Commentary: Red Wing added just 309 jobs in decade

Two thousand three hundred eighty-four “new” jobs were created in Red Wing in the last decade. That’s what we’ve been told by the city and the Port Authority.

When I first heard of the report that said Red Wing ranked fourth in job growth in outstate Minnesota, with an incredible 2,384 new jobs created between 2000-2010, I was immediately skeptical: 2,384 new jobs, 22 percent job growth, really? How is it that a city with negligible population growth in the past decade could have that kind of job growth?

I was familiar with Red Wing’s employment and work force numbers, and this report simply didn’t match my sense of the Red Wing job market.

I wondered, was anyone else skeptical or even a tad curious about these jobs numbers; or about a housing agency issuing a jobs report? Wouldn’t that report arguably be outside the agency’s area of expertise?

Numbers didn't make sense

I don’t pretend to be an expert on the local economy, and we have local government employees and elected officials that are supposed to know these things, but I still expressed my skepticism to several local officials. Yet, the city and the Port Authority proudly posted the Minnesota Housing Finance Agency report, touting the “new” jobs numbers on their websites and Facebook pages.

Concluding that the city and port were not interested in examining the underlying data, I contacted MHFA, who explained that the jobs numbers in their report were derived from data collected by the Minnesota Department of Employment and Economic Development. I was directed to a person at DEED who explained that the workforce numbers I was familiar with basically measured employment of people living in Red Wing, whereas the numbers used in the MHFA report were a measurement of jobs in Red Wing, and I discovered there is a big difference.

The MHFA report used DEED Quarterly Census of Employment and Wages or QCEW jobs data. OK, but knowing that still didn’t give me the answer I sought. Where did the 2,384 “new” jobs come from?

Government spike

With DEED’s direction, I jumped online and dove into the QCEW numbers. I was soon to discover an explanation for these “new” jobs.

What immediately caught my attention was that local government jobs had more than doubled in the past decade. Narrowing my search, I found from fourth quarter 2007 to first quarter 2008, local government jobs had increased by 1,503 jobs. There was no way that local government jobs jumped from 1,116 to 2,619, in three months. Impossible!

I contacted DEED officials again to see if they could explain the increase. I was told that beginning in 2008, Welch was added to Red Wing’s jobs numbers. While DEED officials are prohibited from revealing the identity of employers, I was able to confirm my suspicion that the definition of “local government” includes tribal government.

If a tribe owns say a casino or a hotel, those jobs would all be categorized as “local government” and would not be included in any private employer categories. I knew then that of the 2,384 “new” jobs, 1,503 jobs were solely attributable to the addition of tribal government to the calculations.

I drilled down further into the numbers and found another significant change from 2007 to 2008. That was in the private sector labeled “Trade,Transportation and Utilities. From Q4 2007 to Q1 2008, 572 additional jobs were added. I assume this was solely due to the inclusion of the Xcel Prairie Island nuclear plant in the data. I found no other explanation.

So, of the 2,384 “new” jobs, 2,075 were due to an accounting shift that moved jobs from Welch into the Red Wing numbers. These were not “new” jobs in any sense, except new to the Red Wing jobs calculation.

Pulling those 2,075 jobs out of the data we’re then looking at 309 net new jobs added in Red Wing from 2000 through 2010. That number wouldn’t even get us into the top 20 of outstate cities.

Manufacturing

Manufacturing is by far the largest category of private sector jobs in Red Wing. Roughly 25 percent of current private sector jobs. There were 3,018 manufacturing jobs in Red Wing in Q4 2000. By Q1 2010, that number had dropped to 2,075 manufacturing jobs. A huge loss of nearly one-third of our manufacturing jobs.

Since Q1 2010, this sector has improved. Q4 2010 shows 2,555 manufacturing jobs. I assume much of that increase was largely due to BIC’s expansion. Still, a net loss of 463 manufacturing jobs during the past decade in spite of the expansion at BIC and other companies.

I’ve endeavored to be fair and accurate in my analysis of the employment data. My agenda in writing this commentary is an attempt to provide the public with a meaningful picture of Red Wing job growth over the past decade. At some point, hopefully in the near future, we’ll calculate the public’s cost in creating real “new” jobs in Red Wing, and measure the quality of those jobs being created.

Only with accurate, meaningful data can we can have an honest discussion about the cost, efficacy, and direction of local government economic development efforts. As the city and Port Authority move forward with developing future economic development plans, and in hiring a new Port Authority executive director, they need to be brutally honest in their assessments.

We deserve better than what we’ve been given. It’s our tax dollars being spent to retain and create new jobs.

In conclusion, I’d like to thank the great employees of DEED and MHFA for their assistance in helping us better understand the jobs data for Red Wing.

Kent D. Laugen

Red Wing

Tags: opinion, commentaries