Just days after Montana Gov. Brian Schweitzer issued his “Labor Day Report” that was cautiously optimistic about the state’s economy, the Federal Reserve struck the same tone in its regular government survey of the national one. But how this will trickle down into jobs for the hundreds of under- and unemployed in the Flathead is, so far, entirely unclear.
There is now growing evidence that the worst recession since the 1930s is over, and that the national economy is growing in the current quarter that ends in just a few weeks. It’s expected to be a modest gain of 3 to 4 percent, bolstered by the federally funded Cash for Clunkers program that offered incentives to new-car buyers. But many economists expect the recovery to be slower where it matters most.
There is a general consensus that the national unemployment level will break 10 percent before dropping, and the Montana Department of Labor and Industry points out that, based on past trends, a jobs recovery in this state could take even longer. That was the case in 1992. Then again, in 2001 we seemed to avoid the recession altogether.
Montana’s economy often has a mind of its own and it can – if looking solely at the numbers – seem disconnected from the rest of the country’s economic fortunes. Even now, the state Department of Labor boasts that our “economy has performed well during this period of economic downturn, with an unemployment rate much lower than the national rate.” That’s true, the national unemployment rate was 9.7 percent in August, a full three points higher than Montana’s. But in the same report that shows our state’s resilience, there are several references to the Flathead’s vulnerability:
“Within Montana’s borders, there are areas that have been battered by the national economic woes, particularly the northwestern portion of the state.”
What this recession has proven is that perhaps no other part of the state is actually affected by the national and world economies as the Flathead and surrounding area. What’s more striking than the lofty July unemployment numbers (9.1 percent in Flathead County) is the rate at which it increased. For example, Glacier County’s jobless rate (9.5 percent) is higher than ours, but it is just 2.4 percent above its five-year average for July. While the Flathead’s rate is 5.8 percent above the same average and, earlier this year, was an astounding 9.4 percent higher.
Remember two summers ago, when local fast-food restaurants were offering $10 an hour because they couldn’t find employees? Those days now feel like a distant memory. The question is when, and if, they will ever come back. According to the labor department, our economy was pummeled when three industries fell off a cliff at the same time.
“Construction employment has decreased 21 percent since the start of the recession, and employment in durable goods manufacturing (which includes wood products manufacturing) has declined by 11 percent. Real estate has also lost 9.8 percent of its employment since December 2007. Northwest Montana and the Bozeman area have above average concentrations of these three industries.”
Since the Flathead’s non-seasonally adjusted unemployment rate has actually been steadily falling – by 3.6 percent in four months, the case could be made that, since we are much more connected to the larger economy, we hit bottom faster and are already beginning to crawl out. But a case could also be made that the recent numbers are altogether misleading and don’t factor in those who are no longer counted on unemployment rolls or have left the area altogether.
Nonetheless, it’s becoming increasingly clear that, while Montana as a whole may not depend on the nation’s fortunes, the northwest portion of the state does. Now we can only hope that the country’s economy buoys ours as fast as it derailed it.