'This one is different': Iron Range slump comes without a U.S. recession

Author:
Publish date:
Image placeholder title

By the end of next month more than 1,100 mine workers on Minnesota's Iron Range will have lost their jobs in 2015.

Mining companies and steel producers say they plan to bring their facilities back to full strength when prices rebound and they've noted the cyclical nature of their industry.

But a Duluth News Tribune article points out that this downturn is different from others that have hit northeastern Minnesota: it comes as the U.S. economy is not in a recession, but is expanding.

The biggest cause of iron's plummeting price is a slowdown in China's once-voracious appetite for steel, the newspaper notes.

As MPR News reported last week, that slowdown has done more than reduce the global demand. Analysts say it's also led China – which subsidizes steel production – to illegally sell steel in the U.S. at below-market rates, in a practice known as dumping.

Gov. Mark Dayton and Lieutenant Gov. Tina Smith are among several political leaders who have visited the Range in recent days to meet with affected mine workers.

In his pep talk, Dayton pointed to the Iron Range's track record of bouncing back "stronger and better than ever" from previous downturns, Northland's News Center reports.

This embed is invalid

But the global nature of this slump in iron prices distinguishes it from those that were driven by U.S. recessions.

Northeastern Minnesota blogger Aaron Brown thinks steel dumping is an effect of low prices rather than a cause of them. Brown suspects the root issues behind this downturn are more complex.

Meanwhile, the mine workers are eager to hear that hiring will ramp up again.

One worker tells the Mesabi Daily News a U.S. Steel official said the backlog of taconite waiting to be used in steel mills is enough to last four months.

That has employees hoping to hear good news in early October, four months after the last of the cutbacks kick in on June 1.

Next Up

Related