Tough times could mean difficult choices on the Iron Range

Last of a series on mining in Minnesota.

It's not surprising that a snapshot of the Iron Range economy from the state's Office of the Legislative Auditor shows a depressing picture.

Iron Range households earn less than families elsewhere in rural Minnesota, and much less than the median income of Twin Cities households. The job market has been dismal, too, with an unemployment rate that's at least 2 percentage points higher, at 7.3 percent, than in any other part of the state.

Yet this auditor's report wasn't looking at what's happening on the ground just since the start of the recent, terrible slump in iron mining. It looked back 15 years.

Since 2000, 14 of the 20 industry sectors in the region saw declines in employment. In only two of those 15 years did the slice of northeastern Minnesota that includes the Iron Range have a lower unemployment rate than the other rural areas of northern Minnesota.

By far the most sobering line in its report was this: "Northeast Minnesota faces a shrinking labor force, stagnant population growth, an aging population, low incomes and chronic unemployment."

And then the iron mining business went into the tank.

There was an economic crisis on the Iron Range long before the downturn in the iron mining business, which has led to plant idlings and mass layoffs over the past year. What the downturn has done is make the problems worse. Much worse.

It's true that iron mining provides only 8 percent of the jobs now, well off its taconite era peak 35 years ago, yet mining jobs generate 18 percent of the wages. The only other segment that's as big is health care and social assistance, although it's interesting that roughly the same pool of wages that 4,600 people split in mining gets split by more than twice as many workers in health care.

The iron mining optimists insist that it's got staying power here, but they also volunteer that the payroll is likely to be far smaller as the least-efficient steelmaking facilities among its customer base get taken out of service and the remaining taconite operations here strive to cut operating costs.

Even some good news on the Range — completion of a new facility for Essar Steel Minnesota — will contain the seeds of bad news. It's unknown yet whether the owner of this still-unfinished taconite project in Nashwauk can defy all expectations and come up with the money to complete it. And a perfectly sensible fear is that its production will only knock out a less-efficient Minnesota operation.

As for United States Steel Corp., it dropped this ominous-sounding line into an annual report it filed the last day of February with the Securities and Exchange Commission: "With reduced pricing for iron ore, management is considering its options with respect to the company's iron ore position in the United States."

The company declined to provide a fuller explanation, but it's reportedly shifting equipment from its idled Keetac operation in Keewatin to its larger Minntac operation in Mountain Iron.

With the layoffs and plant idling that have been going on, there has been renewed urgent talk of diversifying the economy away from mining. There's no reason to think, though, that renewed efforts to diversify will be more successful than they have been in the past.

One hope for job growth beyond iron mining, having at least one copper and nickel mine operating at the northeastern end of the Range, still seems more a hope than a plan.

One of the areas that look pretty stable is a job providing health care and other services as the population ages. But even those jobs could start to disappear when the inevitable happens, and that's when the number of people living on the Range really starts to decline.

That's the reality the region needs to face, although in the past several weeks of conversations, it was rare to hear anyone bring up the idea that Rangers will be pulling up stakes to move. One of the few to talk about that likelihood is Aaron Brown, a college instructor and writer from Hibbing now living near the half-built Essar plant.

He's actually an optimist for the quality of life in the region. One of the things that have to happen, though, is getting the people in charge of school districts and other public agencies to realize that tough choices will have to be made to preserve high-quality services for a shrinking population.

"We are in need of new long-range thinking," Brown said. "People here think about what will happen if you lose your job. But what happens if you lose your town, or at least the spirit of your town?"

The Iron Range region has been through periods before when many people did conclude there had to be a better opportunity somewhere else.

One of those times came after the brutal downturn in the 1980s that looks to old hands a little like what the steel industry is going through now. When taconite production volumes eventually recovered, there were fewer than half as many miners on the job.

That explains why the population of Hibbing in the heart of the Range peaked in the 1980 census at more than 21,000, then slid by nearly 15 percent by 1990. That decade saw net out-migration from St. Louis County of nearly 30,000 people, according to data collected by a program at the University of Wisconsin.

People were picking up and moving from elsewhere in the state then, too, as the iron mining slump roughly coincided with an agriculture recession that became known as the farm crisis. Among the places where the 1980s net migration out of the county exceeded 10 percent of the 1980 population was Martin County, the heartland of corn and soybean farming in southwestern Minnesota.

Maybe my mother saw the farm downturn coming. A couple of years before the worst of it hit, as I was packing for the three-hour drive from western Martin County back to a dorm room in St. Paul, she told me not to plan on returning home after college.

"There won't be anything here for you," she said.

I was stunned. Just as any Hibbing or Eveleth native will know how painful it is to leave the Range, I felt in my stomach what it would be like to leave a home I loved, from the field work to the starkly beautiful scenery provided by the summer thunderstorms.

Yet by the time I got to Mankato, I knew she was right.

lee.schafer@startribune.com • 612-673-4302