Luke Greiner and Mark Schultz
September 2021
Spanning over 200 miles from the northwest corner of Big Stone County to the southeast corner of Faribault County, the 23-county Southwest Planning region is a large area where broad trends don't always fit the local experience. This spotlight article aims to provide a summary of recent employment trends in the region and provide local leaders with a bit of context to gauge how their county has fared in the past two years.
The most recent employment data cover the first quarter of 2021, so our comparisons are made to the first quarter of 2019, keeping the time of year constant to avoid seasonal variations in the data. Because of the pandemic recession, 20 of the 23 counties in Southwest Minnesota saw employment declines from the first quarter of 2019 to the first quarter of 2021, with only Rock, Cottonwood, and Watonwan counties gaining jobs. Although most of the region saw decline, it's important to note that only seven counties in the entire state grew employment over this period, making Southwest Minnesota remarkable to account for almost half (see Figure 1).
Cottonwood County grew nearly 11% over the two year period, followed by Rock County, which expanded 5.4%, making them two of the fastest growing counties in the entire state during the recession. Watonwan County saw an increase in 2020, then dropped back to 2019 job levels in 2021, showing a small 0.3% job increase. The largest employment declines in the region were recorded in Lincoln (-10.7%), Pipestone (-9.1%), Yellow Medicine (-8.6%), Sibley (-8.3%), and Chippewa (-8%) Counties.
The region remains 5% below pre-pandemic employment levels, still needing to claw back 8,607 jobs to reach 2019 employment numbers. Of the six planning regions, Northwest (-2.9%), Southeast (-4.2%), and Central (-4.4%) have recovered faster than Southwest Minnesota.
The good news for residents of Southwest Minnesota is that employers posted the second largest number of job openings in the 4th quarter since DEED's Job Vacancy Survey began 20 years ago. With a tight labor market, this puts leverage in the hands of employees. The lack of labor force growth has, however, plagued the region since the Great Recession and the most recent pandemic caused a mass exodus of labor that could have long-term negative impacts on job growth in the region. Employers cannot create jobs if no one is available or willing to do the work as offered.
From the first quarter of 2019 to 2021 Southwest Minnesota's labor force is down by more than 7,300 workers. Fortunately, the decline amounts to only about 3.4% of the current labor force, but it's still another move in the wrong direction in a region that continues to struggle with labor force and population growth in most communities.
Four counties - Cottonwood, Rock, Nobles, and Redwood - managed to grow their labor force from the first quarter of 2019 to 2021. On the other hand, Pipestone (-12.8%), Lincoln (-9.1%), Swift (-7.7%), and Lyon County (-7.6%) all suffered larger declines in labor (see Figure 2).
Without pulling workers who exited in the past year and a half back into the labor force, the task of employment recovery will be considerably more difficult. However, each community and county is unique, and while some communities struggle, others are thriving. Brief summaries of each county provide more insight to the unique economic environments across Southwest Minnesota.
Big Stone County was home to 1,590 jobs in the first quarter of 2021, down 25 jobs from the 1,615 jobs that were seen in the county in the first quarter of 2019. This equaled a drop in jobs of 1.5%. This was also the smallest numeric decline experienced by any county in the Southwest region. The largest numeric job losses were experienced in the Public Administration (-11) and Accommodation and Food Services (-10) industry sectors, while Accommodation and Food Services also saw the largest percent loss at 13.5%. On the other hand, Wholesale Trade saw the largest numeric increase in jobs with 13 more jobs in the first quarter of 2021 than were seen in the first quarter of 2019. Despite experiencing overall job loss, Big Stone County experienced an increase in the number of employing firms, which jumped from 203 firms in the first quarter of 2019 to 213 establishments in the first quarter of 2021 for a jump of 10 establishments.
Blue Earth County experienced a loss of just over 2,300 jobs from the first quarter of 2019 to the first quarter of 2021 for a loss of 5.8%. This was by far the largest numeric loss of jobs of all 23 counties in the Southwest Planning Region. Accommodation and Food Services saw the largest decrease in jobs, losing 674 jobs during this time frame for a drop of 16.9%. Other notable job losses occurred in Health Care and Social Assistance and Arts, Entertainment, and Recreation, both of which lost over 300 jobs. Arts, Entertainment, and Recreation also saw the largest percent decrease with a drop of 50%. On the other end of the spectrum Finance and Insurance experienced the largest numeric growth with the addition of 180 jobs or growth of 19.5%. Blue Earth County also saw an increase in the number of firms with a jump of 78 employing establishments.
Brown County saw job contraction to the tune of 948 fewer jobs for a decline of 7% from the first quarter of 2019 to the first quarter of 2021, the second highest numeric loss of all the counties in the region. The county saw an increase in the number of employing establishments equaling 50 additional firms for a jump of 6.2%. The Manufacturing industry sector saw the largest numeric decline in jobs, decreasing by 11.3% for a loss of 303 jobs. Accommodation and Food Services and Transportation and Warehousing saw the next largest job declines, losing 209 and 106 jobs, respectively. The largest percent decline was in Real Estate and Rental and Leasing, which dropped by 33.9%. Only one industry sector saw an increase in the number of jobs and that was Finance and Insurance, which expanded by seven jobs from the first quarter of 2019 to the first quarter of 2021.
Chippewa County saw over 450 lost jobs for a decline of 8% during this time frame. The largest numeric decrease in jobs was seen in the Manufacturing sector, which lost just over 200 jobs between the first quarters of 2019 and 2021. This loss was supplemented by additional job losses in Accommodation and Food Services (-70 or 20.3%) and Wholesale Trade (-68 or 19.3%). The largest percent decline in jobs was seen in Information, which dropped by 30.8%. Accompanying the loss of jobs experienced, Chippewa County was also the only county in the entire region to see a decline in the number of firms with a loss of three establishments.
Cottonwood County was one of only three counties in the region to experience an increase in jobs during this two-year time frame. Across all industries, the number of jobs in the county swelled by 545 for a jump of 10.9%, which was the second highest numeric gain and second fastest percent increase of all 87 counties in the state. This overall increase was mostly fueled by job gains in the Manufacturing sector, which increased by 577 jobs for an increase of 43.1%. Smaller, yet still notable gains were also seen in Administrative Support and Waste Management and Remediation Services, which grew by 53 jobs, and Construction which jumped by 38 jobs. Job losses were experienced in four industry sectors, including a loss of 89 jobs in Wholesale Trade (which was also the highest percent decline at -24.9%) and 31 fewer jobs seen in Finance and Insurance. Cottonwood County also experienced a gain in establishments, jumping from 390 in the first quarter of 2019 to 437 in the first quarter of 2021.
Faribault County saw a modest 4.2% decline in jobs, equaling a loss of 180 jobs during this time. Almost half of the total lost jobs was caused by a drop of 85 jobs in the Manufacturing industry sector, which equaled a decline of 8.7%. Retail Trade also saw a sizable decrease in jobs after losing 54 jobs (13.4%). On the flip side, four industry sectors saw an increase in the number of jobs in the county, led by a gain of 34 jobs in Wholesale Trade and followed by gains of 11 and 10 jobs in Professional, Scientific and Technical Services and Agriculture, Forestry, Fishing, and Hunting. The largest percent decline was seen in Retail Trade while the highest percent increase was seen in Professional, Scientific, and Technical Services (23.4%). The county also saw an increase in the number of employing establishments with an increase of 29 firms.
Jackson County reported 317 fewer jobs in the first quarter of 2021 compared to the first quarter of 2019, a drop of 6.2%. Despite the job loss, the number of establishments increased by 30. Manufacturing experienced the largest job decline with a loss of 151 jobs, equaling a drop of 10%. Accommodation and Food Services also saw a notable decrease in jobs after losing 53 jobs during this time. In all, nine of the 11 industry sectors in the county lost jobs, with only Agriculture, Forestry, Fishing, and Hunting (6) and Information (8) seeing job increases.
Lac qui Parle County experienced a 7.1% decrease in the number of jobs in the county, equaling a cut of 154 jobs. The largest percentage decrease was seen in Administrative and Support and Waste Management and Remediation which dropped 36.2% (-17 jobs) while the biggest numeric job loss was in the Health Care and Social Assistance sector, which decreased by 38 jobs (7.9%). This industry sector was followed by a loss of 32 jobs in Retail Trade. Three industry sectors experienced job gains from the first quarters of 2019 and 2021, albeit small ones, including a gain of eight jobs in Public Administration and five jobs in Professional, Scientific, and Technical Services. The number of firms bumped up from 228 to 231 for an increase of three additional employing establishments.
Le Sueur County saw job declines equaling 561 fewer jobs from the first quarter of 2019 to the first quarter of 2021, a drop of 6.9%. Manufacturing led the way in terms of job loss after experiencing a decrease of 433 jobs or a drop of 14.6%. This was followed by a loss of 115 jobs in Educational Services (15.1%) and 80 fewer jobs seen in Accommodation and Food Services (19.3%). The largest percent decrease occurred in Information, which dropped by 27.8%. Seven industry sectors saw an increase of jobs during this two-year time frame, led by an increase of 118 jobs in Retail Trade and 39 additional jobs in Transportation and Warehousing. Even with the overall job loss, the number of establishments grew by 35.
Lincoln County saw a job decline equaling 172 fewer jobs for a loss of 10.7% from the first quarter of 2019 to the first quarter of 2021. Construction was the leader for job loss after experiencing a drop of 72 jobs or 42.4%, followed by Retail Trade which cut 20 jobs or 11.1%. The largest percent decrease was seen in the Administrative Support and Waste Management and Remediation Services sector, which dropped by 61.3%, although this equaled only a loss of 19 jobs. The largest numeric and percent increase was in Utilities, which jumped by 15 jobs for a rise of 32.6%. Lincoln County was the only county in the region that did not experience any change in the number of employing firms.
Lyon County experienced the third highest numeric job loss of all the counties in the region with a loss of 903 jobs or 6.5%. This job loss was led by a drop of 236 jobs (23.5%) in Accommodation and Food Services followed closely by a decline of 234 jobs (9.3%) in Health Care and Social Assistance. Administrative Support and Waste Management and Remediation Services also saw a notable decline equaling 161 fewer jobs for a drop of 26.9%. The highest percentage decrease, however, was seen in Information which contracted by 46.4%. Only two industry sectors saw an increase in jobs, including 98 additional jobs seen in Management of Companies and only one additional job in Public Administration. From the first quarter of 2019 to the first quarter of 2021, however, the county experienced an increase in the number of firms, which was boosted by 27 firms.
Martin County saw a job decline of 7% from the first quarter of 2019 to 2021, decreasing from 8,381 jobs to 7,791. Despite this job loss, the county experienced an increase of 23 employing establishments during this time. Leading the pack in job loss was Health Care and Social Assistance, which experienced a drop of 200 jobs or 13%, followed by Accommodation and Food Services which lost 103 jobs or 14%. Fourteen other industry sectors experienced job loss during this time while only three saw job gains, including 40 additional jobs in Agriculture, Forestry, Fishing, and Hunting, eight more jobs in Administrative Support and Waste Management and Remediation Services, and only three additional jobs in Other Services.
Murray County lost a total of 136 jobs or 4.8% from the first quarter of 2019 to the first quarter of 2021. The industry sectors that saw the largest job declines included Retail Trade which lost 41 jobs for a drop of 11.4%, Wholesale Trade which dropped 18 jobs for a decrease of 9.5%, and Administrative Support and Waste Management and Remediation Services which saw a decline of 16 jobs or 42.1%, which was the highest percent drop of all the industry sectors in the county. Three industry sectors saw an increase in jobs, led by Public Administration which gained 16 jobs for a boost of 10%. During this time frame Murray County also saw a slight increase in the number of employing firms with a gain of four establishments.
Nicollet County, which is the second largest county in the region in terms of number of jobs, lost 794 jobs (5.3%) from the first quarter of 2019 to the first quarter of 2021. This was the fourth largest job decline seen among all the counties in the region. This drop in jobs was largely fueled by a substantial decrease in Manufacturing jobs. That industry sector lost 470 jobs for a decline of 11.9%. Information, which saw the second largest job decline in the county, shed 90 jobs for a loss of 25.7%, which was also the highest percent decrease among the industry sectors in the county. The largest increase among the county's industry sectors was experienced by Retail Trade, which added 90 jobs for an increase of 9.2%, followed by gains of 37 and 36 jobs in Wholesale Trade and Accommodation and Food Services, respectively. Nicollet County also experienced an increase in the number of establishments, which increased from 737 firms in the first quarter of 2019 to 782 in the first quarter of 2021 for a total increase of 45 establishments.
Nobles County saw the second smallest drop in job numbers of the 23 counties in the Southwest region, dropping by only 43 jobs for a decline of 0.4%. The biggest job loss was seen in Agriculture, Forestry, Fishing, and Hunting which experienced a decline of 151 jobs (33%). This was offset by a gain of 237 jobs in Manufacturing (7.6%). Notable losses were also seen in Health Care and Social Assistance (-52 or 4%) and Other Services (-42 or 12.8%). On the other hand, four industry sectors experienced an increase in jobs; however, much smaller gains were seen than Manufacturing saw. These industry sectors that gained jobs include: Administrative Support and Waste Management and Remediation Services, Real Estate and Rental and Leasing, Public Administration, and Educational Services. Nobles County also saw a small increase in the number of establishments with a gain of three.
Pipestone County experienced a 9.1% drop in jobs from the first quarter of 2019 to the first quarter of 2021, losing 389 jobs during this time. The largest job losses based on industry sector occurred in Manufacturing, which fell by 40.3% with a decrease of 211 jobs. Smaller yet notable losses were also seen in Accommodation and Food Services and in Retail Trade with each sector losing over 30 jobs. Only three industry sectors saw a gain in jobs, but far from enough to offset the loss of jobs seen in Manufacturing. The leading industry sector in job gains was Construction, which jumped by 15 jobs or 9.5%. Despite the job loss, the county experienced a gain of 14 firms.
Redwood County also fell victim to job loss, witnessing a decrease of 317 jobs for a drop of 5.3%. The most substantial losses were seen in the Manufacturing sector (-53 or 4.7%), Accommodation and Food Services (-41 or 13.1%) and Retail Trade (-38 or 5.6%). Smaller losses were seen in eight additional industry sectors. Two industry sectors, however, saw a gain in the number of jobs, including an increase of 14 jobs in Arts, Entertainment, and Recreation (63.6%) and a jump of 19 jobs in Other Services (13.7%). Two additional sectors – Real Estate and Rental and Leasing and Finance and Insurance – saw no change in job numbers. Redwood County also saw an increase in the number of employing establishments with an increase of 10 firms.
Rock County was one of the three counties in the region that experienced a gain of jobs during this time frame with the addition of 177 jobs for a jump of 5.4%. This was the second highest gain among those three counties and the third highest in the entire state. This overall gain in jobs was largely caused by a solid increase in the number of jobs in the Manufacturing industry, which saw a gain of 341 jobs, while Health Care and Social Assistance added another 28 jobs. The largest job declines were seen in Retail Trade and Accommodation and Food Services, which lost 58 (14.5%) and 52 (22.6%) jobs, respectively. In addition, Finance and Insurance added to the job decline by losing 39 jobs (12.2%), and Educational Services compounded the loss with a loss of 28 jobs (9%). With the overall increase in the number of jobs, the county also saw an increase in the number of firms with an increase of 19.
Sibley County experienced an overall loss of jobs from the first quarter of 2019 to 2021 with a decrease of 328 jobs, a loss of 8.3%. The largest losses were seen in Educational and Health Services, which cut 360 jobs, as well as Agriculture, Forestry, Fishing, and Hunting, which dropped 50 jobs or 6.6% while Other Services lost an additional 19 jobs for a decline of 19.6%, which was also the highest percent decline in the county. Meanwhile, Administrative Support and Waste Management and Remediation Services saw the largest increase in jobs by adding 38 jobs, while Manufacturing with 32) Public Administration with 18, and Construction with 17 were the largest contributors to job gains. Overall, the county also saw an increase in the number of firms with an increase of 18 employing establishments.
Swift County saw a 5.6% decrease in the number of jobs equaling a loss of 192 jobs. Job declines were led by a loss of 88 jobs in Educational and Health Services, 27 fewer jobs in Wholesale Trade (9.2%), a drop of 23 jobs in Construction (14.5%), and a decline of 22 jobs in Accommodation and Food Services (11.2%). Meanwhile, six other industry sectors saw smaller job losses. Job gains on the other hand were led by an increase of 23 jobs in Public Administration (8.2%) and 16 additional jobs in Manufacturing (2.7%) while two other industries saw smaller increases. Swift County also saw an increase of 15 establishments from the first quarter of 2019 to the first quarter of 2021.
Waseca County experienced a job decline of 183, equaling a 3.2% drop in the number of jobs in the county after shifting from 5,663 jobs in the first quarter of 2019 to 5,480 jobs in the first quarter of 2021. Both Manufacturing and Public Administration experienced a loss of 50 jobs over this time frame for decreases of 5% and 9%, respectively. Construction lent to the overall job loss with a decline of 23 jobs (8.8%) while Arts, Entertainment, and Recreation lost 14 jobs for a loss of 32.6%, which was the highest percentage loss. Retail Trade led the pack in job gains after seeing an increase of 44 jobs, equaling an 8.8% incline while much smaller gains were seen in Wholesale Trade (7), Accommodation and Food Services (5), and Finance and Insurance (4). Despite the county's seeing an overall job loss, the number of firms increased by 38.
Watonwan County was the third county in the region that saw job increases during this two-year period, albeit the job gain was rather minimal with a gain of only 13 jobs (0.3%). This gain was led by a large increase in the number of jobs in the Manufacturing industry (105 or 8.4%) followed by smaller yet still impactful gains in Construction (29 or 12.3%) and Administrative Support and Waste Management and Remediation Services (18 or 21.7%). However, there were seven industry sectors that lost jobs, led by a drop of 59 jobs (17.9%) in Retail Trade, a decline of 50 jobs (12.2%) in Educational Services, and a shedding of 41 jobs (33.3%) in Other Services. Along with the overall increase in the number of jobs, the number of employing firms also increased by 17 establishments.
Yellow Medicine County experienced the fourth largest percent decrease in jobs of the 23 counties in the region with a drop of 8.6%, equaling a numeric decline of 344 fewer jobs. Most of the industry sectors in the county saw job declines ranging from a high of 114 fewer jobs in Educational and Health Services and 58 fewer jobs (27.5%) in Manufacturing to a low of just one less job in both the Finance and Insurance and the Professional, Scientific, and Technical Services industries, equaling losses of 1.1% and 1.9%. Larger losses were also seen in Construction (-41 or 17.5%) and Public Administration (-33 or 9.9%). Only one industry sector (for which data was available) saw an increase in jobs, that being Retail Trade which saw a jump of 23 jobs for an increase of 5.9%. Like all the other counties in the region, Yellow Medicine also saw growth in the number of firms with an increase of five establishments.
In sum, 20 of the 23 counties in the Southwest Planning Region experienced job losses from the first quarter of 2019 to the first quarter of 2021. These losses ranged from a high of 2,308 in Blue Earth County to a drop of only 25 jobs in Big Stone. The remaining three counties - Watonwan, Rock, and Cottonwood - saw job gains during this time frame with gains ranging from 13 additional jobs in Watonwan County to 545 more jobs in Cottonwood County (Figure 3). When you look at job losses or gains as a percentage, they range from a drop of 10.7% in Lincoln County to an increase of 10.9% in Cottonwood County. In addition, only one county in the region experienced a loss of firms, that being Chippewa County which saw a decrease of three establishments. Establishment gains ranged from a low of three in Lac qui Parle and Nobles Counties to a high of 78 additional firms in Blue Earth County.
Times have changed and likely will continue to change, and the resiliency of Southwest Minnesota's economy is being stressed for sure. Local leaders are not only asked to find new jobs, but now they must help find solutions to bring back the jobs and workers that have disappeared since 2019.
It's not just local leaders that have to change with the times, as employers are finding that they too have to make changes to keep up or even to stay afloat. As labor market conditions continue to change in response to the pandemic, employers are finding themselves having to navigate uncertain territory. One thing is for sure though, at least according to the data – the labor force shortage is here to stay – and whether or not the region will be able to rebound from the job loss suffered, not to mention any job growth that may occur, is going to be reliant on finding the people to fill those jobs while simultaneously retaining their current workforce.
