A Quick Economic View of Minneapolis, MN

No doubt Minneapolis is a recreational city with beautiful lakes, creeks, rivers, and parks. It is an outdoor paradise for the nature enthusiast. But one reason why residents of Minneapolis are able to appreciate these natural settings is because of their economic stability. Hence, Minneapolis sports a low, nationally competitive, unemployment rate and a highly diversified portfolio of industries.

According to the Department of Numbers, an informational website, the June unemployment rate in Minneapolis was 3.6 percent compared to the national unemployment rate of 5.3 percent. In addition, the total number of unemployed decreased from 72,222 workers in May to 69,581 workers in June. Since the unemployment peak of approximately 150 thousand persons in 2009 during the Great Recession, unemployment in Minneapolis has been trending downward at a fairly constant rate towards its pre 2001 unemployment levels of about 50 thousand persons. But what helped Minneapolis ride the storm between 2008 and 2011 was its industry diversification.

Minneapolis’ economic stability is partly due to its highly diversified industry portfolio. This means that the city does not have all of its eggs in one basket. As Edward Glaeser explains in his book Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier, a city that is industry diversified is better able to weather economic storms whereas a city with a monolithic economic portfolio like Detroit cannot.

Photo Courtesy of the Department of Numbers
Photo Courtesy of the Department of Numbers

This was because Detroit’s portfolio was mostly composed of auto industry firms. In other words, the vast majority of Detroit’s economy was invested in the auto industry. Detroit did not have enough of the other industries to ride the market wave of the Great Recession. Of course Detroit’s downfall from greatness stemmed from before the recent market violence. It had also previously suffered, along with its citizens, from government and private sector discriminatory practices in the form of redlining and educational policies, and low wages and the lack of job opportunities for disenfranchised groups. Thus, Detroit’s economic system was never built to withstand unfortunate market forces.

On the other hand, Minneapolis has solidified a fairly stable economy. For the year 2014, and according to the Minnesota Department of Employment and Economic Development, the city averaged 308,441 workers in both the government and private sectors. Of those 308,441 workers, 264,306, or 85.7 percent, resided in the private sector whereas the local, state, and federal governments employed 44,135 workers or 14.3 percent of the local work force. Local government averaged 21,444 workers for 2014, the largest population by far of the three levels of government.

So what does Minneapolis’ diversified portfolio look like? First, and as illustrated, it sports a substantial private sector work force. Second, in 2014, 9 Fortune 1000 companies called Minneapolis home: Target, U.S. Bancorp, General Mills, Medtronic, Ameriprise Financial, Donaldson Company, The Valspar Corporation, Xcel Energy, and Thrivent Finanacial for Lutherans. And third, the work force is distributed throughout construction, manufacturing, retail trade, finance and insurance, educational services, and healthcare and social assistance to name a few. For example, the finance and insurance, and professional, scientific, and technological services industries combined encompass about 20 percent of the private sector in Minneapolis. Although these sectors are not the largest sectors in Minneapolis, they are included in the top-tier of “[a]verage [w]eekly [w]ages.”

Photo Courtesy of

Now this economic stability and success ought to be congratulated. However, it is not all roses for many potential Minneapolis workers. For example, according to both Bring Me The News and the City Pages, the unemployment rate of “black” Minnesota citizens was approximately 4 times higher than “white” Minnesota citizens in 2014. The unemployment rate was found to be a bit lower in the metropolitan area, but Minneapolis’ unemployment rate between these two American groups is more than likely to be similar to the rest of the state.

This discrepancy in unemployment rates is important to consider. This is because this unemployment rate perpetuates a continued feedback loop onto the system and those most affected by it.

This means a given unemployed Minneapolis resident, for example, from a traditionally disenfranchised group is less likely to obtain a job, which means she, or he, is less likely to receive a living wage to sustain a family. This also means that her child is more likely to receive less food, and clothing, which means the child could potentially go hungry. This hunger, which would affect the health and psychology of the child, in turn would greatly influence the child’s performance in the classroom and thus affect the child’s performance in school over the duration of the education. And finally, this deficiency in school performance would affect the child’s potential to compete for college. Hence, maintaining this otherwise immoral and resovable experience.

Indeed, there are other reasons for why Minneapolis currently is doing well economically. This author hopes that this economic stability and vitality continues. But there are other economic discrepancies in the Minneapolis system and there are people not reaping the current economic upswing, for example the 69,581 unemployed workers and this needs to be addressed. Minneapolis should be recognized and congratulated for this post-Great Recession recovery, but it should also be criticized for not doing enough. Minneapolis is looking pretty good, but it can be better and it can bring all of its workers with it. Once this happens, then all workers will be able to appreciate “the great outdoors” that is Minneapolis.

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Photo credit: michele-norris.com

 

 

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