Recent data on unemployment insurance claims released by the U.S. Department of Labor show Minnesota’s increases are driven by layoffs in education.

In the week ending June 1, the largest initial unemployment insurance claims were in Minnesota (+2,788), followed by California (+1,974), Ohio (+1,692), and Pennsylvania (+1,566). For the week ending June 8, the largest initial claims were in California (+9,793), Minnesota (+4,397), Pennsylvania (+4,131), and Texas (+2,309).

Layoffs in the educational services industry are driving Minnesota’s claim increases, according to a state supplied comment on the department’s reports.

Source: U.S. Department of Labor
Source: U.S. Department of Labor

What is driving the layoffs?

Passed during the 2023 legislative session, the state now mandates that local school districts allow their seasonal hourly employees like bus drivers, janitors, and cooks to participate in the unemployment insurance program.

Additionally, with the expiration of federal COVID relief aid this September, school districts that used the one-time money to close pre-existing budget gaps and/or for long-term costs (adding new staff, teachers, etc.) are having to make significant budget changes, which include layoffs. For example, the Minneapolis Public Schools district added 400 jobs with relief funds and faces a structural budget deficit, relying on one-time funding to pay for ongoing expenses. In the Robbinsdale district, school leaders have predicted needing to cut $17 million to balance the books next year, which “can’t be accomplished without layoffs,” reported The 74.

“We misstepped,” the suburban news site CCX Media quoted [Robbinsdale school board member Kim] Holmes as saying. “This board misstepped, the administration misstepped. If we weren’t tracking historical decreased enrollment — and one of the biggest things they told us not to do with [COVID] dollars was hire positions — and we did it. So we have to come out and take some ownership.”

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