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Why is Brainerd's jobless rate so high?

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news Brainerd, 56401
Brainerd MN 506 James St. / PO Box 974 56401

Two economic development professionals Thursday strived to explain why Brainerd’s unemployment rate is so high at the League of Women Voters of the Brainerd Lakes Area’s meeting. The city’s unemployment rate in December was 11.7 percent in November— the highest among Minnesota cities of 10,000 or more.

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Addressing the meeting at the Brainerd Public Library were Nate Dorr, regional analyst for the Department of Employment and Economic Development, and Sheila Haverkamp, executive director of the Brainerd Lakes Area Economic Development Corp.

The main factors, in the eyes of Nate Dorr, regional analyst, Minnesota Department of Employment and Economic Development, are the city’s affordable housing and the number of services that are more easily accessible in town.

“Mostly it’s the price of housing, proximity of services,” he said.

Dorr said Brainerd residents were affected much more by the Great Recession than residents of the county, state and U.S. He explained he unemployment numbers are derived from phone surveys of households. They are asked: are you 16 years or older?; are you able to work?; are you currently working?: and have you looked for work in the last four weeks?

He noted that while Brainerd’s population has remained stable or stagnant in recent years Baxter is growing rapidly. Baxter’s population has increased by 15 percent from 2004-2009 while Brainerd’s has increased 1.1 percent during that period. The difference in the increased percentages is attributable to Baxter’s smaller population.

“When small numbers go up it seems really dramatic,” he said.

Brainerd, he said, has lower property values and housing values than Baxter and Unorganized Territory. Residents with lower skills and no technical education often live in lower income housing.

He also said the Brainerd area was particularly hard hit by the decline of the construction industry. Consequently business also dropped for businesses that sold watercraft and other recreational vehicles, Dorr said.

The good news, Dorr stated, is that the recession is technically over. He said the economy suffers through recessions (of varying severity) once every 10 or 12 years.

“Consumer confidence is slowly coming back,” he said. “The job market is slowly coming back.”

Crow Wing County unemployment claims, Dorr said, are down 32.7 percent compared with two years ago and now total 3,060.

“That’s another sign things are getting better,”

One growth sector in the Brainerd area, Dorr said, was health care. The demand for orthopedic surgeons is growing as the area’s population ages.

Haverkamp said Brainerd continues to have the highest unemployment numbers for cities with population of 10,000 or more, but when the numbers are studied as whole and included with Cass and Crow Wing County numbers “we’re basically average.” Brainerd, she said, was a pocket or neighborhood of high unemployment in the larger region. She explained that her organization, established in the 1980s, was designed to help new start-up businesses in the area, help existing businesses grow and attract new businesses to the area.

In Crow Wing County, the owner-occupied housing rate is 77.5 percent, slightly higher than the statewide average of 74.9 percent, she said.

Among BLAEDC’s initiatives are attempts to engage a number of business executives who now make the Brainerd lakes area their home; and developing the work force’s skills.

“Economic development happens by all of us working together,” Haverkamp said.

Trudi Amundson, a business services analyst with the Minnesota Department of Employment and Economic Development, said when workers earn a National Career Readiness Certificate it demonstrates the area has a skilled work force ready to go to work. The certificate is obtained by demonstrating proficiency at reading and comprehension, applied mathematics and locating information. Amundson said it can be used as a hiring tool, used internally by businesses or used as an incentive.

MIKE O’ROURKE may be reached at 855-5860 or mike.orourke@brainerddispatch.com.

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