Our annual state-of-the-state issue of Trends provides an overview of the Minnesota economy and takes a close look at each of the state’s six major regions. At the midway point of 2018, one issue dominates the conversation: the search for workers. The state set a fourth-quarter record with nearly 114,000 job vacancies late last year and had more open jobs than people to fill them. Employers in virtually every industry in the state were scrambling to fill vacant positions.
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Eleven years ago, Minnesota was just beginning to enter a recession that ultimately would cost the state more than 160,000 jobs. By May 2009, the jobless rate had swelled to 8 percent and 235,000 Minnesotans were out of work. Things have changed significantly since then, with employers now struggling to fill positions in a tight labor market.
With the current expansion officially the second-longest on record and the U.S. unemployment rate at its lowest level since 1969, we are facing conditions as tight as anyone can remember. Because baby boomers will continue to turn 65 for the next decade, these conditions will remain for some time. Welcome to the uncharted territory of prolonged worker shortages.
One of the distinct features of recent labor force growth in northwestern Minnesota is the diversity of new workers. In 2016, the region had 9,000 more people of color in the workforce than in 2000. This represents 40 percent of the region’s overall labor force growth since the turn of the century.
Health care and social assistance is the dominant industry in northeastern Minnesota, accounting for 23.9 percent of all jobs in the region. In fact, northeastern Minnesota has the second-highest concentration of health care and social assistance jobs of the state’s six planning regions, trailing only southeastern Minnesota’s Mayo Clinic in Rochester.
Despite disruptive forces influencing the way consumers shop, Central Minnesota continues to add retail jobs. In stark contrast to headlines announcing the struggles of major retailers nationwide, the region had record retail employment in 2017. The outlook for the industry looks positive, with projections showing employment growth of 6.8 percent from 2014 to 2024.
Professional, scientific and technical services is one of the largest industries in the Twin Cities, accounting for nearly 125,000 jobs. The high-paying industry includes businesses that specialize in legal advice and representation; accounting, bookkeeping and payroll; architectural, engineering, and specialized design; computers; consulting; research; advertising; photography; translation and interpretation; and veterinary services.
Food manufacturing is a major industry in southwestern Minnesota. The region is home to 109 food manufacturing establishments providing more than 11,000 jobs. That is nearly 25 percent of the state’s total employment in food manufacturing. In 2017, food manufacturing was nearly four times more concentrated in southwestern Minnesota than the state as a whole.
Of the 59 business expansion projects in southeastern Minnesota from 2013 to 2017, 43 of them were in manufacturing, the No. 2 employer in the region. Health care and social assistance accounted for the most expansion investments, with a minimum of $330 million invested. That would be expected given the sector is the region’s top-employing industry.