting, again, that the Iron Range's mineral wealth would save its economy.

Since then, mining's been on the upswing and unemployment is down on the Iron Range. In Hibbing, the jobless rate's dropped from 9.6 percent in August to 8.5 percent.

The taconite mines have been hiring and the "good news is welcome," he says.

At the same time, Brown, a source in MPR's Public Insight Network, worries the euphoria of a recovering economy will again put off the conversation about creating jobs beyond the mines.

He'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."

Check out Brown's video report and then post your thoughts below.

Interested in being an Economic Lookout? Contact us directly at MinnEcon.

Unemployment in Hibbing (not seasonally adjusted)

Aaron Brown writes the MinnesotaBrown blog. He teaches communication at Hibbing Community College.

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Consumer price inflation

Posted at 2:20 PM on September 17, 2010 by Chris Farrell (0 Comments)
Filed under: Economic Lookouts

Government statisticians said today that consumer price inflation remains tame. The Consumer Price Index (CPI) is up a mere 1.1 percent over the past 12 months ending in August. The so-called core rate of inflation--the CPI minus volatile food and energy--has risen a 0.9 percent over the same time period.

Economic numbers like gross domestic product and the consumer price index often seem abstract. But here's a real world implication of the latest CPI figures that will affect the finaces of some 50 million Americans. It looks like Social Security beneficiaries will receive no Cost of Living Adjustment (COLA) for the second year in a row.

The COLA for Social Security is calculated every October. The CPI data from the third quarter (July-August-September) is compared to the previous year's number. So, for 2011 Social Security recipients won't get a payment increase.

Many retirees will feel the financial squeeze. For instance, medical costs are going up and the elderly use health care services more than younger adults. The Bureau of Labor Statistics has tried to figure out if older Americans face a different inflation rate than the rest of the population. The BLS created an experimental inflation index called the CPI-E to capture the inflation rate of the elderly.

It's higher. The CPI-E rose by 126.5 percent from 1982 to 2007 (the years of the experimental index) compared to 110.0 percent for the CPI-W. (The CPI measure used for the Social Security COLA calculation.) In other words, the elderly faced average annual increases of 3.3 percent and workers 3.0 percent.

The good news: If we did get deflation--an overall decline in the price level--as a growing number of Wall Street analysts fear, Social Security benefits can't be cut. They just stay unchanged.

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Economic Lookout: 'One-man' businesses shortchanged?

Posted at 9:26 AM on September 7, 2010 by Paul Tosto (1 Comments)
Filed under: Economic Lookouts, Economic stimulus, Greater Minnesota

MinnEcon note: Brent Olson is a Big Stone County commissioner who keeps a close eye on the western Minnesota economy. In August, he shared some thought provoking short videos on how his friends and neighbors are doing in the recession.

In this latest post, he looks at whether the hundreds of one-person businesses in Big Stone County are being shut out of grants and other aid because they're not creating jobs.

The economy depends on the 400 or so people who run the one-person car repair shop, store, salon and similar businesses, he says. Yet they aren't viewed as job creators and that puts them at a disadvantage.

"If you look at any sort of government aid program, stimulus money or if you're applying for a grant, you'll see a line that says how many job will this create," says Olson. "If you put 'zero,' you're out of luck.

"You can't get any help at all. You're not even on the radar and that's a real issue.... the government is telling us, 'Yeah, you don't matter'... people who contribute $17 million to the economy in Big Stone County, they're cut off from just the little bit of extra assistance that could really make a profound difference."

Interested in being an Economic Lookout? Drop us a line.

Olson is a western Minnesota writer and Big Stone County commissioner

Bonus Info: Here's a chart from the Minnesota Department of Employment and Economic Development showing 13 month unemployment in Big Stone County, the region around it, and Minnesota (click on the chart for a larger view).

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Economic Lookout: In Rochester, recovery remains elusive

Posted at 5:00 PM on August 25, 2010 by Paul Tosto (0 Comments)
Filed under: Economic Lookouts, Jobs & unemployment

MinnEcon note: Teri Gibbons is a Rochester nurse and a MinnEcon economic lookout, sharing stories about the economy around her. In April, she gave us a thumbnail look at Rochester and shared frustrations about the housing market.

In her latest dispatch, she shows us why she's unconvinced that a recovery is underway.

Interested in being an Economic Lookout? Drop us a line.

I've written before about real estate and the job situation so I thought an update of how things have changed in Rochester over the past six months or so was in order.

House sales are down almost fifty percent. Considering that sales were already stagnating when I first wrote it is a sad commentary about how our economy is allegedly improving.

Three out of every five houses in my neighborhood are for sale and I see that all around town.

Some houses are priced so low you would think they'd go fast but the loans just aren't out there due to people not having the higher down payments needed or because their credit rating was destroyed the past two years so rebuilding is like scaling a rocky crevice.

The Workforce Center has an increase in persons with degrees -- usually middle age now in that void between getting their kids through college and retiring financially secure -- that are finding themselves overqualified for many jobs or unemployed in their field for so long that they are no longer marketable.

The majority of jobs listed in the classifieds are for newspaper delivery or long haul drivers.

Nurses living in the area are finding limited jobs but if they go to a website or two headhunters are wooing nurses from all over the US to work, in of all places, the facility they are being told there are no openings at.

Engineers are being laid off but then "consultants" from around the US and other areas of the globe are being brought in to do the job without benefits.

There needs to be another school levy if we are to be able to afford teachers and books but people are feeling tapped out so it is our children that suffer.

Unemployment extensions have almost doubled for this area. Media may project this image of billowing economic success but it is my opinion it is nothing more than an illusion.

Teri Gibbons is a registered nurse in Rochester. She says she's always looking at what's going on around her, trying to be impartial.

Statewide and Southeast Minnesota unemployment rates during the recession (click for a larger view).

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Economic Lookout: The economy as your neighbors see it

Posted at 1:00 PM on August 19, 2010 by Paul Tosto (0 Comments)
Filed under: Economic Lookouts, Greater Minnesota, Jobs & unemployment

Brent Olson is a Big Stone County commissioner who keeps a close eye on the western Minnesota economy. In May, he told us about spotting some hopeful economic signs in his hometown of Clinton.

In this latest post, he tries a cool experiment. "In one pleasant evening when we had a house full of people...I asked them to tell me what they wanted to about the economy."

The result: short videos that open a window on how our friends and neighbors are doing in the recession.

Given today's economic news, I thought this was a great time to post these. Minnesota's July jobless rate came in at 6.8 percent, unchanged from June.

The data came with some positive signs -- Minnesota has added 29,100 jobs over the past 12 months -- mixed with the reality that construction and other sectors are still struggling badly and job-wise, it's a long climb back.

The recent gathering at Olson's house offered a range of views and experiences on the state's labor market, which intrigued him. He wanted to get their unfiltered accounts.

"The guests ranged from a 17 year old about to be a high school senior who needed more hours (working) at the nursing home to a University of Minnesota employee with a PhD and a statewide staff," he told us.

Check out Olson's videos, then post your thoughts below. Tell us what you're seeing in this economy.

Interested in being an Economic Lookout? Contact us directly at MinnEcon.

Olson is a western Minnesota writer and Big Stone County commissioner

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The cost of war

Posted at 4:25 PM on August 11, 2010 by Chris Farrell (0 Comments)
Filed under: Economic Lookouts

As the summer of 2010 winds down the wars in Iraq and Afghanistan are in their eighth and tenth years. The Minnesota National Guard has actively served in both conflicts and elsewhere throughout the world. Sad to say, we've had all too many reminders of the human cost of war over the years.

But the financial cost of war is also getting increased attention as Americans worry more about the nation's persistent federal deficits and ballooning national debt. The numbers are big with the cumulative total in direct military costs associated with these conflicts closing in on a trillion dollars.

There are other expenses associated with war that aren't included in the direct military expenditure category. Take the life-cycle spending on veterans. Spending on the World War 1 cohort of veterans peaked in 1965, nearly half a century after the end of the conflict. The money that went toward the World War 11 generation of veterans first peaked in 1972 and again in 1980, or roughly 30 years after the end of hostilities. Of course, the life cycle costs of veterans eventually run out as the soldiers die off.

These examples come from two recent papers by economist Ryan D, Edwards, economist at Queens College-CUNY. In A Review of War Costs in Iraq and Afghanistan and U.S. War Costs: Two Parts Temporary, One Part Permanent Ryan attempts to come up with a comprehensive calculation on the overt costs of war, such as military spending, fatalities, and destruction of capital and the long-term, more hidden expenses, which include the costs of war borne by combatants and their caretakers. A number of other factors come into play, too. The macroeconomic price can include the diversion of savings toward war industries and away from private productive investment. Interest charges that are incurred by postponing the payment of the military bill off into the future are another potential cost.

Of course, as Edwards notes, it isn't possible to come up with definitive figures. Many of the calculations he attempts are controversial within the profession. For instance, the most striking figure he comes up with is that the pain and suffering per veteran may be as high as 10 percent to 25 percent of lifetime wealth.

He also reviews the track record of other studies that attempted to quantify the price of war in Iraq and Afghanistan.

It's an important investigation. Since the Civil War, while direct military spending still accounts for a majority of war-related spending at least a third of the federal budgetary costs of warfare have been long-lived. "Depending on the scope of the conflict, the unfunded obligation to pay future veterans' benefits starting from the end of the conflict can range from 5 to 50 percent of GDP," he writes. "This is a very large commitment."

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Economic Lookout: New college grad, facing the recession

Posted at 9:03 AM on August 13, 2010 by Paul Tosto (0 Comments)
Filed under: Economic Lookouts

MinnEcon note: MinnEcon readers know we've been concerned about new college grads dealing with the Great Recession. They're trying to get their lives and careers in gear but the economy's a mess.

Roxanne Johnson is among them.

A source in MPR's Public Insight Network, Johnson's joined our Economic Lookouts project -- Minnesotans sharing first-person accounts of the economy around them.

In her first post, she gives us a view on the challenges of looking for work and balancing life and the post-grad economy.

With financial aid, work study and some family help, she was able to graduate without an excessive school debt. But it's been difficult to find work in her field.

Nationally, only about one in four 2010 college graduates who applied for work had a job waiting for them at graduation, surveys from the National Association of Colleges and Employers show. That's better than the one in five who had a job in hand at the same time last year.

Check out Johnson's post and add your thoughts below.

Interested in being an Economic Lookout? Contact us directly at MinnEcon.

As a recent college graduate I have experienced the direct effects of the current recession. I am uneasy about my financial future. I was not able to secure a job in my field (I studied sociology) and am now working part-time at a Target store.

After being unemployed for two months I am happy to have a job and feel lucky since I know there are still so many people unemployed.

I believe -- and hope -- that I will be able to "get by" with this job and another part time job until I either find a full time job or continue my education. I plan to scrimp and save as much as possible, as I have to move out of my mom's condo in October.

I think I'm going to apply for food stamps as well as Medical Assistance or Minnesota Care because most part-time jobs don't offer health insurance.

I feel kind of guilty about applying for assistance because I have a college degree, but at the same time I am a low-income single adult.

My mom is willing to help me out a little with rent money or food. If I budget my money as best I can I hope I'll be able to make rent, eat healthy food, pay my cell phone bill and try to save some money.

That's my plan and it all sounds well and good until I remember I have to pay back my student loans!

I will have to start paying back my loans in a few months and I don't think I'll be able to make the payments. Deferment or delaying loan payments is an option but I don't know the details or requirements yet. I will most likely apply for economic hardship on paper, but I'll also be experiencing emotional hardship because of my financial situation.

I know I'm not the only college graduate in this predicament, which is encouraging. But it still doesn't make the financial burden and worry any easier to bear. I try my best to have a positive attitude and remember that everything will work out, even if it's not how I expected.

I know that I will continue to get up and go to work every day, keep a smile on my face, surround myself with positive people who make me laugh -- and try to avoid the temptation to buy everything I see at Target.

Note: Roxanne Johnson photo by Bridget Schwegman

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Economic Lookout: On the Range, jobs beyond mining?

Posted at 9:58 AM on August 11, 2010 by Paul Tosto (0 Comments)
Filed under: Economic Lookouts, Greater Minnesota

MinnEcon note: Aaron Brown gave us a view this spring on the hopes and concerns for Minnesota's Iron Range economy.

Today, Brown, a source in MPR's Public Insight Network, looks at the rebound in the region's core mining business and the potential for copper exploration.

While these are positive signs in a region that's been hit hard in the Great Recession, Brown worries about the Range "once again focusing on minerals to save an economy."

Policy makers should also be looking at ways to help people "make a living out here that aren't like the old ways."

Check out Brown's video report and then post your thoughts below.

Interested in being an Economic Lookout? Contact us directly at MinnEcon.

Aaron Brown writes the MinnesotaBrown blog. He teaches communication at Hibbing Community College.

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Deflation risk?

Posted at 9:42 AM on July 30, 2010 by Chris Farrell (2 Comments)
Filed under: Economic Lookouts

Ugh. (That's a highly technical economic term). The U.S. economy expanded at a muted pace during the second quarter of the 2010. Government statisticians calculate that the economy expanded at a mere 2.4 percent annual rate. They also figured that the recession--the deepest and longest since the 1930s--was even worse than earlier believed. The economic news is definitely disappointing. Yes, it's good that the economy continues to expand and, when looking more closely at the data, that business investment is soaring. But it's tough to see the job market improving anytime soon.

But here's what has grabbed my attention, and worry. The GDP report will stoke growing alarms over the rising risk of deflation. The price condition we're far more used to is inflation or an increase in the overall price level. Deflation is a decline in the overall price level. Deflation is an unfamiliar, unsettling bogeyman--with good reason. America's most notorious episode of deflation was also its last--the Great Depression. There was a brief, but largely forgotten, episode in 1955 and another one in 2003.

Of course, many economists and investors still worry about high and rising inflation in the future. Not now, but perhaps in a year or two. Their fear is that inflation will inevitably follow the enormous efforts Washington made to stave off a depression over the past two years. Nevertheless, the inflation rate keeps going lower.

For instance, the GDP report has the core rate of inflation--which excludes volatile moves in food and energy prices--increasing by 1.1% in the April-to-June period from the previous quarter. That's slightly below the 1.2% reading in the first three months of the year. Other major measures of inflation reinforce the picture of little to no price pressure. The 12-month change in the core Consumer Price index is 0.9 percent. It has been below 1 percent for the past three months. (Economists treat the core rate as the underlying trend rate of inflation.)

The inflation rate predicted by 10-year Treasury Inflation Protected Securities is only 1.4 percent. Of course, investors can be wrong--really wrong. But I find it intriguing that investors aren't that concerned that the Fed is printing money.

St. Louis Fed President James Bullard recently released a new research paper--Seven Faces of Peril--that the U.S. faces the real risk of a Japanese-style deflationary period. Here's an article from the American Magazine concerned about deflation, too.

What's the big deal with changes in the overall price level? Not much if the price changes are modest. But history shows that the economy breaking down when trust in money deteriorates. In a sense, the inflation rate and the deflation rate is a barometer of the economic and social health of a nation. Both are bad at the extremes. The historic record is clear: hyper-deflation, say a 1930s deflation rate of 5% to 10%, is ruinous. Period.

The record is mixed, however, when it comes to mild deflation, say a rate of 1% to 2% a year. Sometimes, mild deflation signals a weak economy that limps along, always vulnerable to bad news. Think Japan. However, it can also signal a vigorous, healthy economy. Think late 19th century America.

In other words, what matters is why are overall prices persistently falling. It's a topic I wrote a book about several years ago.

Here's my take: The global economy is undergoing a remarkable structural transformation of a kind that occurs once every century or two. The world is shifting from an era of structural inflation to one of underlying deflation. The combination of technological innovation, freer trade, out-sourcing, central bankers worldwide dedicated to fighting inflation, a more mature international monetary system, and all the rest act as a brake on price increases.

And this is why I'm so concerned about the recent trend in prices. The underlying price trend is deflationary and now, on top of that, is the downward momentum unleashed by the Great Recession and anemic recovery. St. Louis president Bullard is right: The Fed and other central bankers had better start worrying about falling prices and taking bold steps to combat it.

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The New Frugality

Posted at 11:32 AM on July 9, 2010 by Chris Farrell (0 Comments)
Filed under: Economic Lookouts

The Great Recession was still in full force for much of 2009 when I wrote The New Frugality. The book came out in January, 2010 and by then we knew that the recession had been the longest, deepest, and most punishing downturn since the 1930s. Very few people were left unscathed by one or several of the following traumas: unemployment, pay cuts, slashed benefits, cuts in hours worked, declining home values, foreclosures, short sales, and bankruptcy.

People adapted to hard times by changing their lifestyles to consume less and put more money into savings. Households worked at paying down their debts, too, from second mortgages to credit cards. Thrift was in and profligacy was out.

Of course, the question was always would the changes in everyday behavior and financial values last. Or was the embrace of frugality simply a practical response to bad economic times? Sure, folks clipped coupons, held off buying bling, and searched for bargains. But these were thrifty tactics to toss aside as soon as the economy revives. When the good times rolled the credit cards would come out and wants would be once again rationalized as needs.

My argument is no. The Great Recession marked a watershed in household behavior. That even when the economy came back the experience of the past three years was searing enough that folks wouldn't get as debt-extended and savings-starved as before. Even more important, wage gains over the past three decades have been anemic after adjusting for inflation. Financially vulnerable households weren't about to take on debts like before. Another major theme was that sustainability was going mainstream and that during the Great Reccession more and more people learned that being green and frugal reinforced one another. .

The latest evidence that Americans are changing their personal finance habits comes from a Pew Research Center survey, A Balance Sheet at 30 Months: How the Great Recession Has Changed Life in America.

It found that the Great Recession had "fundamentally changed borrowing, saving and investing habits of the American public--now and quite possibly for a long time."

The survey results are fascinating. And the title for the section on managing money? The New Frugality.

The people surveyed by Pew certainly cut back on their spending; they borrowed less; and they don't plan on boosting their borrowing much even when the good times roll.

There're a lot more to the survey. For instance, it shows that Americans don't expect home values to rebound anytime soon; that many expect to delay retirement; that there has been a downturn in expectations for a decent retirement; and, perhaps most importantly, that they're very worried about their children's economic prospects. Fewer than half of surveyed adults believe that when their children are their age that they will enjoy a higher standard of living. Indeed, 26% say their children's standard of living will be lower, up from 10% holding that opinion in 2002. Yikes!

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Consumer price inflation

Posted at 7:02 PM on June 17, 2010 by Chris Farrell (0 Comments)
Filed under: Economic Lookouts

Government statisticians reported earlier today that U.S. consumer prices (CPI) fell a second straight month during May. Over the past 12 moths consumer inflation has been running at a 2% pace.

The so-called core rate of consumer inflation--the CPI minus volatile food and energy--is up 0.9%. In essence, consumer inflation is non-existent and that's good news. It relieves pressure on the Federal Reserve to raise rates and reassures investors that neither a steep rise in prices or a sudden drop in prices is imminent.

After all, a key measure of the economy's health is what's happening to the overall price level.

Here's why. What will a dollar be worth in a year, 5 years, 10 years from now? Trusting that a dollar will hold its value--that a dollar today will still be worth a dollar in a year or in ten years encourages us to do all kinds of good things, such as saving and investing. And vice versa, of course.

Statisticians at the Bureau of Labor Statistics calculate the consumer price index by tabulating price quotes on about 80,000 goods and services collected in 87 urban areas and from some 23,000 retail and service businesses. Data on rents come from 50,000 landlords or tenants.

The numbers are adjusted in mathematically sophisticated ways to come up with an index. Still, the CPI does have it flaws.

For one thing, taking quality improvements into account isn't easy. It's not that difficult to compare price changes of books, for example. A copy of Adam Smith's The Wealth of Nations, published in 1776 still looks pretty much the same today. He'd still recognize it as his book. But some products change a lot. A digital camera is a camera, but its really different from an old Kodak or even a Nikon SLR.

The CPI struggles to incorporate the impact of new technologies that attract a lot of consumer dollars and affect our quality of life, such as personal computers, cell phones, and MP3 players.

There's more. Another issue is called substitution bias. The CPI assumes that what we buy doesn't change much. Hah! We all tend to buy less of an item that is rising in price and more if prices are falling. A classic example is going to the supermarket and loading up on chicken when the price of meat goes up, or filling the basket with apples rather than oranges because apples are suddenly cheaper.

Let me add one more layer of complexity. It's called outlet bias. It simply means we shop at different stores than before. When I started buying CDs in the early 1990s I'd go to a record store. By the late 1990s, you could buy CDs on the cheap at big discount stores. Guess where more and more people bought their CDs. But now we download them.

Nevertheless, despite all these problems the CPI is pretty decent measure of the overall price trend. Even better you can get a market-based measure of inflation expectations using Treasury Inflation Protected Securities (TIPS). The yield on TIPS is forecasting that the rate of inflation will be slightly under 2% over the next 5 years and a fraction above 2% over the next 10 years.

Of course, many economists and investors worry about high and rising inflation in the future. Not now, but perhaps in a year or two. Their fear is that inflation will follow the enormous efforts Washington made to stave off a depression over the past two years. The inflation-is-coming crowd is making a huge bet on gold, a traditional haven against the ravages of inflation. The yellow metal closed at $1247.2 on the Comex on June 17, 2010--up about 25% over the past year.

What's the big deal with changes in the overall price level? Not much if the price changes are modest, up 1 or 2 percent, down 1 or 2 percent (that's called deflation). But history shows that society starts breaking down when trust in money deteriorates. In a sense, the inflation rate and the deflation rate is a barometer of the economic and social health of a nation. Both are bad at the extremes.

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Economic Lookout: Dumpsters and other hopeful signs

Posted at 11:00 AM on May 24, 2010 by Paul Tosto (0 Comments)
Filed under: Economic Lookouts, Greater Minnesota

MinnEcon note: Brent Olson is a Big Stone County commissioner who keeps a close eye on the western Minnesota economy. In April, he shared a story of high demand in Big Stone County for a single government job.

Today, he tells us about spotting some hopeful economic signs -- remodeling dumpsters and a new grain dryer -- in his hometown of Clinton, MN.

"Out here on the prairie I haven't detected anyone singing 'Happy Days are Here Again,' he says. "But it's my opinion that things are looking up, just a little."

Check out his video post and then add your thoughts below.

Interested in being an Economic Lookout? Contact us directly at MinnEcon.

Olson is a western Minnesota writer and Big Stone County commissioner

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Economic Lookout: Sacrifices in a 'jobless recovery'

Posted at 12:00 PM on May 11, 2010 by Paul Tosto (0 Comments)
Filed under: Economic Lookouts, Greater Minnesota, Jobs & unemployment

MinnEcon note: Jessica Sundheim gave us a view recently on the health of the economy in and around Fergus Falls. Today, she gives us a personal look at the jobless recovery and what it means for Ottertail County.

Interested in being an Economic Lookout? Contact us directly at MinnEcon.

A great deal of attention is paid to the want ads in our household. My husband has never really quit looking for a job since we moved here five years ago.

His current employment is not related to his educational background. With a bachelor's degree in biology and a teaching certificate, he is suited to be a naturalist in the field. For a few years he managed an environmental learning center, but the private funding was cut and we were back at square one.

Right now, my husband works for a company selling food door-to-door. He leaves around 8:30 a.m. and comes home at around 10:00 p.m.

When he started the position he made straight commission, which made for some interesting months. Over the years the company set up a more consistent pay structure in exchange for mandated quotas.

The hours are difficult for our family of six, but the job pays better than retail and includes benefits.

Yes, I single-mom it during the week. But harder than that is watching the dreams, hopes and aspirations of a person I dearly love slowly dwindle. Nearing forty, I feel that my husband is resigning himself to whatever the market will offer.

In rural communities teaching jobs are somewhat precarious because of declining enrollment and tight budgets.

Teachers who have the least amount of seniority are the first ones cut. The insecurity coupled with a very low starting salary has left my husband completely disillusioned with the idea of being a science teacher.

It's not just our family. Many of our friends have similar stories, although some offer hope. One friend stuck it out with a pop delivery job for years in order to keep their health insurance.

Others work alongside my husband and share job leads as they all compete for something with better hours and lower pay.

Another friend drove 45 miles back-and-forth for work until just recently when, after three years, he was able to find a job in his field, here in town.

There are often of jobs available in retail, service, and factories, but they all offer low wages and a high rate of turn over. Many do not include benefits. As a result, when my husband recently applied for a factory job with Cargill, there were quite a few applicants.

They first had to complete a series of personality type tests, and interviews followed for those who passed. Fifteen people, including my husband, were interviewed for two positions. The job entailed working a swing shift, 7 a.m.-7 p.m. or 7 p.m.- 7 a.m., with a few days off in between. It also required working all major holidays, but we were thrilled with the idea of my husband either finishing work at 7 p.m. or going into work at 7 p.m.

Twelve years ago, I could not have imagined him applying for this type of position, so far outside of his skill set.

However, today that position would translate into at least three hours of family time per day, plus having him home during the supper hour! The salary was similar to his current salary, except it offered annual increases in pay (not hours worked). The position also included benefits.

Unfortunately, my husband did not get the job, but he responded as he always does, by immediately getting back out there and combing the want ads.

I often hear speculation about whether this will be a "jobless" recovery. Lately, national numbers show businesses are hiring again, and I was pleasantly surprised to see that reflected in our local want ads.

There was a period of about a month this spring when there was nothing of note in the paper, and prior to that the ads were sparse. Though there is a seasonal fluctuation in employment in our area, the new job listings contain some real winners. Because health care is one of the area's biggest employers, most of the "good" jobs (living wages + benefits) require medical training.

Others also involve technical expertise -- computing, electrical engineering, agricultural background, or at least one year of experience in the field. The rest of the job openings are in retail / service industries (Pizza Hut needs servers) or in factories or processing plants (i.e. turkey production).

As a full-time student at our local community college, many of my colleagues are younger than 20 working toward nursing degrees, getting generals out of the way, or earning college credits while still in high school.

In one class, our instructor asked more than twenty-five students how many planned to stay in the area or return after completing their education.

I was stunned when I looked around the room and I was the only one with her hand raised.

This is a fabulous town with excellent schools and beautiful surroundings. Yet, how can I blame them? How many in my generation would have ever volunteered to work twelve to fifteen hour shifts and Saturdays, in careers far outside of our interests, for wages that offer lifestyles that pale in comparison to what our parents had at our ages?

I came out of the 1990's when a student went to college to earn her bachelor of arts degree with the encouragement of a bright future in whatever field she so desired.

My colleagues are far more savvy.

Many are highly specializing in technical fields that result in careers that cannot be exported, and hold no illusions of finding employment close to home.

Jessica Sundheim is a full-time student and mom

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Economic Lookout: Entrepreneur in a recession

Posted at 12:00 PM on May 10, 2010 by Paul Tosto (0 Comments)
Filed under: Economic Lookouts, Housing & mortgages

MinnEcon note: JP Rennquist gave us a great look recently at the challenges of being jobless in Duluth and the hope for better days. Today, he gives us a view on trying to start a nonprofit in a lousy economy.

As we've written, there's nothing like a recession to get you thinking about being your own boss. Rennquist shows us why it might not be that easy.

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I am looking for work. But as someone with an entrepreneurial spirit, I'm also looking to create my own job.

I had worked for many years as a parent educator for dads and I have a wealth of experience, training and connections in that field. So I decided to explore creating a nonprofit called Father Fire, an education program for dads in NE Minnesota and NW Wisconsin.

I assembled an advisory board, we applied for a grant and got it. Father Fire received a demonstration grant from the Lake Superior Initiative.

I think our organization can grow and develop into an actual job for me that pays a living income and allows me to use my skills to help strengthen families in our region.

But we're definitely not there yet.

Unfortunately, the grant has no funds for actual programming, or even to pay me a small honorarium for my work. So as I have been looking for work, applying for jobs, networking and all of the traditional and not-so-traditional job search activity, I have also been volunteering about 20 hours a week to help build up this new organization.

Survival is a real problem for nonprofits right now. Changes to tax exempt laws, government funding shortfalls and other financial pressures along with a greatly increased need for services could force many nonprofits completely out of business.

The nonprofits most likely to survive are the nimble organizations, that are able to target services accurately and make changes in strategy quickly and smoothly in response to the needs of constituents and demonstrate effectiveness to donors, foundations and other financial contributors those are the groups most likely to survive.

In the "new normal" for nonprofits, small, single purpose organizations like the one I am creating are going to be eclipsed by larger more stable organizations.

My organization is being urged to consider working with a partner, or becoming part of another organization. We aren't able to access any funds from our demonstration grant until we either incorporate as our own 501c3 organization, or enter into a contract with an existing non-profit as our fiscal agent.

The Catch-22 for a start up is deciding if we want to find a solid, stable nonprofit organization to sponsor our organization or stay small and focused.

On our own we are independent, nimble and adaptable, as part of another organization we can be strong, stable, and more secure in rough waters. This is a tough choice.

At a recent workshop, Reid Zimmerman, a nonprofit trainer, got to the heart of the dilemma. "Nonprofit," he said, "is an IRS Tax Status, NOT, a management technique!"

JP Rennquist describes himself as "pretty broke" but with a million-dollar view of Lake Superior from his modest home in Duluth's Central Hillside neighborhood.

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Economic Lookout: At Duluth job club, a portrait of unemployed

Posted at 12:00 PM on April 23, 2010 by Paul Tosto (0 Comments)
Filed under: Economic Lookouts, Greater Minnesota, Jobs & unemployment, MinnEcon Indicator

MinnEcon note: JP Rennquist told us in December he was "new to unemployment" but working his contacts and staying positive. In his first Economic Lookout report, he gives us a look at the challenges of being jobless in Duluth and the hope for better days.

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Monday Morning Job Club, Duluth. After a six week hiatus I finally returned to job club last week. And it had grown.

The club is a semi-formal gathering of unemployed people led by staff from the Minnesota workforce center and the city of Duluth workforce development program.

We had our biggest group ever.

That may have been due to the fact that we had a recruiter from Thrivent Financial for Lutherans looking to fill a few spots in its newly expanded Duluth office.

Or it may have been just that unemployment keeps rising here in Duluth, in spite of a few glimmers of hope .

I started coming to job club after I lost my non-profit job last November. It draws people from the old economy (teachers, manufacturers, construction workers) and the new economy (writers, web developers, telemarketers).

Some are displaced homemakers dealing with an empty nest, a divorce or the loss of a primary wage-earner in their family. Some are ex-prisoners navigating the difficult passage from incarceration to independence. Others are baby boomers nearing the end of their professional careers or young adults at the dawn of their working lives.

One man is trying to get back into the workforce after taking six years off to be a stay at home dad to his special needs daughter, who is now in school. Another guy, a recent addition who showed up during my hiatus, got laid off by Sam's Club when they outsourced their food samplers to an outside firm.

The structure is pretty simple: start with who you are and the kind of work you have done or what you might be interested in doing, later we go around the tables again and share the results from our efforts or things we'd like help with. If there is time, we share goals for the next week. Along the way there is a lot of conversation and, perhaps surprisingly, a lot of laughter.

There is definitely a lifeboat philosophy there - people realize that everyone is essentially in the same boat and they offer lots of support, encouragement and ideas to other job seekers.

Each person gets a piece of heavy card stock paper to write their name on and put in front of them on the table.

When I started coming, the name cards fit neatly in two rows on just one table. Now they cover almost two full tables. There is a stack of cards about 2 inches high for people who have been gone for awhile, either for jobs or other distractions. That's where I found mine.

I had gotten a job but instead of a new career it turned into a temporary position. They couldn't afford me, "after all," the owner said, sales were in a real slump.

I was a little embarrassed to go back after telling everyone I had a job. The people at job club were sorry to hear that my job didn't work out, but they were also happy to welcome me back.

Most of them had been through something similar before.

In March Duluth's Advanstar communications announced they were laying off 100 employees. Well, they weren't just laying them off, the company, which specializes in publishing, events and web design, said it was outsourcing them to a company in Asia.

Some of those outsourced employees have already been to job club even though their severance packages run through the summer.

Being unemployed is not fun in this job market, it's a real challenge, it's demoralizing and sometimes it seems like it's never gonna end.

But for me, and a thick stack of other attendees, Monday morning job club at least makes the job search much more bearable, and for some people who have come and moved on now, it's helped to make their searches successful.

JP Rennquist describes himself as "pretty broke" but with a million-dollar view of Lake Superior from his modest home in Duluth's Central Hillside neighborhood. He runs a couple of micro-businesses out of his house, does a lot of volunteering and is "waiting for his ship to come in."

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Economic Lookout: Sustaining the economy in Fergus Falls

Posted at 11:00 AM on April 22, 2010 by Paul Tosto (0 Comments)
Filed under: Economic Lookouts, Greater Minnesota, Jobs & unemployment

MinnEcon note: Jessica Sundheim is a Fergus Falls student and mom and one of the most active sources in MPR's Public Insight Network.

In November, she gave us a personal look at how the federal stimulus was helping her family. In February, she relayed stories of friends who've had to roll the dice on health coverage.

Today, she gives us a thumbnail look at the economy around her in Fergus Falls and Otter Tail County.

Creating jobs that can sustain a family is probably the region's biggest struggle, she says. Area farmers also had a tough 2009.

Still, "our economic outlook isn't all that bad," Sundheim says. "We're able to continue to attract new businesses. And those that have been here for over a century continue to make it even in the toughest of economies."

Check out her report and then post your thoughts below.

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Unemployment in Otter Tail County (click on the chart for a larger view)

Source: Minnesota Department of Employment and Economic Development

Jessica Sundheim is a full-time student and mom in Fergus Falls.

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Economic Lookout: Housing frustration in Rochester

Posted at 12:00 PM on April 27, 2010 by Paul Tosto (0 Comments)
Filed under: Economic Lookouts, Greater Minnesota, Housing & mortgages

MinnEcon note: Teri Gibbons is a Rochester nurse and a MinnEcon economic lookout, sharing stories about the economy around her. A few weeks ago, she gave us a thumbnail look at Rochester.

Today, she shares a story of being sideswiped by the real estate crisis.

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Last summer I needed to find a new place to live. Considering the number of homes being foreclosed on I could find three homes on almost every street for sale in the areas I was looking at.

It was obvious many houses were being sold for far less than they were worth but even more were being sold for much more than they were worth so the owners could try to catch up financially.

I asked if I could rent with option to buy since I've lived in an unexpected money pit or two over the years. The answer was that it was a final sale or nothing.

To my way of thinking, if a person was due to be foreclosed on, any income that could go to a mortgage payment was better than none whether it was by renting out the property or selling it.

The reason I had to move was because the landlord had failed to make payments and the house had been foreclosed on.

I called the Realtor that was handling the property and the mortgage company that held the lien to the house.

Both agreed to me continuing to live there and keep the property up (improve it, actually!) but the bank said I would have to completely move out for two months and then they would sell it to me.

Sorry, but once I move my furniture it's staying there for a while.

Most of the houses that owners refused to rent out remain vacant almost a year later.

The house I had been renting has fallen into such disrepair it will need to be condemned
or the bank that owns it will have to put thousands of dollars into repair before it will meet any code and be available for sale.

The legal notices in the paper have gone from a few pages of foreclosures and delinquent taxes ( I personally find it painfully humiliating to those that have struggled in good faith but fell on hard times, a further insult) to full sections of the newspaper.

"Experts" may say the market is rebounding but I have to wonder.

Teri Gibbons is a registered nurse in Rochester. She says she's always looking at what's going on around her, trying to be impartial.

Bonus Info: In 2007, nearly one in four homeowners and four of ten renters spent 30 percent or more on housing in Rochester's Olmsted County, according to the Minnesota Housing Partnership.

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Economic Lookout: Tempered optimism in Rochester

Posted at 12:00 PM on April 19, 2010 by Paul Tosto (0 Comments)
Filed under: Economic Lookouts, Greater Minnesota, MinnEcon Indicator

MinnEcon note: Teri Gibbons is a Rochester nurse and source in MPR's Public Insight Network who keeps a close eye on her local economy. In her first Economic Lookout dispatch, she gives us a thumbnail view of Rochester.

Interested in being an Economic Lookout? Contact us directly at MinnEcon.

As I drive around Rochester, I see work in process with public works projects and it provides hope that things are finally improving.

Family members tell me more are eating out and shopping which has increased their hours in minimum wage jobs. If someone wants to be a newspaper carrier there are plenty of openings.

But what about nurses and teachers?

Teachers and paraprofessionals fear budget cuts may mean larger class size and less services. It will be a summer of wondering if the funds will be there for them to return or not.

This has happened before and the funds were available at the last minute but will this be the case again?

Hospitals are hiring from within, shifting staff from areas that were barely adequately staffed for the most part; nursing home positions are not as available as they once were.

So, my question to you is ... as we drive on our improved roads to school or to the hospital are we any better off?

I'll grab a fast food sandwich on my way to Wal-Mart and ponder this.

Teri Gibbons is a registered nurse in Rochester.

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Economic Lookout: Eye on the Range

Posted at 12:00 PM on April 8, 2010 by Paul Tosto (0 Comments)
Filed under: Economic Lookouts, Greater Minnesota

MinnEcon note: We're pleased to launch a regular feature called Economic Lookouts -- Minnesotans in MPR's Public Insight Network sharing first-person accounts of the economy around them.

It's a natural next step for MinnEcon. We've really tried to let the economic stories and insights of Minnesotans drive what you see here. With Economic Lookouts, we'll let folks talk directly about the economy as they see it.

Today, Aaron Brown, gives us a read on the Iron Range. He writes the MinnesotaBrown blog and teaches communication at Hibbing Community College.

The Range has struggled in the recession. Hibbing unemployment spiked to nearly 19 percent last year. It's better now but still higher than the rest of Minnesota.

"We need a dose of creativity and we need a dose of 21st century thinking to get us out of this mess," Brown says in his video. "We're not there yet."

Check out Brown's report and then post your own thoughts below.

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Unemployment in Hibbing (click on the chart for a larger view).

Source: Department of Employment and Economic Development

Aaron Brown is the author of "Overburden: Modern Life on the Iron Range" and the MinnesotaBrown blog. He teaches communication at Hibbing Community College.

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Economic Lookout: High demand, few jobs in western Minnesota

Posted at 10:00 AM on April 14, 2010 by Paul Tosto (0 Comments)
Filed under: Economic Lookouts, Greater Minnesota, Jobs & unemployment, MinnEcon Indicator

MinnEcon note: Brent Olson was one of the first voices in our original Economic Lookouts project. He's a county commissioner and keeps a close eye on the economics of western Minnesota.

He helped us last summer examine job creation and the stimulus.

Today, he shares a story of high demand in Big Stone County for a single government job.

Based on the county jobless rate, Olson figures "nearly thirty percent of the people looking for a job applied for ONE job."

Check out Olson's report, then post your thoughts below.

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(Unemployment in Big Stone County (click on the chart for a larger view)

Source: MN Dept of Employment and Economic Development, seasonally unadjusted

Olson is a western Minnesota writer and Big Stone County commissioner

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