Unemployment report provides early campaign fodder

Gov. Tim Pawlenty
Rather than releasing the figures in typical news release fashion, Pawlenty personally shared them with reporters in a press conference. "This is not just a minor change in the unemployment number," said Pawlenty, a Republican seeking a second term this fall. "It's a five-year low and it represents a significant change."
MPR Photo/Laura McCallum

The debate over the state of the state has begun. Over the weekend, DFLers at their state party convention said the state is on the wrong track. They blame Republican Gov. Tim Pawlenty. Pawlenty made the case for a dramatically different view of the state when he took the podium to announce the state's encouraging financial numbers.

Pawlenty said the state was taking in more tax revenue than expected and that the state's unemployment rate dropped to its lowest level in five years last month. The unemployment numbers are usually announced only in a news release from a state agency, but Pawlenty took the unusual step of touting them at a news conference. He says the state's unemployment rate dropped from 4.1 percent in April to 3.7 percent in May.

"This is really good news," he said. "It will be one of the lower unemployment rates in the entire nation and we think it reflects an improving economic situation and job market with the number of increasing jobs in our state."

But the jobless rate declined primarily because people gave up trying to find a job, not because people found work. Steve Hine, research director for the Minnesota Department of Employment and Economic Development, says 2,500 people found work from April to May. But he says more than 9,000 stopped looking for work altogether during the same time period. He says that group is the bigger factor in last month's declining jobless rate.

"The number of unemployed people can diminish because unemployed people are finding work or because unemployed people are dropping out of the labor force. On the face of it, these numbers look like it's about a 3-to-1 ratio here in terms of labor force dropouts as opposed to those finding work," according to Hine.

Despite Hine's assessment, the Minnesota Republican Party and Pawlenty's campaign issued news releases touting the unemployment numbers as a signal of a strong economy. Pawlenty's campaign manager added that the state would have seen higher taxes and more spending if any of Pawlenty's rivals for governor had been in office over the past four years.

Mike Hatch, the DFL endorsed candidate for governor, shot back on Minnesota Public Radio's Midday program. He said Minnesotans saw higher property taxes, higher fees and a 75-cent charge for a pack of cigarettes during Pawlenty's first term.

"This kind of juggling of the books doesn't work. For him to try to claim that he hasn't raised taxes is crazy," Hatch said. "I don't intend to be raising taxes. I do intend to manage the state in a prudent manner. I intend to focus on the issues, I talked about. Education, health care, transportation and jobs."

Hatch and the slate of other DFL-endorsed candidates for statewide office criss-crossed the state to deliver a similar message in a fly-around following last weekend's endorsing convention. As the campaign continues, monthly economic reports are likely to produce monthly sparring between the parties over the state of the state.