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MinnEcon Blog
Paul Tosto

Rebound in the state’s labor force? Not yet

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We've been watching an unprecedented slide in Minnesota's labor force since the spring, waiting for the turnaround.

Steep drops in the labor force since April don't fit at all with the idea that we're in a recovery. Some 32,217 Minnesotans left the state's labor force (sum of the employed plus the unemployed) between April and August.

New data for September show a barely perceptible uptick in the labor force -- 383 Minnesotans.

So the labor force is still down by nearly 32,000 from the spring and the labor force participation rate -- the percentage of working age people who have a job or are unemployed and seeking a job -- stayed at 71.8 percent, the same as August and a rate not seen here since December 1988.

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.

Here are the updated charts on Minnesota's labor force and on the monthly labor force changes. Click on the charts for a larger view

We'll keep watching.

Among the best guesses as to what's happening -- displaced Minnesotans left the labor for and signed up for college in big numbers. Enrollment in the Minnesota State Colleges and Universities system hit another record this fall.

The bottom line question, though, still stands: If we're in a recovery, why isn't the labor force growing?

This Great Recession is denting a lot of our conventional wisdom about downturns and recoveries. Is the state's labor force drop signaling some problem in the Minnesota economy we haven't yet discovered?

As always, take a look at the data and tell us what you're seeing. Post below or contact us directly at MinnEcon.