The ‘New Normal’ of the Minneapolis Economy

Today I delivered my annual State of the City speech. In short, my main message was this: In Minneapolis our economy is like the Twins—we’re playing on a whole new ball field. But just like in baseball, regardless of the field, the fundamentals remain the same.

The “fundamentals” I was referring to are the fundamentals of getting people back to work — which is an effort in which the City of Minneapolis has been very actively engaged for the last several years. These fundamentals are:

  • Investing in people
  • Investing in the common ground that helps everyone succeed
  • Focusing our efforts to help small business thrive
  • Fostering an innovation economy
  • Knowing when to help, and when to get out of the way 

I began my speech by talking about the tornado that hit South Minneapolis last August. I said that after we responded to the immediate aftermath, we started working together to get back to normal — but that getting back to normal really meant getting to a “new normal.” Then I talked the “economic tornado” that has hit Minneapolis and spoke about some of the steps that the City has taken to help people find work and get to a new normal. Our results include:

  • Since 2003, we have helped 11,000 adults find work and 11,000 youth find summer employment. We have an ambition goal this year of helping another 2,300 youth find summer jobs.
  • We have partnered with President Obama to put $7 million in economic-recovery funds to use to train people and place them in good jobs.
  • Since 2007, our Great Streets program has invested $3.7 million in small businesses, creating 400 jobs, retaining 125 jobs, creating tens of thousands of construction hours and leveraging millions more in private investment.
  • We partnered with Mayor Chris Coleman, the City of Saint Paul and the Blue Green Alliance in promoting opportunities to grow jobs in the Clean Energy Economy.
  • We cut red tape and regulation to help businesses grow and create jobs more quickly.
  • In 2009, we helped prevent nearly 500 foreclosures — which means that for an investment of around $25,000, the City helped prevent $30 million in costs to private lenders and the public (at approximately $70,000 per foreclosure). 

I know that nothing is easy now, but in Minneapolis we know what works — the fundamentals that Minneapolis has followed. In my speech I concluded — and firmly believe — that, in the uncharted territory of today’s economy, we don’t know what’s around the corner. But we do know this: We’re ready for it.

I made a few other announcements today:

  • In the context of the deep crisis of the State budget and in response to the governor’s proposed $29-million additional cut in LGA to Minneapolis, I will present a supplemental 2010 budget in April that, I have to say, won’t be pretty.
  • Despite the budget challenges that we face in Minneapolis, the City has been underinvesting in small business development. As I prepare the City’s 2011 budget, I will look for more consistent long-term community development funding.
  • This year has been a  terrible year for potholes, but it would have been even worse had we not implemented the Infrastructure Acceleration Program in 2008 to repair more streets faster.
  • On March 23, I will present recommendations to the City Council for proceeding with streetcar development, in light of the Obama administration’s new support for streetcars. 

Along the way, I highlighted some recent facts that offer encouragement about our results and the direction in which we’re headed:

  • Statistics released this week show that the unemployment rate in Minneapolis, at 6.8%, remains lower than the unemployment rate in the metro area as a whole, at 7.4%.
    • Nearly 5,000 more Minneapolis residents were working in January than were working one year ago, a 2.5% increase that surpasses the rate of increase in the metro area.
    • In addition, 428 more Minneapolis residents were working in January than in December — in contrast to job losses in January around the metro area and state.
  • Last week, Forbes Magazine ranked Minneapolis–Saint Paul the #4 metropolitan area in the country where the recession is easing (see here: http://www.forbes.com/2010/03/02/cities-recession-jobs-lifestyle-real-estate-housing.html).

These are just some quick highlights from my speech. If you’re interested in reading the full text of the address, please go here: http://www.ci.minneapolis.mn.us/mayor/speeches/speech-soc2010.asp.  Thanks as always for your interest in making Minneapolis the great city of our time.

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