15.7%: Brainerd leads cities over 10,000 in Minnesota with unemployment rate

Brainerd is atop a list few would want to even reach.

In April, the city posted a 20.2 percent unemployment rate, the Brainerd Lakes Area Development Corp. recently reported using information from the state Department of Employment and Economic Development.

"It's the highest in the state for a city over 10,000," Joshua Northey, BLADC project coordinator, said Monday.

By the numbers

Crow Wing County's population of 62,837 in 2007 is estimated to increase to 67,407 in 2012.

The county's per capita income was $19,174 in 2000, $24,673 in 2007 and is estimated to be $29,617 in 2012. The state's 2007 per capita income was $41,034.

The county's median household income was $37,604 in 2000, $47,379 in 2007 and estimated to be $56,838 in 2012.

Source: Brainerd Lakes Area Development Corp.

In May the number dropped slightly, considering seasonal employment gains, to 15.7 percent. It's still the highest in its population category, Northey said. With the 15.7 percent jobless rate, there are 1,214 people listed as unemployed from the labor force in Brainerd. The city first reached 21 percent unemployment in January and did not drop below 20 percent until May.

In comparison, May unemployment rates were 12.9 percent in Grand Rapids, 13.2 percent in Bemidji, 14.6 percent in Hibbing and 14.9 percent in Virginia. Brainerd is the only city in Crow Wing County with a population more than 10,000.

Northey said between January 2000 to November 2008, the highest unemployment rate for Brainerd was a mid-winter 13.5 percent. In April 2000, the unemployment rate in Brainerd was 4.8 percent. It rose to 11.5 percent in April of 2008.

With this challenging economy, it may be 2010 before people feel a comfort level in terms of jobs.

That's the conventional wisdom Sheila Haverkamp, Brainerd Lakes Area Development Corp. executive director, has been hearing. Even when the economy hits a plateau and starts back up, increases in jobs are expected to lag behind the financial recovery.

BLADC recently went through numbers about jobs, companies, wages and trends in data from 2000 to 2008. Some of the numbers provide an early indication of how the lakes area was faring with the recession that began in 2007, but more telling numbers are anticipated once 2009 is history and area layoffs and business closures are documented.

"I do expect to see some economic declines," Haverkamp said.

For Haverkamp, one of the notable facts in the report was an increase in manufacturing companies while there was a decrease in manufacturing jobs.

Between 2000 and 2008, manufacturing in Crow Wing County decreased from 13.5 percent of the county's work force to 9.4 percent. The number of employees per manufacturer dropped from 31.2 to 20.5 during the first eight years of the decade. During that same time, the number of manufacturers in the county rose from 111 to 131.

Haverkamp listed other notable trends between 2000-2008:

• The 10.6 percent employment growth in Crow Wing County "strongly outperformed" Minnesota's 2.6 percent. Low wages and slow wage growth likely contributed to the county's performance versus the state's employment rate.

• Crow Wing County weekly wages fell from 74 percent of the state average to 67.9 percent. The weekly wage in Minnesota was $881 in 2008 and $598 in Crow Wing County.

• Wage growth in the county was insufficient to keep up with U.S. inflation, which was 29.3 percent.

A surprising statistic may come from 2006 numbers that looked at where workers in Crow Wing County live. Brainerd accounted for 24.3 percent, Baxter 19.8 percent, 18.6 percent from within the county and 23.4 percent from residents who live in other counties.

This year, BLADC reports working with 26 potential projects, including 11 startups and 10 business retentions and expansions and five opportunities for call centers or a data center here.

The business development projects include a handful of manufacturers. BLADC lists success stories for the first quarter of 2009 with job creation and redevelopment projects such as Jimmy John's restaurant with 20 anticipated jobs, Wausau Paper's 16 new jobs and Tek-Car Metals Corp. with 12 jobs among other projects.

More projects are in the works for the second quarter, including three startup companies.

Haverkamp said the lakes area is not where it wants to be in terms of wages. While low wages may attract business, she said in the long run it hurts overall as employees are less able to buy goods. But Haverkamp said, in the meantime, wage information may help bring in more jobs.

"We'll use that information to hopefully attract new industry to our marketplace in months to come," she said.

RENEE RICHARDSON may be reached at renee.richardson@brainerddispatch.com or 855-5852.