Letter from the Director
This annual state of the state issue of Trends, unlike previous June issues that provided an annual recap, focuses on the past three months and a look toward the future. Due to the truly unprecedented times we are living in and the dramatic labor market changes of the past few months, we decided it was permissible to break with tradition.
Like so many offices around Minnesota and the nation, the Labor Market Information Office started the scramble to move everyone to home-based telework during the middle of March. Technology issues, the lack of work-issued laptops and cell phones, and employees faced with balancing work and the care of young children at home were all challenges that we and so many others around Minnesota, the U.S. and the world faced. We were lucky in that our occupations allowed us to work at home.
While all this was happening, we knew that policy makers, employers and the general public needed more timely information on the state of Minnesota’s economy than ever before. Our monthly employment and unemployment data would not begin to pick up the full effect of COVID-19-related layoffs until the April data release on May 21. When April data was finally released, they showed the unemployment rate had jumped more than 5 percentage points since March and the number of payroll jobs fell more dramatically than at any time during the history of the series dating back to 1950. Meanwhile, applications for Unemployment Insurance (UI) spiked more sharply than we’ve ever seen. UI program data is our most immediate data source. Others, such as the Job Vacancy Survey and the Quarterly Census of Employment and Wages would lag by 6 months or even longer.
Long-standing racial and ethnic disparities in employment, education, health, housing, economic security and public safety were put into sharp relief by the COVID-19 pandemic and corresponding dramatic downturn in the labor market. These unacceptable disparities were highlighted for the world through the killing of George Floyd by Minneapolis police. The destruction of businesses and property in Minneapolis and St. Paul and other Minnesota cities during the mostly peaceful protests following Mr. Floyd’s death will, undoubtedly, further exacerbate and prolong job loss in some communities.
The pandemic recession has hit workers of Color and Indigenous workers in Minnesota harder than white workers because of the industries and occupations in which they are concentrated in the labor market. Throughout the June Trends articles we provide what information we have on the racial and ethnic employment disparities that are apparent so far during this COVID-19 recession. This information is sometimes inadequate. One example: labor force measures from the Current Population Survey lag because the size of the survey is too small to provide sound monthly statistics on Minnesota’s populations of color. However, the information from the UI program has great detail by race and ethnicity, as well as by other demographic information.
We have the good fortune of living in a state with a modern, nation-leading UI program. Early on we were assigned the role of data dissemination for the UI program, which was busy making sure that UI ran as smoothly as possible for customers amidst unprecedented demand. This role allowed us to provide data and analysis on a daily and weekly basis to help people understand the dramatic changes Minnesota’s labor market was undergoing and to help inform policy and decision making. Our Daily and Weekly Unemployment Insurance Statistics tool gives our customers access to detailed UI data to supplement our Monthly UI Statistics tool. In the process of building these tools and answering customer questions we learned a great deal about our UI program, resulting data and what it could and could not tell us about the labor market and the impact of COVID-related policies.
Looking forward, there are a number of positive signs that this pandemic-induced recession may be begin turning the corner and that the economy will begin to bounce back in the coming months. Minnesota’s unemployment rate was second lowest in the nation in April despite the state losing an unprecedented number of payroll jobs. Moreover, initial applications for UI have been declining for nearly two months and, more importantly, benefit requests have been slightly down over the week for three weeks, starting the week ending May 23. And, as I wrote this letter, the U.S. unemployment rate for May 2020 was released. To most people’s surprise it showed a decrease from April, down from 14.7% to 13.3% on a seasonally adjusted basis. This is excellent news and bodes well for the national as well as Minnesota’s labor market.
Even if, as is the widespread hope, the economy begins to improve this summer, different industries will bounce back at different rates and to different extents, in part depending on the unpredictable course that COVID-19 takes over the next months and years. In order to rebuild a more equitable Minnesota and position our state for long-term economic growth, it is important that assistance remains available to workers who lost their job no fault of their own and who may need additional help in finding sustainable work for the future.
By Oriane Casale