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Labor Market Shifts in the Metro Area

tim-oneill

by Tim O'Neill
June 2021

Labor Force Trends in the Metro Area

Metro Area Labor Force Trends 2005-2020The Seven-County Metro Area's labor force shifted dramatically over the course of 2020. On an annual basis, the region's total labor force size dropped by 0.9%, or 16,100 persons. This labor force drop, however, hides much more dramatic employment and unemployment trends between 2019 and 2020. More specifically, the region's total employment declined by 4.1% (69,100 persons), while total unemployment spiked upwards by 105.0% (52,981 persons) (Figure 1).

Annually, the Metro Area's unemployment rate increased from 2.9% in 2019 to 6.0% in 2020. On a monthly basis, the unemployment rate hit 10.1% in May 2020, which represented approximately 172,300 unemployed persons. This was more than three times the number of unemployed persons in the months leading up to the onset of the COVID-19 pandemic.

As of April 2021, the Metro Area's labor force has shown significant signs of recovery. After jumping up and down in the early months of the pandemic and then declining to close out the year, the region's workforce increased by approximately 32,200 persons between January and April 2021, suggesting a return to labor force growth. This was due to an increase in employment of 39,500 persons, and a decrease of unemployment of 7,300 persons - showing that people were coming back into the labor force and getting jobs. As of April 2021, the unemployment rate for the Metro Area equaled 4.1%. This represented approximately 69,100 persons, down well over half compared to one year prior.

Unemployment Insurance Trends in the Metro Area

Metro Area Unemployment Insurance Trends 2020-2021Along with major labor force shifts came major spikes in claims for Unemployment Insurance (UI) during the pandemic. Between February and March 2020, initial claims for UI in the Metro Area increased by nearly 2400%. In other words, such claims were about 25 times higher in March 2020 than they were one month previous. Such claims would top out at nearly 190,500 in April 2020, before steadily declining through October of that year. Meanwhile, continued claims for UI peaked at nearly 300,000 in May 2020. While initial and continued UI claims did increase slightly during the winter months of 2020, they have declined through the beginning months of 2021. In April 2021, there were approximately 21,300 initial and 76,300 continued claims for UI (Figure 2). While down drastically from April 2020, these claims are still up from pre-pandemic times. Initial UI claims and continued UI claims in April 2021 are up about 238% and 321% from April 2019, respectively.

Throughout the course of the COVID-19 pandemic, the share of UI claims has been disproportionately among Black, Indigenous and People of Color (BIPOC) metro residents. This continued to be the case as recently as April 2021. As of that month, the share of continued UI claims filed by white workers was 56.2%, where that population makes up 79.0% of the region's labor force. The Black or African American share of continued UI claims was 24.6%, where that population makes up 8.5% of the region's labor force.

Industry Trends in the Metro Area

Quarterly Census of Employment and Wages (QCEW) data can provide a thorough examination of the Seven-County Metro Area's employment landscape. Looking at annual averages for 2020, the Metro Area had 86,401 establishments supplying 1,643,484 covered jobs. As such, the Metro Area accounts for three-fifths (60.7%) of Minnesota's total employment. Top-employing major industry sectors in the region include Health Care & Social Assistance (270,069 jobs), Manufacturing (166,270 jobs), and Retail Trade (152,212 jobs). Those regional industry sectors accounting for a higher share of statewide employment include Management of Companies (88.1% of statewide employment); Professional, Scientific, & Technical Services (78.3%); Finance & Insurance (77.9%); Real Estate, Rental & Leasing (77.1%); and Administrative & Support Services (70.3%). Total payroll across all industries in the region equaled $117.6 billion in 2020, with the average annual wage at $71,500 (Table 1).

Table 1. Seven-County Metro Area Industry Statistics, Annual 2020 (Sorted by Number of Jobs)

Industry Number of Establishments Number of Jobs Share of MN Jobs Total Payroll ($1,000s) Avg. Annual Wage
Total, All Industries 86,401 1,643,484 60.7% $117,643,062 $71,500
Health Care and Social Assistance 11,622 270,069 55.5% $15,178,305 $56,108
Manufacturing 4,065 166,270 53.8% $13,463,146 $80,912
Retail Trade 8,571 152,212 55.0% $5,558,064 $36,504
Educational Services 2,220 128,073 58.8% $7,712,089 $60,268
Professional, Scientific, and Technical Services 11,345 121,357 78.3% $13,006,106 $107,120
Finance and Insurance 4,906 114,577 77.9% $14,431,297 $125,892
Accommodation and Food Services 6,178 101,881 57.4% $2,349,112 $22,984
Administrative and Support Services 4,353 85,363 70.3% $4,081,332 $47,840
Management of Companies 922 76,575 88.1% $10,434,025 $136,136
Wholesale Trade 5,004 74,836 60.0% $6,929,686 $92,560
Construction 6,758 73,007 55.7% $5,848,805 $80,080
Public Administration 793 70,979 53.7% $5,163,856 $72,800
Transportation and Warehousing 2,008 68,629 65.6% $4,308,806 $62,660
Other Services (except Public Administration) 9,549 48,068 62.1% $2,105,477 $44,096
Information 1,738 32,150 68.9% $3,129,899 $97,344
Real Estate and Rental and Leasing 4,209 26,162 77.1% $1,662,153 $63,492
Arts, Entertainment, and Recreation 1,729 23,410 63.7% $1,291,719 $56,680
Utilities 109 6,210 46.5% $805,241 $129,636
Agriculture, Forestry, Fishing and Hunting 291 3,123 13.7% $125,991 $40,404
Mining 36 528 9.6% $57,954 $111,748
Source: DEED Quarterly Census of Employment and Wages (QCEW)

Digging into employment trends for these major industries begins to reveal how the Metro Area's economy was affected by COVID-19. For example, the Arts, Entertainment & Recreation industry lost the greatest share of employment (-58.0%) at the height of COVID-19's impact during the second quarter of 2020. Accommodation & Food Services (-47.4%) and Other Services (-34.8%) were also severely impacted. Administrative & Support Services (-20.7%) and Retail Trade (-17.0%) rounded out the major industries that lost higher shares of their respective employment than the total of all industries (-13.1%) in the region between the second quarters of 2019 and 2020 (Figure 3).

Metro Area Quarterly Industry Trends 2019-2020

Nearly every major industry sector witnessed improved employment numbers through the third and fourth quarters of 2020. However, as COVID-19 cases spiked and new restrictions to curb the spread of the virus were put in place at the end of 2020, Arts, Entertainment & Recreation and Accommodation & Food Services experienced greater over-the-year losses during the fourth quarter. Overall, the Metro Area's total over-the-year employment losses decreased from 13.1% in the second quarter to 9.2% in the third quarter to 7.9% in the fourth quarter, showing the region's recovery progress.

When zooming in upon detailed industries, top-employing sectors for the Metro Area include Restaurants (83,234 jobs during annual 2020); Elementary & Secondary Schools (78,213 jobs); Management of Companies (76,575 jobs); General Medical & Surgical Hospitals (63,307 jobs); Individual & Family Services (51,347 jobs); Depository Credit Intermediation (39,052 jobs); Employment Services (37,401 jobs); Colleges, Universities, & Professional Schools (34,197 jobs); Insurance Carriers (32,673 jobs); and Offices of Physicians (31,289 jobs). Altogether, these ten subsectors accounted for nearly one-third (32.1%) of the Metro Area's total employment in 2020.

As described for the major industry sectors, there is no doubt that particular subsectors were more impacted than others by COVID-19. Table 2 lists those in-depth industries losing the most jobs between 2019 and 2020 in the Metro Area. With these industries experiencing such losses, the Metro Area did lose a greater share of its total employment between annual 2019 and 2020 (-7.5%) than the state did overall (-6.7%).

It should be noted that most of those industries losing significant employment over the course of 2020 had lower average annual wages. More specifically, of the top 20 industries losing the most jobs between 2019 and 2020, 16 had lower average annual wages than the average for the total of all industries (Table 2). This enforces the fact that COVID-19 had a disproportionate impact upon lower-paying industries and occupations in the region.

Table 2. Metro Area In-Depth Industries Losing the Most Jobs, Annual 2019-2020 (Sorted by Numeric Change in Jobs)

Industry Number of Establishments Number of Jobs Avg. Annual Wage Change in Jobs 2019 – 2020
Numeric Percent
Total, All Industries 86,401 1,643,484 $71,500 -132,607 -7.5%
Restaurants 4,944 83,234 $20,956 -26,460 -24.1%
Employment Services 726 37,401 $46,124 -7,452 -16.6%
Traveler Accommodation 353 10,113 $36,296 -6,610 -39.5%
Other Amusement and Recreation Industries 967 14,272 $24,388 -6,407 -31.0%
Special Food Services 566 5,719 $31,668 -4,395 -43.5%
Elementary and Secondary Schools 964 78,213 $57,564 -3,239 -4.0%
Civic and Social Organizations 397 5,378 $27,300 -3,061 -36.3%
Clothing Stores 792 7,508 $22,672 -2,820 -27.3%
Personal Care Services 1,588 9,589 $30,784 -2,533 -20.9%
Other Schools and Instruction 710 7,031 $26,520 -2,511 -26.3%
Management of Companies and Enterprises 922 76,575 $136,136 -2,326 -2.9%
Scheduled Air Transportation 24 11,143 $95,472 -2,153 -16.2%
Offices of Physicians 1,032 31,289 $107,068 -1,994 -6.0%
General Medical and Surgical Hospitals 62 63,307 $73,684 -1,950 -3.0%
Promoters of Performing Arts, Sports, and Similar Events 119 1,255 $43,732 -1,937 -60.7%
Executive, Legislative, and Other General Government Support 266 30,570 $69,368 -1,929 -5.9%
Department Stores 138 13,169 $23,816 -1,918 -12.7%
School and Employee Bus Transportation 83 5,016 $30,108 -1,804 -26.5%
Child Day Care Services 779 10,375 $28,132 -1,755 -14.5%
Vocational Rehabilitation Services 130 4,952 $35,620 -1,674 -25.3%
Source: DEED Quarterly Census of Employment and Wages (QCEW)

County Quarterly Employment Trends 2019-2020While most industries did lose employment over the course of 2020, there were some industries that gained jobs on an annual basis. Among these subsectors with the most positive employment growth include Individual & Family Services (+2,121 jobs), General Merchandise Stores (+897 jobs), Warehousing & Storage (+890 jobs), Software Publishers (+869 jobs); Couriers (+623 jobs), Medical & Diagnostic Laboratories (+602 jobs), Medical Equipment & Supplies Manufacturing (+594 jobs), and Educational Support Services (+575 jobs).

All counties within the Metro Area witnessed employment losses during 2020. These losses were most severe between the second quarters of 2019 and 2020, ranging from an -11.9% loss for Anoka County to a -13.6% loss for Hennepin County. Between the third quarters of 2019 and 2020, employment losses improved significantly for Washington County (-5.5%), Scott County (-5.9%), and Anoka County (-6.2%). Losses continued to improve most significantly for Scott County (-3.1%) and Washington County (-3.5%) between the fourth quarters of 2019 and 2020 (Figure 4). Numerically, Hennepin County accounted for over half (56.9%) of the Metro Area's annual employment losses between 2019 and 2020, with Ramsey County accounting for another fifth (19.7%) of the region's losses during that time.

Hiring Demand in the Metro Area

Despite major shifts in the Metro Area's labor force and industry employment over the course of 2020, hiring demand remained strong. In fact, while vacancies understandably dipped through the second quarter of 2020, they bounced back past 75,700 vacancies during the fourth quarter of that year. This virtually matched the number of job vacancies from one year previous and represented the region's fourth-highest number of job vacancies since DEED's Job Vacancy Survey started in 2001 (Figure 5).

Job Vacancy Trends in the Metro Area 2005-2020

While total job vacancies in the Metro Area returned to normal levels during the fourth quarter of 2020, there were significant changes among the number of vacancies by major occupational groups. Most notably, Personal Care & Service Occupations as well as Food Preparation & Serving Occupations witnessed severe drops in vacancies over that period. At the same time the Healthcare Support, Healthcare Practitioners, Sales & Related, and Transportation & Material Moving occupational groups witnessed large increases in vacancies over the year. Those occupational groups that experienced steep job vacancy losses during the second quarter of 2020 followed by equally steep increases during the fourth quarter of 2020 include Computer & Mathematical; Sales & Related; Office & Administrative Support; Installation, Maintenance & Repair; and Production. The industries with the most job vacancies during the fourth quarter of 2020 included Health Care & Social Assistance (17,100 vacancies), Wholesale Trade (12,000 vacancies), Retail Trade (9,800 vacancies), Accommodation & Food Services (7,000 vacancies), Manufacturing (6,500 vacancies), and Professional & Technical Services (6,400 vacancies).

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