by Jan Saxhaug
January 2014
It's no secret that Mining is a critical industry to the economy of Northeastern Minnesota which is home to the Iron Range after all. Sitting atop vast deposits of iron ore and precious metals and strategically located near the Port of Duluth, the region has been able to develop the highly specialized infrastructure and workforce needed to take advantage of these rich natural resources. Just how specialized has Northeastern Minnesota's Mining industry become? One way to measure this is with a location quotient (LQ)-a measurement of an industry's concentration or specialization in a region relative to another region, the U.S. in this case. The LQ is simply the ratio of an industry's share of local employment to the industry's share of the national employment. Location quotients greater than one indicate a high concentration or specialization within a region. With a location quotient of 5.7, Northeast Minnesota's Mining sector is highly specialized, and Northeastern Minnesota has truly become a national leader in the Mining industry.
Mining is an industry that is highly sensitive to fluctuations in the business cycle. The sector was already in decline when the country slid into recession between March and November of 2001. According to QCEW data, 1,321 mining jobs were lost between 2000 and 2001. When the 2001 recession hit, the Mining sector lost an additional 427 jobs and continued losing jobs until 2004 when mining employment finally posted gains, growing by 68 jobs. In 2008 it appeared that the Mining sector was in the midst of a nice recovery with employment in the sector having grown to 3,925 jobs, but of course the country again slid into recession. This affected Mining sector employment numbers that plummeted to 3,048, the lowest levels of the past decade.
Since the recovery began in mid-2009, employment in the Mining sector has once again started to recover, growing at a rate of 48.9% between 2009 and 2012 and posting positive job growth every year during that period. By 2012 Mining sector employment in Northeast Minnesota had grown to 4,539 jobs, more mining jobs than at any time since 2000 (see Chart 1). Employment growth in the Mining sector has already outpaced DEED's 2010-2020 projections, which estimated that the sector would grow by 12.4% to 4,316 jobs by 2020.
The 4,539 mining jobs in Northeast Minnesota in 2012 represented about 3.2% of all employment in the region. However, the $393 million in mining sector wages that year represented a robust 7.3% of all wages paid. Clearly, with an average weekly wage of $1,666, the Mining sector is home to some of the highest paying jobs in the region, followed closely by Utilities ($1,632), Management of Companies and Enterprises ($1,318), and Professional, Scientific, and Technical Services ($1,080). Since 2009, total wages paid in the sector have increased by 91.6% from $205,098,802 to $392,971,418. The dramatic increase is tied in part to increased total employment numbers as well as a 31.2% increase in the average weekly wage (see Chart 1).
The Mining sector is home to a wide range of occupations, with the majority classified as Installation, Maintenance, and Repair Occupations, Transportation and Material Moving Occupations, Production Occupations, and Construction and Extraction Occupations. Across the board, occupations found in the Mining Sector pay more when compared to other industry sectors. The median wage for occupations in the Mining sector is, on average, 27.4% more than the median wage for the same occupations in other industries. The most notable difference is found in Office and Administrative Support Occupations which has an industry wide median wage of $14.89 per hour, while the same jobs when found in the Mining sector pay a median wage of $25.71 per hour, a difference of 72.7% (see Table 1). Other occupations with impressive differences include Transportation and Material Moving Occupations, with a median wage in the Mining sector of $28.34 per hour compared to $22.70 for all industries, a difference of 42.1%, and Production Occupations, which pays a median wage of $26.45 an hour in the Mining sector, 37.3% higher than the median production occupation wage for all industries.
| Table 1: Occupational Employment and Wages: Mining vs. All Industries | |||||
|---|---|---|---|---|---|
| SOC | Occupation | NE MN Mining Employment | Median Wage All Industries | Median Wage Mining | Percent Difference |
| 49-0000 | Installation, Maintenance, and Repair | 1,100 | $22.70 | $28.34 | 24.8% |
| 52-0000 | Transportation and Material Moving | 970 | $16.33 | $23.21 | 42.1% |
| 51-0000 | Production | 930 | $19.27 | $26.45 | 37.3% |
| 47-0000 | Construction and Extraction | 740 | $25.48 | $28.79 | 13.0% |
| 43-0000 | Office and Administrative Support | 350 | $14.89 | $25.71 | 72.7% |
| 17-0000 | Architecture and Engineers | 270 | $31.70 | $34.86 | 10.0% |
| 11-0000 | Management | 180 | $37.01 | $47.43 | 28.2% |
| 45-0000 | Farming, Fishing, and Forestry | 170 | $17.51 | $17.99 | 2.7% |
| 13-000 | Business and Financial Operations | 110 | $25.43 | $29.30 | 15.2% |
| 15-0000 | Computer and Mathematical | 10 | $28.11 | $33.73 | 20.0% |
| 29-0000 | Healthcare Practitioners and Technical | 10 | $29.50 | $39.79 | 34.9% |
| Source: DEED, Occupational Employment and Wages | |||||
As the previous data demonstrates, employment in the Mining sector has seen impressive growth in recent years and jobs in the sector pay very well, but are there any opportunities out there for current job seekers? According to DEED's Job Vacancy Survey data, there were 17 vacancies in the Mining sector in the second quarter of 2013, a job vacancy rate of 0.4%. This is well below the overall job vacancy rate of 3.8% and indicates that, as of mid-2013, mining employment was at or near maximum levels.
With that said, there are several projects in the region that are currently in various phases of approval and development that could impact Mining sector hiring in the future. Indian steel producer Essar is in the process of constructing an open pit mine and taconite plant near Nashwauk on the site of the old Butler Taconite plant which shut down in the 1980's. Canadian mine development company PolyMet is currently undergoing the supplemental environmental impact statement draft review process and could begin the permitting phase for its proposed copper and nickel mine at the old LTV plant near Aurora in the coming year. Additionally, Cliff's North Shore Mining recently announced it will be reopening two shuttered pellet production lines at its Silver Bay plant because of increased demand. If all of these projects go forward, it could have a significant impact on Mining sector employment in the coming years.
The Mining sector and key mining related occupations are projected to see significant growth in Northeastern Minnesota. According to DEED's employment projections, between 2010 and 2020 the Mining sector was projected to grow by 12.4% from 3,389 jobs in 2010 to 4,316 jobs in 2020. As previously mentioned, the Mining sector as a whole has already surpassed these projected growth numbers, and many mining related occupations have outpaced projections as well. Of the 17 occupations common to the Mining sector included in Table 2, seven have already surpassed projected 2020 employment levels, while several of the others are getting very close (see Table 2).
| Table 2: 2010-2020 Employment Outlook | |||||||
|---|---|---|---|---|---|---|---|
| SOC | Occupation | EDR3 Employment 2012 | Projected Employment 2020 | Percent Change 2010-2020 | Numeric Change 2010-2020 | Replacement Openings 2010-2020 | Total Openings 2010-2020 |
| 11-1021 | General and Operations Managers | 1,580 | 1,371 | 2.9% | 39 | 250 | 290 |
| Transportation, Storage, and Distribution Managers | 80 | 89 | 3.5% | 3 | 20 | 20 | |
| Managers, All Others | 420 | 824 | 12.1% | 89 | 160 | 250 | |
| 17-2071 | Electrical Engineers | 170 | 177 | 9.3% | 15 | 40 | 60 |
| 17-2081 | Environmental Engineers | 40 | 41 | 17.1% | 6 | 10 | 20 |
| 17-2112 | Industrial Engineers | 180 | 177 | 13.5% | 21 | 30 | 50 |
| 17-2141 | Mechanical Engineers | 200 | 182 | 16.7% | 26 | 50 | 80 |
| 17-2151 | Mining and Geological Engineers | 40 | 30 | 7.1% | 2 | 10 | 10 |
| 47-4023 | Construction Equipment Operators | 980 | 904 | 15.5% | 121 | 180 | 300 |
| 49-3042 | Mobile Heavy Equipment Mechanics | 900 | 688 | 12.6% | 77 | 160 | 240 |
| 49-9041 | Industrial Machinery Mechanics | 780 | 801 | 28.4% | 177 | 120 | 300 |
| 51-1011 | First-Line Supervisors of Production and Operating Workers | 520 | 619 | 4.9% | 29 | 80 | 110 |
| 51-4051 | Machinists | 310 | 353 | 14.6% | 45 | 60 | 100 |
| 51-4121 | Welders | 490 | 506 | 20.5% | 86 | 110 | 200 |
| 51-9021 | Crushing, Grinding, and Polishing Machine Setters, Operators, and Tenders | 160 | 187 | 10.0% | 17 | 50 | 70 |
| 51-9061 | Inspectors, Testers, Sorters, Samplers, and Weighers | 240 | 186 | 9.4% | 16 | 40 | 60 |
| 53-3032 | Truck Drivers, Heavy and Tractor Trailer | 1,730 | 2,227 | 19.1% | 357 | 370 | 730 |
| Source: DEED, 2010-2020 Employment Outlook, Occupational Employment and Wages | |||||||
For a region that is eager for high paying jobs, a healthy Mining sector is important to the Northeastern Minnesota economy. As Iron Range residents know all too well, Mining is susceptible to swings in the global economy, but since the Great Recession ended in 2009, times have been good. Mining sector employment has grown by 48.9% over the past four years, and wages have shown a similar upward swing. While current vacancies indicate that hiring may have peaked for the moment, new projects with the potential to come online in the coming years could lead to continued employment growth in the industry, and that would be welcome news.
