in Q/A DEED Commissioner Singles out Duluthbecause of the Antofagasta position.
About the commish from the DEED website:
"Dan McElroy is commissioner of the Minnesota Department of Employment and Economic Development (DEED), which supports the economic success of Minnesota's individuals, businesses and communities.
McElroy joined Governor Pawlenty's leadership team in 2003 as commissioner of the Minnesota Department of Finance, where he was architect of the budget which addressed a $4.56 billion budget deficit without raising taxes. He later served as the Governor's chief of staff before becoming the Governor's senior advisor on innovation in 2005.
Prior to his appointments, McElroy served in the Minnesota House of Representatives from 1995 to 2003. During that time, he was an assistant majority leader, chair of the Committee on Jobs and Economic Development Finance, and chair of the Legislative Audit Commission. "
Q & A with DEED Commissioner Dan McElroy
Dan McElroy, Commissioner of the Minnesota Department of Employment and Economic Development (DEED), said he is optimistic about job growth in the Minnesota economy in the long run.
The Commissioner met with members of the ECM Publishers Editorial Board recently and here are some of his answers to the board’s questions.
Q: What do you think the state’s unemployment rate will be by the end of the year?
A: I’ll be happy if the December rate is between 6.7 and 6.9 percent and if a year from now it will be 5.9 or 6. This year I expect it will go up a couple of times as more people are recorded looking for work. Right now there are seven to eight people applying for every identified job. I should note that our work force participation rate is the highest in the country. While the national is 64 percent we are at 72.2 percent tied with North Dakota. .
Q: What is the state’s unemployment rate now?
A: In December it was 7.4 percent, with the highest in Mille Lacs and Kanabec counties at 13.5 percent and lowest in Clay County at 3.5 percent. This week we announced that the rate has dropped to 7.3 percent. The northern and northeast counties got clobbered by loss of manufacturing building materials. We do see the mining companies coming back. Manufacturing and construction are both down.
Q: We hear about the new normal. What do you think that rate will be?
A: I think the high fours will be the new normal in Minnesota. During the last 20 years our lowest rate had been 3.9 percent. On a national basis, economists are saying the rate will be in the 9s and 10s this year and next year. In December, we were 2.6 percent below the national rate and have been below since 1994. For the first time since 1976, our rate has been higher than the national rate in 2007 and 2009. Our highest unemployment rate in this recession was 8.4 percent in June of 2009.
Q: What are the reasons for your optimism on future job growth?
A: An indicator is the employee work week. The hours have gone from 31.2 hours in September to 32.6 hours in December. One extra hour at $15 an hour can make a big difference in this economy. The manufacturing work week in December was up to 40 hours. We have more people looking for jobs. We’ve had an online job bank since 2007. In the summer of 2007 going into 2008 we had 8,000 job listings. They started to go up in November and at the end of December we had 16,000 listings, in January, 21,000 and last week we had 32,000.
Q: How are jobs created and how do you propose long term to grow the economy in Minnesota?
A: Obviously the private sector plays the largest role. Of 2.7 million jobs in Minnesota, almost 2.4 million are private sector. The short answer is we compete for them by having a high quality and productive work force, well-educated work force, a business climate that’s competitive, having access to markets to transportation and staying competitive. Minnesota leads the nation in per capita fortune 500 company headquarters with 19, second to Connecticut and with Fortune 1,000 at 32 companies second to Missouri. Of the 500 fastest growing companies we have 115, which I think is important because they are the farm systems of the future.
Q: What is your agency doing to help?
A: Almost everything we do is with partners: economic development commissions, regional initiatives, the Metropolitan Council and port authorities. We help Minnesota companies stay here. Very quietly Minnesota Mining and Manufacturing has made major investments in three of its biggest manufacturing facilities. The best example is the sandpaper plant in Alexandria that went up from 350 to 400 employees. It is likely to be their flagship sandpaper plant for years to come. We also help improve the skills of employees. We assist in starting and growing business, we run three small business development centers that helped 3,600 businesses last year. We have a small business help center where 40,000 phone calls were handled last year.
Q: What about new businesses?
A: The Secretary of State listed a report of a record start of new businesses in 2009. About 61,000 new businesses were started in Minnesota. Small business is where the jobs are. .
Q: What kind of new businesses are you attracting?
A: The largest industrial investment in Minnesota is under way in Nashwauk by a company from India, originally investing $2 billion to built the first mine-to-metal complex , resulting in 700 permanent jobs and 2,000 construction jobs. .
Production of Mesabi Nuggets in Hoyt Lakes has started, a joint venture company with Japan and an Indiana company, with a $245 million investment concept in direct reduced iron. The plant will produce iron pellets that contain 97 percent iron which can be fed directly into electric arc furnaces. <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<>>>>>>>>>>
The largest manganese deposit in the world has been discovered in Crow Wing County. Mining is a big deal.
Q: What other businesses are you attracting?
A: The health and medical devices is an amazing niche in the state. Nestle Nutrition has moved its headquarters to St. Louis Park. A Danish medical device company has chosen Minnesota for its North American headquarters.
Q: What about business expansions?
A: There were 200 business expansion of some sort last year. Westinghouse NuCrane has chosen Minnesota in Hutchinson to make cranes for a nuclear reactor. The biggest of four announcements in the last 10 days has been the Wassau paper company choosing Minnesota for a $27 million paper mill expansion.
Q: Would you comment on the tax climate?
A: Minnesota ranks 12 to 15th in business climates in the polls. It is 47th or 48th in tax climate. The governor has proposed we reduce the C-Corporation rate by 20 percent, a tax credit for early stage angel investors of 25 percent, a credit for insurance companies to encourage them to create pools of money for companies to invest in Minnesota and the extension of the research investment tax credit.