Report: Operation Metro Surge Cost Minnesota Thousands Of Jobs In Hospitality, Construction

Operation Metro Surge may have cost the Minnesota economy thousands of jobs in January and February.

Federal employment data shows Minnesota lost 5,700 hospitality jobs and 4,400 construction jobs from December to February. The respective declines represent 2.1% and 3% of total statewide employment in those sectors.

North Star Policy Action, a left-leaning research outfit, noted the significant declines in a new report this week.  

“Today’s report reinforces what we already know: Operation Metro Surge caused serious and accumulating harm to Minnesota’s economy,” said Jake Schwitzer, North Star’s executive director, in a statement.

Minnesota’s unemployment rate was 4.5% in February, roughly on par with the national average of 4.4%, according to the Minnesota Department of Employment and Economic Development. Its labor force participation rate — the percentage of working-age adults who are working or actively seeking employment — is 67.9%, well above the national average of 62% and historically among the highest in the nation. And, Minnesota has added proportionally more jobs than the nation as a whole over the past 12 months.

But state data shows a rapid spike in unemployment coinciding with the arrival of thousands of federal agents in the Twin Cities late last year. Minnesota’s unemployment rate sat at 3.5% in December, a full percentage point below where it would be two months later. Such sharp, rapid increases in unemployment are rare outside major economic shocks like the onset of the COVID-19 pandemic, which temporarily erased hundreds of thousands of Minnesota jobs in March and April of 2020.

In a statement, DEED Commissioner Matt Varilek linked Minnesota’s soft jobs numbers with the federal law enforcement surge.

“February was a very challenging month for Minnesota communities due to the ICE presence, and that also contributed to it being a tough month for the state’s labor market,” Varilek said. 

North Star said the comparatively steep declines in industries that employ significant numbers of immigrants, such as food service and construction, strengthen the case that Operation Metro Surge had a chilling effect on the state’s economy.

The drop in construction employment marked “a real decline, concentrated in Minnesota, in an industry with deep ties to the immigrant workforce that Operation Metro Surge directly went after,” the report says. Federal agents have harassed or detained homebuilders repeatedly over the past several months, which business owners say has crimped the labor supply as the spring construction season ramps up. 

Research by North Star and others indicates the drop in headline employment figures is just one aspect of Operation Metro Surge’s economic toll. Aaron Rosenthal, a researcher with North Star, told the Reformer last month that early estimates — $106 million in lost wages across the Twin Cities, over $203 million in broader economic losses in Minneapolis alone — are based on rough math.

“It may be a long time before we have objective data that can really speak to the impact of what occurred,” he said.

State and local relief efforts have been widely criticized by immigrant, worker and renters’ rights groups as inadequate. They’ve also been stymied by politicians. 

Minneapolis Mayor Jacob Frey, for example, vetoed a measure last month that would have doubled the city’s required pre-eviction notice period from 30 to 60 days. The Minneapolis City Council is poised to pass a more lenient eviction-notice measure Thursday. The city has expanded emergency rental assistance, however. 

And at the Capitol, Republicans have repeatedly blocked relief bills, arguing that the Democratic-Farmer-Labor Party’s pro-immigrant policies were responsible for the fallout.