When good data goes bad

For the last nine years, I’ve had the fun of putting together the Minnesota Nonprofit Economy Report for the Minnesota Council of Nonprofits (MCN). This unique report uses state-collected data on nonprofit employers, employment, wages and finances and analyzes it six ways to Sunday. As much as I love pouring over this data, I always struggle when it comes time to release the information – the key talking point is basically the same every year. Nonprofit employment in Minnesota is growing…and that’s even held true when government and for-profit employment was declining.

For example, the most recent report used data from 2007. We found that the number of nonprofit employers in Minnesota declined slightly, but the nonprofit workforce increased by 4% – the strongest growth the sector has seen since the late 1990s.

But I think things are about to get interesting.

Late last year, we learned that several of the state’s major health care providers will be laying off staff and closing clinics. That’s serious news for the nonprofit sector, where two-thirds of employment is in the health care industry; health care has largely been responsible for the growth we keep seeing in the nonprofit sector. MCN also did a survey of member organizations in early December and found the recession’s impact on the sector has been “atypically quick and sharp.”

Ok, so we lose a few nonprofit jobs, will it really matter? Yes. To quote my report, “Nonprofit organizations play a vital – and often unrecognized – role in Minnesota’s economy.” In 2007, nonprofits employed 1 out of every 10 workers in the state and paid $12 billion in wages in 2007.  And these jobs usually pay a decent wage. These aren’t jobs we can afford to lose. (And don’t forget we also can’t afford to lose the services these workers are providing!)

Things are not looking so rosy for the nonprofit sector – and that’s before policymakers even begin to start balancing the state’s $4.8 billion budget deficit. So, if you hear policymakers talk about cutting things like health care, services for people with disabilities, child care, youth employment, housing…and the list goes on and on…don’t forget that also means even more job cuts in the nonprofit sector. And as many are saying these days, we need to be creating jobs, not eliminating them.

-Christina Wessel

About Christina Wessel

Christina served as the Minnesota Budget Project's deputy director until January 2014.
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One Response to When good data goes bad

  1. Rich Sherer says:

    Health Care Funding is also supporting by Federal matching consequently State of Minnesota funding cuts would also reduce matching Federal dollars compounding our already short funded health care industry. Say the State made rebalancing cuts of 5%, this could result in a 10% cut to the providers of health care.

    In many cases these providers are Nonprofit entities and this cut would result in additional heavy losses to the provider that would need to be corrected by a merger with another nonprofit provider or wage cuts ( the primary cost in the health care industry ) to avoid the risk of going out of business. Wage cuts maybe necessary but not be a good option, as the Health care provider industry already has a 45% average turnover in direct care and consequently wage cuts would complicate the industry’s already serious retention problem.

    Accross the state cuts in Department of Human Services funding has been estimated to impact over 45,000 employees, consequently state income tax revenue would also be reduced.

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