What areas of our economy are hurting?by Annie Baxter, Minnesota Public Radio
Minnesota is seeing big job losses in some of its key industrial sectors, and the numbers are bleaker than in other states. Several of the industries getting hit the hardest have ties to the housing market, which is in a slump. That means layoffs are on the rise.
St. Paul, Minn. — Chad Drury bears an unfortunate distinction: he works in residential construction, which has lost the greatest percentage of jobs this past year in the state's labor market.
Jobs in the home-building sector were down nearly 14 percent between December 2006 and December 2007.
Until recently, Drury worked as a construction superintendent, overseeing contractors and suppliers on home constructions. But the housing market softened, and Drury's employer began handing out pink slips.
"Every few months they made more cuts until I was finally one of the unfortunate ones in November here recently," he says.
Drury promptly applied for new jobs. His applications are spread across the dining room table at his home in Fridley. Drury reaches for a stack of papers about 4 inches thick. It contains dozens of job inquiries.
"These are all the companies I've responded to ads, that I considered to be dead," Drury says holding up the pile. "I didn't hear anything back after about 3 weeks."
Another, much slimmer pile holds correspondence from the five or six companies that did call Drury back.
He's up against droves of other people in his field who are also out of work. They're not alone.
Last month, Minnesota's unemployment rate had the biggest monthly increase in more than 25 years, jumping one half of one percent to 4.9 percent.
The state is losing the most jobs in construction and manufacturing, according to state labor market analyst Steve Hine with the Minnesota Department of Employment and Economic Development or DEED. Hine says we're ahead of other states in education and health services job growth, but the rest of the picture is grim.
"In essentially all other areas of the economy we're currently lagging the nation and lagging most states in terms of overall job growth," Hine says.
Some of the the worst-hit industries are unrelated to housing, such as food manufacturing, which lost 7 percent of its jobs between December 2006 and 2007.
But a number of the sectors taking big hits do rely on housing. Wood product manufacturing jobs fell nearly 9 percent during the period in question.
The job losses may increase as more companies falter.
At the Engineering Building Components company, EBCO, in Hopkins, the empty warehouse floor tells part of the story. The company used to make wood trusses to support floors and roofs.
"We've been dismantling all the machinery and we've sold a lot of it," says Bob Milless, general manager of EBCO.
Milless stands in the middle of huge, nearly empty space. In a few weeks, EBCO will be out of business.
A few forklifts and piles of wood sit in the cavernous space that used to hold truss equipment. The housing industry's softness is now driving EBCO to close its doors.
Milless has worked here for 34 years. He's 57 and the shutdown is pretty traumatic for him.
He says he's not sure what he'll do once the company closes.
"I don't know yet. Maybe collect unemployment for the first time in my life. I don't know," he says.
Labor market analyst Steve Hine says workers in fields like manufacturing and construction don't move easily into other sectors without retraining.
"So, the areas of weakness do make it difficult for people to regain employment quickly upon being laid off," he explains.
But Chad Drury, the construction superintendent, has been lucky in that regard. He managed to bounce back from his unemployment stint after a few months without retraining, though he has had to shift his focus a bit.
His experience is in residential construction, but he got a job offer this week with a commercial construction company.
Drury's excited about the offer, but chagrined by how hard his recent job hunt has been, compared to one he did two years ago.
"I had sent out resumes in response to, I believe, four job postings. I had interviews with three of the four and I received offers from two of the four," he says. "So a 50 percent rate in terms of getting offers from sending out resumes, and I'm at one of 80 today."
Drury says he should be back to work within a few weeks. He just hopes that commercial construction won't follow residential construction into a slump, and put him out of a job again.
- All Things Considered, 01/31/2008, 5:19 p.m.