Jobless? Unemployment is Dropping in Minneapolis and Buffalo
Experts Cite Lack of Migration, Less Reliance on Manufacturing for Drop
By HUSNA HAQ
May 1, 2010
Want to move to cities on the rebound? Eager to work in places that are adding jobs or seeing unemployment fall?
Minneapolis is one of only two metropolitan areas in the U.S. that experienced a significant fall in its unemployment rate over the past year. The region generally enjoys a better-than-average climate for jobs. (Getty Images)Then pack your bags for Minneapolis. Or Buffalo, N.Y.
Surprised? Don't be. Of the 49 large metro areas in the United States, these locales were the only places to see a year-over-year decline in their unemployment ratein March, the Bureau of Labor Statistics reported Wednesday.
Minneapolis-St.Paul-Bloomington saw its unemployment rate fall more than half a percentage point over the last year to stand at 7.8 percent. Buffalo-Niagara Falls experienced a 0.2 percentage-point drop and now stands at 8.6 percent. Both rates are lower than the 9.7 percent national average.
While their rebounds don't signal a revival of the Frost Belt, they do show how each area's unique characteristics, like lower rates of in-migration and less reliance on heavy manufacturing, have allowed them to emerge ahead of the rest of the country.
"This area doesn't leap up as much in good times and doesn't fall as badly in bad times," says Lawrence Southwick, professor emeritus of management science at the State University of New York at Buffalo. "We've become less subject to the national economy."
Indeed, Buffalo, once a steel and auto city dependent on the nation to buy its exports, has moved out of heavy manufacturing into growing sectors like health care and customer service. The metro area is also strong in sectors less prone to economic cycles, like insurance, basic chemicals, and banking operations' back-office work like data-checking and tech support.
"We're in a relatively unusual circumstance due to our job mix," says Mr. Southwick. "We boom less, but we also bust less."
It doesn't hurt that Buffalo's population has declined over the past several decades, he adds. "People who would otherwise be unemployed have moved out. That's one way to keep the unemployment rate down."
Unlike Buffalo, Minneapolis experienced the full brunt of the recession.
"The state entered recession earlier than the US as a whole," says Thomas Stinson, professor of applied economics at the University of Minnesota and state economist for Minnesota. "And I think what's happened is that Minnesota has moved out of the recession ahead of the US."
