Brainerd jobless rate drops to new low: Unemployment level hasn't been this low in 15 years

Brainerd recently hit a jobless rate it hasn't matched in 15 years.

The most recent county and city jobless data available from the state lists April numbers with Brainerd posting an unemployment rate of 5.2 percent. The last time the city reached that mark was in October of 2001.

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Lakes area April jobless rates

County/city Labor force Jobless rate percentage Unemployed

Aitkin 6,823 7.2 493

Cass 13,797 7.3 1,007

Crow Wing 31,465 5.2 1,649

Mille Lacs 13,066 6.3 821

Morrison 17,871 5.5 991

Todd 13098 4.7 621

Wadena 6,413 6.1 392

Brainerd 6,188 5.2 322

Source: Minnesota Department of Employment and Economic Development.

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During the summer and fall of 2001, Brainerd's unemployment level was in a range between 5.1 percent to 5.6 percent. In 2000, it was even lower-dropping down into the 4 percent range for seven months of the year. In 2000 and 2001, the city's highest jobless rate topped out at 9 percent. Years later even reaching an unemployment level as low as 9 percent seemed an insurmountable struggle.

In the early years of the 2000s, double-digit unemployment was largely reserved for winter months. That was part and parcel of an economy still working from a seasonal base with resorts and other businesses depending on tourism gaining greatest economic traction in the summer. The bustling lakes area, with strong numbers in terms of construction projects and jobs was continuing to enjoy low unemployment into the 2000s. From April 2004 to December of 2006, there were only three months where the jobless rate was 10 percent or higher.

But all that changed when the Great Recession began in December of 2007. It became the longest and deepest recession since the Great Depression of the 1930s. By 2009 and 2010, Brainerd's jobless rate rose to 20 percent. Double-digit unemployment became the norm. For 46 months, Brainerd's unemployment rate was above 10 percent-and in some cases well above-with at least 10 months close to or reaching the 20 percent rate.

Brainerd was often at the top of the list for the highest jobless rate among Minnesota's largest cities, with populations of 10,000 people or more. The jobless rate is taken from the Brainerd zip code. The lakes area's own twin cities make for a different scenario than many in the state. In other parts of the state, Brainerd's and Baxter's numbers for jobs and jobless wouldn't be separated by city borders. Instead they share a border within the west end of the Herberger's store in the Westgate Mall.

A changing tide

As recently as 2013, every month of the year-save one-was still in double-digit unemployment in Brainerd. But the tide began to turn in the spring and summer of 2014. The jobless rate dropped from 11.4 percent to 8 percent that spring and stayed below 10 percent until December of that year. The winter of 2015 was back to a higher number of people without jobs in the area, ranging from 11 percent to 13.1 percent that winter. But by April, numbers were already dropping.

During the winter of 2014-2015, there were four months with double-digit unemployment levels. By the winter of 2015-2016, that number was chiseled down to a single month. December of 2015 rose to 11 percent for a jobless rate. It dropped down to 6.3 percent by January of this year. Four months later, it was down to 5.2 percent.

Even at this low number, Brainerd still has a larger number of its labor force unemployed than other areas of the state. Across the state's largest cities, the April jobless rate was about 3 percent in the majority of cities.

A recent annual update on The State of Manufacturing, a comprehensive survey of manufacturers in Minnesota, listed attracting and retaining qualified workers as a top concern. "The lack-of-applicants challenge was markedly higher among greater Minnesota companies while needed skills ranked equally between metro and greater Minnesota companies," the survey reported.

Only two cities in the state were in the 5 percent range for April, Brainerd and Cloquet, with both posting 5.2 percent. Bemidji, which often alternated spots with Brainerd for the dubious crown of having the highest unemployment rate, was down to 3.4 percent in April.

Hibbing led the state's large cities for the highest number of jobless at 7.9 percent, followed by Virginia at 7.7 percent.

There are 15 micropolitan areas in the state, of which Brainerd is one. The Brainerd Micropolitan covers Cass and Crow Wing counties and provides a wider look at employment in the region.

For April, the Brainerd Micropolitan jobless rate was 5.9 percent, making it the highest of the 15. Bemidji's micropolitan was just behind at 5.4 percent. The rest of the state's micropolitans were in the 3-4 percent range.

Growing population

When looking at options for employers who want to grow and increase their labor pools, population projections are part of the equation.

The Minnesota Department of Employment and Economic Development developed a regional profile looking at the populations projections anticipated from the counties of Cass, Crow Wing, Morrison, Todd and Wadena, also known as Region Five.

The region is "projected to enjoy continued population growth in the next 20 years as well." Population projections from the Minnesota State Demographic Center, expect the region to gain about 13,000 net new residents from 2015 to 2035, a 7.5 percent increase. By comparison, DEED noted, the state of Minnesota is projected to grow 10.8 percent.

"However, much of this population growth is expected to be in the older age groups," DEED reported, adding the region is projected to add 16,225 people aged 65 years and over, a 43.7 percent increase.

"The region is also expected to gain about 5,000 people in the 25- to 44-year-old age group, as well as a corresponding increase of about 3,000 more school-aged children. In contrast, Region Five is expected to lose almost 12,000 people from 45 to 64 years of age-as the current baby boom generation moves through the population pyramid."

"According to data from DEED's Local Area Unemployment Statistics program, Region Five has experienced fluctuations in the size of the available labor force over the last 14 years in response to changing economic conditions," DEED reported. "During the recessions in both 2001 and 2007, workers flooded into the labor market to earn extra income; leading to a record number of available workers in the region in 2010. Since then, Region Five lost about 3,200 workers.

"Still, the region has over 3,500 more available workers now than in 2000, rising from 78,360 workers in 2000 to 81,873 workers in 2014. The state was also gaining workers over the past decade and a half, but at a steadier pace. As the economy has recovered, the labor market in the region has been getting tighter, with about 4,830 unemployed workers actively seeking work in 2014.

"Despite the region's projected population growth, applying current labor force participation rates to future population projections by age group, would lead to a drop in workforce numbers in Region Five over the next decade."

With hiring signs now a frequent sight in the lakes area, including signing bonuses, the labor market is likely to remain challenging in the reversal of fortune with a slow but finally visible economic recovery.

The labor force will see a significant shift over time, DEED reported, adding "with large gains in the number of workers aged 25 to 44 years and 65 years and over against huge declines in the number of workers aged 45 to 64 years. The region may lose about 6,000 workers in the 45 to 64 year old age group as the baby boom generation" exits the work force.

"This will likely lead to a tight labor market in the future as well, with employers needing to respond to the changing labor force availability in the region," DEED notes.

RENEE RICHARDSON, associate editor, may be reached at 218-855-5852 or renee.richardson@brainerddispatch.com . Follow on Twitter at www.twitter.com/Dispatchbizbuzz .