We’ve just posted the January edition of State of the Economy. This is a monthly publication that pulls together key economic developments both locally and nationally. It also includes the most recent data available about referrals made by United Way 2-1-1.

A few highlights from our most recent issue:

• Both local and national unemployment rates remained steady in January at 10% (U.S.) and 7.4% (MN) respectively.
• Lender-mediated home sales averaged $124,000 in the Twin Cities in 2009 compared to $204,000 for traditional home sales.
• The Twin Cities’ housing inventory is down 22% from a year ago.
• Teenagers are experiencing the highest unemployment rates nationally (27%) while women and Asians are experiencing some of the lowest rates (8%).
• Weekly wages declined 1.6% in 2009 when inflation is factored in.
• TCF is ending its “Totally Free Checking” program. More than 1,000,000 accounts that were previously free will be charged a monthly maintenance fee beginning early this year.
• Target Corp. is opening fewer than 10 new stores this year, but is renovating 340 stores already in operation.
• UnitedHealth Group reported fourth quarter profits up 30% and profits for the year up 28%.
• United Way 2-1-1 made nearly 175,000 referrals for basic needs in 2009. More than one-third of these were for either emergency food or emergency shelter.

For more news on the local and national economy, read the full report (including graphics!) here. 

What is the state of your economy? What one issue has had the most impact on you, your family, or your work in the past year? What do you think the State of the Economy will be next year at this time? Let me know, and I’ll post selections of the answers I receive.

The New York Times had a great article about food stamps a few days ago. I knew food stamp use was increasing. I may have even heard that it was at record highs. But I don’t think I realized that 1 in 4 children in the United States are now receiving food stamps. One in four. Wow.

One of the things the article stresses is that the stigma around food stamps has declined over the last few years and particularly in the last year, as more and more people are relying on food stamps after losing their jobs. Another thing that has helped is the move to plastic: Food stamps are now loaded onto little plastic cards (EBT cards), just like debit and credit cards, so their use isn’t as conspicuous. They even gave the program a snappier name—the Supplemental Nutrition Assistance Program (SNAP for short).

Minnesota is exactly average in terms of participation: Nationally, 66% of those eligible for food stamps are participating in the program (data are from 2007—the most recent available) and the same percentage of eligible people participate in Minnesota. Looking specifically at the working population, there are an estimated 179,000 working people in Minnesota whose income is so low they are still eligible for food stamps. Of those, only 56% are participating in the program (also the same as the national rate). For more detail on participation rates, check out the USDA Report: Reaching Those in Need.

One of the cool things about the New York Times article is the accompanying interactive graphic, which shows participation rates down to the county level. Looking at the data for the nine-county Greater Twin Cities United Way service area, Ramsey County stands out: 12% of the population is on food stamps, including nearly one-quarter (23%) of children. Hennepin County comes next, with 9% overall and 16% of children. But some of the biggest changes are seen in the outer counties: Carver County has seen an increase of 82% in food stamp use since 2007, and Scott County has seen a 70% increase. Increases were substantial in Isanti (58%) and Chisago (54%) counties as well.

If you’ve hit hard times and are wondering if you or someone you know might be eligible for food stamps (or other financial assistance programs), go to Bridge to Benefits and fill out the screening tool—after answering just a few questions, they will tell you what benefits you may be eligible for and provide contact information and links to applications.

The new unemployment numbers took a lot of people, including me, by surprise: Unemployment rose from 9.8% in September to 10.2% in October. It isn’t the increase that surprised me—all the economists have been saying the unemployment rate is going to continue its climb, even though the recession itself is likely over. Rather, it was the size of the increase. I had just finished my October State of the Economy the previous week, which included unemployment projections of 10% by December and a peak of 10.2% in February.

So I wonder if it’s peaking early, or if it’s going to peak a lot higher than has been forecast. Some of the more pessimistic economists (okay, one economist in this Wall Street Journal survey) are predicting 11% in June. Ten percent don’t think the unemployment rate will peak until the second half of 2010. Or later.

Unemployment has increased for virtually all demographic groups, but not all demographic groups are equally affected. Wondering who’s getting hit the hardest? Young people for sure. People of color more than whites. Men more than women. Want to know where you fit in the mix? Check out this interactive graphic developed by the New York Times—you can get unemployment rates by race, sex, age, and educational level—or any variation thereof. (I spent an embarrassing amount of time playing with the numbers: It’s grim and fascinating at the same time.)

There are also broader measures of unemployment (I’ve talked about this before). So if you include discouraged workers the unemployment rate goes up to 10.7%. And if you add in marginally attached and involuntary part-time workers, it goes up to 17.5%. That’s getting uncomfortably close to 1 in 5 workers.

Hunker down. The bumpy ride isn’t over yet….

Andrea Ferstan, our intrepid reporter impact manager in the area of homeless prevention, recently helped out with the Wilder Homeless Study count—interviewing people about the unfortunate circumstance they have found themselves in. (Every three years Wilder Research issues a report on homelessness in Minnesota, based on headcounts and interviews. This invaluable report gives us information about the causes, effects and circumstances surrounding homelessness, including specific subgroups such as youth, veterans, and older adults.) 

She was kind enough to answer a few questions about her experience.

LP: So what exactly did the evening entail? Where did you go? How many people did you talk to, did you work in pairs, and how long did it take? 

AF: I went to Mission Lodge, a transitional housing program in Plymouth. I arrived at 5:00 p.m.  There were eight of us available to interview residents, including Wilder staff who had been there since at least 1:00 p.m. Everyone serving as an interviewer for the study is asked to watch a training video, review the interviewing tool in advance, and conduct one practice interview. This training and preparation ultimately ensures the integrity and clarity of the data. Residents are encouraged to participate in the study and are paid $5 for their time upon completion of the interview. Each interview is done individually, one interviewee and one interviewer, taking approximately 30 minutes.

We were all at tables in the dining area. Mission Lodge staff encouraged residents to participate, noting that this information would help inform efforts to improve and expand housing and services for homeless people. Residents generally approached us if they were willing to participate. Due to the large number of interviewers and possibly the timing of our shift, I only had the opportunity to interview two individuals.

LP: How did it make you feel?

AF: I enjoyed the opportunity to hear directly from these individuals about their challenges and successes. What is always frustrating in these situations is the need to strictly follow the interview questions which can at times be challenging when someone may need or want to just share their story. Asking someone to share a great deal of personal information with you, a stranger, also feels a bit uncomfortable, even when one knows that this is for a worthwhile purpose. In the end, I just felt extremely grateful to those who took the time to open themselves up one more time with the hopes of creating more opportunities, and possibly a better system from which they and/or others can achieve and maintain greater housing stability.

LP: What surprised you?

I wouldn’t say anything surprised me, though I am continually amazed at the capacity of the human spirit to overcome seemingly insurmountable adversities, particularly when there are people and resources that can serve as a hand up.

LP: What were you hoping that you wouldn’t see that you did?

One father noted that while he had temporary housing, his son could not stay with him, something which we know results in unaccompanied homeless youth.

LP: Do you think you’ll do it again three years from now?

Absolutely.

Some economists are heralding the end of the recession, but I’m not taking out my party hat yet. 

Nationally, the unemployment rate stands at 9.4%, but if you add in discouraged workers and involuntary part-time workers, it’s 16.3%—a slight improvement from the 16.5% we saw in June, but still abysmal. And economists are still predicting high unemployment—averaging about 9.8%—throughout 2010.

While the Minnesota unemployment rate dropped to 8.1% in July, we’ve got our own bad news to deal with. The recent job vacancy survey conducted by DEED found that there are now 7.7 unemployed workers for each job vacancy in the state. (This is up from 5.6 unemployed workers per job vacancy six months ago, and if you go back far enough—see left side of graphic below—you can see that in the early part of this decade there were actually more jobs than there were job seekers!)

But the story gets worse (I think I will have to put something fun and silly at the end of this post, to balance out all this bleakness): Six months ago, the median wage (half pay more, half pay less) for open jobs was $11/hour. That has fallen to $10/hour. Yikes! That means that half the people that get jobs in Minnesota will make less than $21,000 a year if they work full time. But the chances are good that they won’t, because 41% of the jobs available are part time.

On a Lighter Note

Did you know there is a part of the brain called Area 37? I had no idea. I learned this in Proust and the Squid: The Story and Science of the Reading Brain. (Read my other entry about Proust and the Squid.)

It’s for object recognition.

Area 37. Doesn’t that sound like something you’d find in The X Files or House of Leaves?

Kind of creepy.