Shocked, SHOCKED, to see Iron Range unemployment gap

Iron Range newsOver the weekend, you may have seen the front page story from the Mesabi Daily News declaring the fact that Iron Range unemployment is 64 percent higher than the state average. This was a statistical analysis by editor Bill Hanna, not new information, yet presented in Pearl Harbor banner headline form on the front of the Range’s largest daily newspaper.

While Gov. Mark Dayton speaks with pride of the state’s unemployment rate so far this year, you don’t hear mention of the Iron Range.

And for good reason.

Pretty hard to put a good spin on an Iron Range unemployment rate that is 64.3 percent higher than Minnesota’s overall average for the first seven months of 2014 through July.

Hanna acknowledges that the iron mining industry is doing very well right now, mentioning Magnetation’s growth on the west Range. The inference is that this factor alone is not enough to save unemployment numbers (true). The story goes on to point out that PolyMet and Twin Metals, the controversial nonferrous mining projects on the east Range, remain tied up in regulatory red tape. The inference there is that these projects alone (nothing else is mentioned) can fix the problem. The rest of the story is pretty much iterations of the simple division problem that provided the headline.

There is one fact that is not listed in the story: the negative gap between Iron Range unemployment and the state average has existed for my entire natural life. I simply can’t think of a time since the taconite boom of the early ’70s where those rates wouldn’t have had some kind of gap, ranging from 30 to 100 percent.

For the sake of argument, let’s check something simple: how was the unemployment gap in 2010, just before Gov. Dayton took office?

On Election Day 2010, Minnesota unemployment was 7.1 percent, compared to about 4.5 percent now. Using the same math principles as the MDN, that equals a statewide workforce participation improvement of about 38 percent statewide. In 2010, the average between Grand Rapids, Hibbing and Virginia unemployment rates was just shy of 9.3 percent. Today that same group has an 8 percent unemployment rate, for an improvement of about 23 percent.

So there’s that gap again, right? The employment picture statewide and on the Iron Range both improved under Gov. Dayton, but the Range improved less. Well, now this is getting to be a muddled assertion. That 150-point headline is looking a bit alarmist.

The Iron Range has a volatile, natural resources based economy highly subject to commodity prices and global market trends. These kinds of economies always have higher unemployment rates — except during brief boom periods, which are followed by even higher unemployment rates. Mining employment is highly automated now, which is why an improved outlook for mining hasn’t translated to an outright boom in employment numbers. It doesn’t matter if Mickey Mouse or Moses is the governor, only a diversified economy will close the gap between Iron Range unemployment and the state average.

It is encouraging that the Mesabi Daily News is at least acknowledging the economic problem. Perhaps it is the first step toward Range leaders acknowledging that 25 years of waiting for flim-flam developers to do their thinking for them has been a frustrating, fruitless endeavor. Aside from the devastating 1980s, when the Range’s whole economy nearly died, regional unemployment has never since been as high as it was under Gov. Dayton’s predecessor, Tim Pawlenty. I’m not going to sit here and tell you that was all his fault, either. What it means is that DFL and Republican administrations will continue to see this state/Range unemployment gap until we have the foresight to invest in the Iron Range with an eye toward self-generated diversification.

The real story is that few if any candidates of any party are using this approach. There’s your problem. There’s your headline.


  1. Interesting Jon Tevlin article, sunday’s Star Trib “MN Workers: some gained more than others” gathered opinions on how the MN general worker fared in the last year from folks at Carlson School of Business and Jobs Now Coalition.

  2. I’ve been following your blog and the arguments you make for diversifying the economy in Northern Minnesota. This article is another nice contribution to that line of thinking.

    Seems to me the future of the region depends on developing industries and businesses that add value to the abundant and renewable resources located in the region. Rather than sell biomass to burn, for example, Marvin Windows in Warroad produces high value windows and millwork. On the entrepreneurial scale, in Park Rapids is a small company that produces highly sought after whiskey barrels. Ryan’s Rustic Railings near Orr sells products throughout the Midwest.

    With abundant and renewable lumber and water resources, an under-developed tourism industry, and a location at the crossroads of various transportation and energy networks, that value-added businesses have enormous potential for the region provided there is an entrepreneurial culture ready to take on the necessary risks.

  3. I thought that page one was for news, objectively reported, and that the editorial page was for the newspaper’s/editor’s opinion. Executive Editor Bill Hanna, writing editorially on page one as always, doesn’t think this applies to him.

  4. Minnesota’s unemployment rate has fallen by 9% under Democratic governors and risen by 7% under Republican governors since 1977-

    Which party is better for MN is not a debatable question.

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