by Tim O'Neill
June 2020
The coronavirus pandemic that spread across the nation and state in March and April of 2020 put a halt to the longest running economic expansion in recent history. Statewide, more than 660,000 workers had filed applications for Unemployment Insurance (UI) in Minnesota from March 16 to May 16, with specific demographics, geographies and industries more affected than others. To put the recent economic events into context, DEED has provided a set of articles explaining the impact in each region.
COVID-19's impacts on the Twin Cities Metro Area labor market are unprecedented in scope and speed, and the demographics, industries and occupations of those most affected are different from 2019 and from those seen during the peak of the Great Recession in 2009. After 10 years of strong employment expansion, the pandemic has already resulted in and will continue to cause 46 significant changes for the Metro Area labor market.
To better understand the unprecedented effects of COVID-19 containment measures on the labor market in the Metro Area, this article examines data from two main sources. First, DEED's Quarterly Census of Employment and Wages (QCEW) can provide both a broad and in-depth look at how the Metro Area was doing just up to the beginning of COVID-19 impacts in our area. Second, Unemployment Insurance (UI) statistics reveal the significant spike in individuals facing layoffs or reduced hours and signing up for unemployment benefits, as well as demographic, industry and occupational information about those applying.
Through the end of 2019, there were about 85,000 employer establishments in the Metro Area with just over 1,773,000 jobs, accounting for 61.1% of total employment in the state. Total payroll for 2019 topped $117.8 billion, with average annual wages of $66,456. Over the past year of available data, the Metro Area added nearly 10,800 jobs, growing by an average of 0.6%, down a full percentage point from the previous five year average. It is also worth noting that there was a wide range in year over year percent job change across the seven metro counties, from a decline of -0.3% in Carver County to an increase of 1.4% in Anoka County. From the end of the Great Recession in 2010 through 2019, the Metro Area averaged annual employment growth of 1.7%, equivalent to 26,200 net new jobs per year. Over the past five years, between 2014 and 2019, employment growth was slightly slower than the first five years after the end of the Great Recession. During 2014-2019, the Metro Area averaged annual employment growth of 1.6% – equivalent to 25,900 additional jobs per year.
Table 1. Metro Area Employment Statistics, 2019
| Area | Annual 2019 Data | 2018 – 2019 | ||||
|---|---|---|---|---|---|---|
| Number of Establishments | Number of Jobs | Total Payroll ($1,000s) | Average Annual Wage | Numeric Job Change | Percent Job Change | |
| Minnesota | 178,242 | 2,900,290 | $172,936,995 | $59,644 | +18,383 | +0.6% |
| Metro Area | 84,632 | 1,773,078 | $117,800,140 | $66,456 | +10,763 | +0.6% |
| Hennepin County | 40,439 | 936,492 | $68,540,616 | $73,216 | +5,659 | +0.6% |
| Ramsey County | 14,021 | 334,680 | $21,749,708 | $65,000 | +762 | +0.2% |
| Dakota County | 10,556 | 190,960 | $11,089,726 | $58,084 | +854 | +0.4% |
| Anoka County | 7,692 | 127,559 | $7,008,473 | $54,912 | +1,780 | +1.4% |
| Washington County | 5,973 | 88,186 | $4,336,681 | $49,140 | +1,162 | +1.3% |
| Scott County | 3,404 | 54,713 | $2,819,134 | $51,480 | +661 | +1.2% |
| Carver County | 2,549 | 40,487 | $2,255,802 | $55,692 | -116 | -0.3% |
| Source: MN DEED Quarterly Census of Employment and Wages (QCEW) | ||||||
Beginning in mid-March 2020, measures were taken to slow the spread of COVID-19, including the Stay at Home order and temporary closures on in-person service at bars and restaurants, as well as temporary closures of businesses offering personal care services like hair salons, barber shops and tattoo parlors. These measures had larger impacts on certain industries than others. The industries that were most impacted include accommodation and food services (notably restaurants and bars); personal care services; arts, entertainment, and recreation; and more recently retail trade and construction. Altogether, these five industries accounted for nearly 430,000 jobs, or about one-quarter of the Metro Area's total employment in 2019 (see Table 2).
Table 2. Metro Area Selected Industry Statistics, 2019
| Area | Number of Jobs (Share of Total Employment) | |||||
|---|---|---|---|---|---|---|
| Total, All Jobs | Retail Trade | Accommodation & Food Services | Construction | Arts, Entertainment, & Recreation | Personal Care Services | |
| Minnesota | 2,900,290 | 293,283 (10.1%) | 235,222 (8.1%) | 134,248 (4.6%) | 53,533 (1.8%) | 16,325 (0.6%) |
| Metro Area | 1,773,078 | 164,605 (9.3%) | 140,768 (7.9%) | 75,561 (4.3%) | 36,224 (2.0%) | 12,079 (0.7%) |
| Hennepin Co. | 936,492 | 75,475 (8.1%) | 70,414 (7.5%) | 31,787 (3.4%) | 16,608 (1.8%) | 6,006 (0.6%) |
| Ramsey Co. | 334,680 | 25,774 (7.7%) | 24,090 (7.2%) | 12,238 (3.7%) | 6,668 (2.0%) | 1,532 (0.5%) |
| Dakota Co. | 190,960 | 24,114 (12.6%) | 15,601 (8.2%) | 10,468 (5.5%) | 3,751 (2.0%) | 1,582 (0.8%) |
| Anoka Co. | 127,559 | 15,779 (12.4%) | 10,212 (8.0%) | 8,838 (6.9%) | 3,316 (2.6%) | 1,063 (0.8%) |
| Washington Co. | 88,186 | 14,184 (16.1%) | 9,469 (10.7%) | 4,298 (4.9%) | 2,311 (2.6%) | 1,242 (1.4%) |
| Scott Co. | 54,713 | 5,770 (10.5%) | 7,398 (13.5%) | 5,286 (9.7%) | 2,261 (4.1%) | 396 (0.7%) |
| Carver Co. | 40,487 | 3,509 (8.7%) | 3,583 (8.8%) | 2,646 (6.5%) | 1,305 (3.2%) | 256 (0.6%) |
| Source: MN DEED Quarterly Census of Employment and Wages (QCEW) | ||||||
Regional differences in industry make-up going into 2020 set the stage for disparities in labor market impact during the COVID-19 crisis. For example, accommodation and food services is twice as concentrated in Scott County as it is in the rest of the Metro Area, making up 13.5% of Scott County's total employment in 2019, while it only accounts for 7.2% of Ramsey County's total employment.
For just the months of March and April 2020, the Metro Area had 359,187 initial claims for unemployment. The scope and speed of initial unemployment claims is unprecedented. During the peak of the Great Recession in 2009, 37,364 people filed initial claims in March and April. In March and April of 2019, there were a total of just 12,635 initial claims for unemployment. This means 2020 has shown a nearly 900% increase compared to 2009, and a 2800% increase over 2019. Figure 1 highlights monthly UI claims between January 2000 and April 2020.
Between March 16 and May 16, UI applications in the Metro Area represented over one-fifth of the region's total labor force in 2019. There is significant variation by county in the metro, ranging from 19.2% of the labor force applying for unemployment benefits in Carver County to 24.2% in Anoka County.
While whites made up 80% of the labor force in the region, they accounted for just 64.3% of UI applications through May 16. This means that layoff activity during the pandemic has been more concentrated among People of Color within the region, and for two groups in particular. As of mid-May, nearly 39% of Black or African American workers have applied for unemployment – more than double the rate for whites – and 31% of American Indian workers have been affected. Likewise, more than one-quarter of Asian or Pacific Islanders and workers of Hispanic or Latino origin submitted a UI application through May 16 (see Table 3). These adverse employment impacts on People of Color could deepen the economic disparities already present in the region.
Table 3. Twin Cities Metro Unemployment Insurance Applicants by Race, Mar. 16-May 16
| Race | Cumulative UI Applications Through May 16 | Share of UI Applications | Total Labor Force | Share of Total Labor Force | UI Applications as a Share of Total Labor Force |
|---|---|---|---|---|---|
| White Alone | 265,961 | 64.3% | 1,380,109 | 79.7% | 19.3% |
| Black or African American | 55,387 | 13.4% | 142,887 | 8.2% | 38.8% |
| American Indian/Alaska Native | 2,604 | 0.6% | 8,495 | 0.5% | 30.7% |
| Asian or Pacific Islanders | 33,139 | 8.0% | 121,027 | 7.0% | 27.4% |
| Some Other Race and Two or More Races | 12,244 | 3.0% | 79,582 | 4.6% | 15.4% |
| Choose not to answer | 19,483 | 4.7% | N/A | N/A | N/A |
| Hispanic or Latino | 24,645 | 6.0% | 97,857 | 5.6% | 25.2% |
| Total | 413,463 | 100.0% | 1,732,100 | 100.0% | 23.9% |
| Source: DEED Unemployment Insurance Statistics, 2014-2018 American Community Survey 5-Year Estimates | |||||
Current layoffs are having the biggest impact on different demographics than those most affected during the peak of the Great Recession in 2009 and in 2019. In 2009 and 2019 about two-thirds of UI claims in the region were filed by males. For March and April 2020, over half (54.6%) of UI claims were filed by females. The age profile of current unemployment claimants is also younger than during the peak of the Great Recession and during 2019. In 2009, 26% of claimants were under 30 years of age, and in the tight labor market of March 2019, just one-in-five UI claims were filed by those under 30 years of age. During March 2020, one-in-three UI claims were filed by the youngest workers.
Beyond age and gender, industry sector breakdowns of UI applicants for March 2020 also shifted dramatically from the past year and the peak of the Great Recession. During 2009, industries with the most UI applications included Manufacturing (17% of total UI applications), construction (16%), administrative and support services (10%), Retail Trade (8%), and health care and social assistance (7%). In 2019, industries with the most UI applications included construction (23%), administrative and support services (11%), manufacturing (10%), health care and social assistance (8%), and professional and technical Services (8%). As of March 2020, the top industries for most UI applications included accommodation and food services (24%), health care and social assistance (14%), retail trade (11%), other services (9%), and manufacturing (5%) (see Table 4).
Table 4. Metro Area Unemployment Insurance Claims by Industry Sector, 2009 – 2020
| Industries with the most UI Claims in March 2009 | Industries with the most UI Claims in March 2020 | |||
|---|---|---|---|---|
| Industry Sector | UI Claims (Share) | Industry Sector | UI Claims (Share) | |
| Total, All Industries | 20,173 | Total, All Industries | 168,704 | |
| Manufacturing | 4,046 (20.1%) | Accommodation and Food Services | 39,724 (23.5%) | |
| Construction | 2,913 (14.4%) | Health Care and Social Assistance | 23,956 (14.2%) | |
| Administrative and Support Services | 2,060 (10.2%) | Retail Trade | 18,637 (11.0%) | |
| Retail Trade | 1,770 (8.8%) | Other Services | 15,352 (9.1%) | |
| Professional and Technical Services | 1,350 (6.7%) | Manufacturing | 9,076 (5.4%) | |
| Health Care and Social Assistance | 1,286 (6.4%) | Arts and Entertainment | 8,194 (4.9%) | |
| Accommodation and Food Services | 1,086 (5.4%) | Administrative and Support Services | 8,006 (4.7%) | |
| Wholesale Trade | 1,059 (5.2%) | Construction | 7,836 (4.6%) | |
| Management of Companies | 741 (3.7%) | Professional and Technical Services | 6,811 (4.0%) | |
| Finance and Insurance | 709 (3.5%) | Transportation and Warehousing | 6,329 (3.8%) | |
| Source: MN DEED Unemployment Insurance Statistics | ||||
Distribution of UI applications by occupation in March 2020 is also very different from historical trends. For example, in 2009 four occupational groups accounted for just under half of the total UI applications for the year: construction and extraction, production, sales, and office and administrative support. During March 2020, four occupational groups also accounted for just under half of the total UI applications for the month: food preparation and serving, sales, office and administrative support, and personal care and service.
After more than a decade of steady employment growth in the Seven-County Metro Area, workers, businesses and entire industry sectors are experiencing the effects of COVID-19. In the coming weeks and months as we move into recovery, beyond providing much-needed assistance for businesses and workers throughout Minnesota, DEED will continue to monitor labor market trends in the Metro Area and across the state.
