In Duluth, economic recovery is stalled by uncertainty

DULUTH – On paper, the economic pain from the pandemic is clear here — jobless rates were the highest on record in the region this spring and remain among the highest in the state, with Black, Indigenous and people of color most affected.

The healing is just beginning.

"A lot of folks have been waiting to see what is going to happen," said Elena Foshay, the director of workforce development for the city of Duluth. Still she is hopeful "that waiting is coming to an end."

Uncertainty over the virus and its impact on schools, child care and guarantees a job will still be there in a few months have kept an economic recovery elusive in the state's second-largest metro area.

In July Duluth had an 8% unemployment rate, down from an 11.7% peak in April — higher than at any point during the last recession a decade ago or at any time since the start of state records in 1990.

Northeast Minnesota as a whole was tied with the Twin Cities metro area for the highest unemployment rate in the state last month at 8.4%.

Among cities, Hibbing had Minnesota's highest unemployment rate at 11.8% in July, but with most taconite mines returning to full production the August, the rate will likely improve.

Duluth has seen waves of layoffs at a variety of industries, including a paper mill, an aircraft maintenance base and hospitals. State-mandated closures and a subsequent late start to the tourism season also saw layoffs at many hotels, restaurants and bars.

Steve Grove, commissioner of the Minnesota Department of Employment and Economic Development (DEED), stopped in Duluth Wednesday on a listening tour to hear about the local economy from the people trying to prop it up. In a "slightly awkward hallway presentation," as he said to the small socially distanced crowd, Grove asked what more the state could do.

"We're not seeing job seekers fully engaging, not knowing what's next," said Art Larsen, a field operations manager with the Duluth DEED office, and he said the pipeline between job seekers and those who can help them needs to be reconnected.

In a now-familiar debate over keeping employees safe and restarting the economy, local workforce officials described the need to be available for people without access to technology while keeping COVID-19 from spreading. The Duluth CareerForce Center, once a bustling downtown hub of job seekers using computers, attending job fairs and going through training, has been closed since city buildings locked their doors due to the pandemic in March.

"We have people knocking on the door every day," said Betsy Hill, a job developer with the city.

People of color have the lowest rates of internet access, now a near mandatory part of finding a job, and the Duluth library remains closed as well.

Still, Foshay said some jobs are out there.

Many tourist-driven businesses say they are having a hard time finding enough workers because many college students have not moved back to the area, she said, and many other employers aren't finding workers with the right skills.

"There's a giant group of [unemployed] people, and a giant group of jobs," she said, especially at entry-level medical fields that require some training — which the city and state are eager to connect people with.

Residents of color have made up more than a third of those looking for help finding a job, Foshay said, though they are just 10% of the city's population.

The city has a working group with community advocates about how best to connect to those populations, with the hopes a grant can help implement some of those culturally specific ideas.

"We have a chance to rebuild things in a completely different way, so let's think about what that looks like," Foshay said. "How do we move those individuals out of poverty and into good-paying career-track jobs?"

Grove said the state is backing job-training efforts, especially through online classes, and has emergency loans to keep small businesses open and a new program to help new ones open. Grove stopped at India Palace on Wednesday, which would have gone under without a $30,000 emergency state loan.

"None of this is enough," he said. "Money is just part of the solution — it's about our culture and the system itself. If we don't try new things we're not going to get different results."

In that vein, as workforce offices remain closed, the city is hosting a drive-through job fair in the parking lot of Duluth's Wheeler Athletic Complex on Sept. 16 from 1-4 p.m. Superior hosts one the next day from noon to 4 p.m. at the Superior Public Library.