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The Metro Area's Labor Market in Motion

tim-oneill

By Tim O'Neill
June 2024

Entering the summer months of 2024, the Seven-County Twin Cities Metro Area continues to witness a labor market in constant motion. With brand new labor force statistics, industry statistics, and hiring demand data, we can get a unique look at this motion over the months and years. The data allows us to see how the Metro Area's labor market fits into Minnesota's labor market, and how it has differed over time. Looking into the data, we can begin to understand how the region has recovered from the Pandemic Recession and where challenges persist.

Labor Force Trends in the Metro Area

According to Local Area Unemployment Statistics (LAUS), the Metro Area's labor force reached an annual average of around 1,728,500 workers in 2023. The labor force includes all persons 16 years of age and older, living within a specified geographic area who are either employed or unemployed but who were available for work and made a specific effort to find work in the last four weeks. Additionally, unemployed persons include new entrants to the labor force, re-entrants, job losers and job leavers. The number includes many more people than just those who have filed claims for unemployment insurance. In sum, the labor force size is a count of persons, not jobs, and is available by location of residence and not by location of work.

The labor force size across Minnesota, including within the Metro Area, has been closely watched over the past years and decades. Much of this analysis is due to an aging population and labor force, as well as the lingering impacts of COVID-19. After seeing steady growth for decades, between February 2020 and April 2020, the Metro Area's labor force plummeted by 88,900 people (-5.1%). Then with some fluctuation, the labor force was able to recover 14,800 people (+0.9%) through January 2021.

Since that time, between January 2021 and April 2024, the region's labor force expanded by a further 45,700 people (+2.7%). While recent growth has been encouraging, there's no escaping the fact that the Metro Area's labor force is still down by nearly 28,400 persons since February 2020, immediately pre-pandemic (see Figure 1).

Metro Area Monthly Labor Force Trends

This loss isn't unique to the Metro Area. Between February 2020 and April 2024, Minnesota's labor force is still down nearly 34,100 persons (-1.1%). Recent articles and analysis point to several reasons why the state's labor force has yet to match or exceed pre-COVID levels, including slower population growth rates, declines in labor force participation rates for older workers, and an aging population. Higher household incomes and more widespread access to retirement accounts in Minnesota compared to neighboring states is also a likely factor leading to increased retirements for Minnesota workers.

Longer term, the Metro Area's labor force has grown by 6.2% between 2013 and 2023. This is equivalent to just over 101,500 additional workers in a ten-year period. Despite declines during the pandemic, more recent annual trends also showcase encouraging growth. Between 2022 and 2023, the Metro Area's labor force expanded by 0.9%. This was equivalent to nearly 15,800 people. The region's seven counties all experienced labor force growth during this period, led by Hennepin County's additional 6,400 workers. Scott County and Carver County witnessed the smallest but fastest labor force growth between 2022 and 2023, each expanding by 1.1% (Table 1).

Table 1. Metro Area Labor Force Statistics, Annual 2023 Sorted by Labor Force Size
Area Labor Force Size 2022 – 2023 Labor Force Change Unemployment Unemployment Rate
United States 167,116,416 +2,829,250 (+1.7%) 6,079,916 3.6%
Minnesota 3,099,922 +22,422 (+0.7%) 87,215 2.8%
Metro Area 1,728,472 +15,766 (+0.9%) 44,877 2.6%
Hennepin County 708,159 +6,421 (+0.9%) 18,281 2.6%
Ramsey County 286,615 +2,276 (+0.8%) 7,705 2.7%
Dakota County 243,607 +2,302 (+1.0%) 6,215 2.6%
Anoka County 199,737 +1,830 (+0.9%) 5,511 2.8%
Washington County 145,662 +1,375 (+1.0%) 3,552 2.4%
Scott County 84,925 +897 (+1.1%) 2,151 2.5%
Carver County 59,767 +665 (+1.1%) 1,462 2.4%
Source: DEED Local Area Unemployment Statistics

As previously mentioned, the labor force, in part, consists of those unemployed persons actively searching for work. Over 2023, the Metro Area had approximately 44,900 unemployed persons, which equated to an unemployment rate of 2.6%. This was slightly lower than the statewide unemployment rate of 2.8% and a full percentage point lower than the national annual rate of 3.6%. By county, unemployment ranged from 2.4% in Carver and Washington counties to 2.8% in Anoka County (Table 1).

Industry Trends in the Metro Area

On an annual average basis in 2023, the Twin Cities had 93,760 establishments supplying 1,754,325 covered jobs. This is according to DEED's Quarterly Census of Employment and Wages (QCEW). Total annual payroll for the region equaled $137.4 billion, with the average annual wage equal to $78,364. That was the highest of the six planning regions in the state.

Health Care & Social Assistance is the Metro Area's largest-employing industry sector with 291,689 covered jobs at 13,854 establishments. Manufacturing is the second largest with 175,817 covered jobs at 4,031 establishments, and Retail Trade ranks third with 154,854 covered jobs at 8,263 establishments. Altogether, those three industries account for over one-third (35.5%) of the Metro Area's total employment. Other large-employing industry sectors with over 100,000 jobs in the region include: Educational Services; Accommodation & Food Services; Professional, Scientific, & Technical Services; and Finance & Insurance (Table 2).

Management of Companies is the major industry sector with the highest average annual wage in the Metro Area, at $141,856. Other industries with significantly higher average annual wages include Finance & Insurance ($140,920); Mining ($135,356); Utilities ($134,056); Professional, Scientific & Technical Services ($121,680); Information ($112,944); and Wholesale Trade ($106,184). The industries with lower average annual wages include Accommodation & Food Services ($29,120); Retail Trade ($41,184); Agriculture ($43,992); and Other Services ($49,556).

Table 2. Twin Cities Metro Area Industry Statistics, Annual 2023 Sorted by Number of Jobs
Industry Number of Establishment Number of Jobs Share of MN Jobs Total Payroll ($1,000s) Avg. Annual Wage
Total, All Industries 93,760 1,754,325 60.4% $137,438,190 $78,364
Health Care & Social Assistance 13,854 291,689 57.0% $18,810,573 $64,428
Manufacturing 4,031 175,817 54.0% $15,587,650 $88,660
Retail Trade 8,263 154,854 54.6% $6,381,791 $41,184
Educational Services 2,415 134,138 58.3% $8,632,091 $64,168
Accommodation & Food Services 6,498 132,817 58.7% $3,870,211 $29,120
Professional, Scientific, & Technical Services 12,307 126,045 75.0% $15,333,156 $121,680
Finance & Insurance 5,087 103,848 73.8% $14,641,763 $140,920
Administrative & Support Services 4,622 88,559 68.0% $4,776,070 $53,924
Construction 7,121 80,018 56.0% $7,338,998 $91,832
Wholesale Trade 5,287 78,820 59.1% $8,371,123 $106,184
Management of Companies 1,035 77,570 86.7% $11,000,111 $141,856
Transportation & Warehousing 2,173 77,550 67.7% $5,587,550 $72,072
Public Administration 807 74,495 54.3% $5,928,651 $79,560
Other Services 11,436 55,509 61.5% $2,750,482 $49,556
Arts, Entertainment, & Recreation 1,879 34,429 66.3% $1,898,837 $55,380
Information 2,042 30,049 62.3% $3,395,003 $112,944
Real Estate & Rental & Leasing 4,447 27,000 76.2% $1,973,863 $73,164
Utilities 112 6,932 48.0% $927,646 $134,056
Agriculture 306 3,614 15.5% $158,361 $43,992
Mining 39 569 9.9% $74,261 $135,356
Source: DEED Quarterly Census of Employment and Wages (QCEW)

DEED's QCEW data also zooms in on more detailed industry levels. At the 3-digit North American Industry Classification System (NAICS) level, the largest-employing industries in the Metro Area in 2023 include: Educational Services (134,138 jobs); Professional, Scientific & Technical Services (126,045 jobs); Food Services & Drinking Places (118,388 jobs); Ambulatory Health Care Services (91,575 jobs); Administrative & Support Services (84,465 jobs); Social Assistance (80,539 jobs); Management of Companies (77,570 jobs); Hospitals (66,539 jobs); Merchant Wholesalers, Durable Goods (53,184 jobs); and Nursing & Residential Care Facilities (53,034 jobs). These finer levels of industry analysis provide for a more complete understanding of what makes the Metro Area unique.

Overall, the Metro Area accounts for three-fifths (60.4%) of Minnesota's total employment. Along with analyzing those in-depth industries with high levels of employment in the region, we can also analyze industry concentrations. This type of analysis, using location quotients, points to those industries that are especially concentrated in the Metro Area. Over 20 detailed industry subsectors in the Metro Area have location quotients of 1.2 or more, while also providing more than 2,000 covered jobs. All these industries have more than 70.0% of their respective statewide employment right within the Metro Area (listed in order based on highest location quotient):

  • Petroleum & Coal Products Manufacturing
  • Air Transportation
  • Management of Companies
  • Performing Arts, Spectator Sports, & Related Industries
  • Securities, Commodity Contracts, & Other Financial Investments & Related Activities
  • Computer & Electronic Product Manufacturing
  • Warehousing & Storage
  • Insurance Carriers & Related Activities
  • Support Activities for Transportation
  • Miscellaneous Manufacturing
  • Rental & Leasing Services
  • Administration of Housing Programs, Urban Planning, & Community Development
  • Real Estate
  • Professional, Scientific, & Technical Services
  • Internet Service Providers, Web Search Portals, & Data Processing Services
  • Administration of Economic Programs
  • Chemical Manufacturing
  • Couriers & Messengers
  • Publishing Industries
  • Personal & Laundry Services
  • Museums, Historical Sites, & Similar Institutions
  • Social Assistance

Altogether, these highly concentrated industries account for over 550,000 jobs in the Metro Area. Most of these industries are high-paying as well, with half of them paying out average wages of over $100,000.

Table 3. Metro Area Industry Trends, Annual 2019 – 2023 Sorted by Number of Jobs
Industry Number of Jobs, 2023 2019 – 2023 Job Change 2022 – 2023 Job Change
Numeric Percent Numeric Percent
Total, All Industries 1,754,325 -22,114 -1.2% +24,269 +1.4%
Health Care & Social Assistance 291,689 +12,742 +4.6% +12,183 +4.4%
Manufacturing 175,817 +2,756 +1.6% +1,148 +0.7%
Retail Trade 154,854 -9,964 -6.0% +1,035 +0.7%
Educational Services 134,138 -1,018 -0.8% +2,722 +2.1%
Accommodation & Food Services 132,817 -8,277 -5.9% +5,729 +4.5%
Professional, Scientific, & Technical Services 126,045 +72 +0.1% -894 -0.7%
Finance & Insurance 103,848 -11,228 -9.8% -2,713 -2.5%
Administrative & Support Services 88,559 -8,726 -9.0% -4,635 -5.0%
Construction 80,018 +4,305 +5.7% +1,706 +2.2%
Wholesale Trade 78,820 +1,689 +2.2% +629 +0.8%
Management of Companies 77,570 -1,338 -1.7% +1,535 +2.0%
Transportation & Warehousing 77,550 +3,753 +5.1% +318 +0.4%
Public Administration 74,495 +1,390 +1.9% +2,711 +3.8%
Other Services 55,509 -1,836 -3.2% +1,936 +3.6%
Arts, Entertainment, & Recreation 34,429 -2,098 -5.7% +1,514 +4.6%
Information 30,049 -5,173 -14.7% -1,300 -4.1%
Real Estate & Rental & Leasing 27,000 -448 -1.6% +129 +0.5%
Utilities 6,932 +710 +11.4% +437 +6.7%
Agriculture 3,614 +541 +17.6% +116 +3.3%
Mining 569 +36 +6.8% -37 -6.1%
Source: DEED Quarterly Census of Employment and Wages (QCEW)

The Metro Area gained nearly 24,300 jobs between 2022 and 2023. The corresponding annual employment growth rate of 1.4% was slightly behind the statewide employment growth rate of 1.7% during that period. By industry, the biggest gains over the year were in Health Care & Social Assistance (+12,183 jobs), Accommodation & Food Services (+5,729 jobs) and Public Administration (+2,711 jobs). Large job gains were also experienced in: Other Services; Construction; Management of Companies; Arts, Entertainment, & Recreation; Manufacturing; and Retail Trade. Overall, 15 of 20 major industries in the Metro Area added jobs between 2022 and 2023. Employment losses were experienced in Administrative & Support Services; Finance & Insurance; Information; Professional, Scientific, & Technical Services; and Mining (Table 3).

Even with the recent growth, the Metro Area is still down just over 22,100 jobs from 2019 to 2023. The corresponding employment decline of -1.2% was slightly behind the statewide employment growth rate of 0.1% during that period (Figure 2). Overall, 10 of 20 major industries are above their pre-COVID levels of employment. These industries include Health Care & Social Assistance, Construction, and Transportation & Warehousing. The industries experiencing the most significant declines during that period include Finance & Insurance, Retail Trade, Administrative & Support Services, Accommodation & Food Services and Information.

Metro Area Annual Employment Trends

By county, employment growth rates between 2022 and 2023 were slightly higher for Scott (+2.6%) and Carver County (+2.1%) and slightly lower for Dakota (+1.1%) and Hennepin County (+1.2%). Between 2019 and 2023, employment growth rates were led by Scott (+10.6%), Washington (+5.9%), Anoka (+3.3%), and Carver County (+1.9%). Employment losses during that period were experienced for Ramsey (-3.3%), Hennepin (-2.5%), and Dakota County (-2.0%).

Along with those employment trends by industry and geography, we can also analyze demographic shifts in the Metro Area's labor market over time. Utilizing the Census Bureau's Quarterly Workforce Indicators (QWI) program, data reveals the region's aging and diversifying labor force. For example, between the second quarters of 2019 and 2023, the number of Metro Area jobs held by workers 65 years of age and older increased by 15.6%, even while total employment in the region declined by 1.3% during that period.

Meanwhile, where the number of jobs held by workers reporting as white declined by 3.3% between the second quarters of 2019 and 2023, all other race and ethnic groups witnessed growth. The number of jobs held by workers reporting Hispanic or Latino origin surged by 15.7%, compared to a 12.2% jump for workers reporting Two or More Races, a 6.7% increase for Black or African Americans, a 6.2% rise for workers reporting as Asian or Other Pacific Islander, and the number of jobs held by workers reporting as American Indian or Alaska Native increased by 5.9%.

Hiring Demand in the Metro Area

As the Metro Area's industry employment continues to recover the losses experienced during the COVID-19 recession, employers across the region are looking for workers to fill both new and replacement openings. According to DEED's Job Vacancy Survey (JVS), there were over 78,300 job vacancies in the Metro Area during 2023. This level of demand was down about 20%, or just over 20,000 job vacancies, from the historically high levels witnessed in 2022. Despite this drop in hiring demand over-the-year, job vacancies reported in 2023 are still higher than average and are similar to the rising levels of hiring demand experienced in the regional labor market pre-COVID. In fact, the more than 78,300 job vacancies reported by Metro Area employers in 2023 were the fifth highest number of average annual vacancies recorded since DEED's JVS data first became available in 2001.

Metro Area Job Vacancy Trends

While hiring demand lessened over the year, comparing Metro Area job vacancies to the number of unemployed persons reveals the continued tightness of the labor market. The 0.6 unemployed persons per job vacancy in 2023 matches the number of unemployed persons per job vacancy in 2018 and 2019, meaning there are still nearly two vacancies for every one unemployed job seeker (Figure 3).

Health Care & Social Assistance led all industries in the Metro Area with nearly 20,500 job vacancies during 2023. In fact, this industry accounted for over one-quarter (26.1%) of the region's total job vacancies. Retail Trade and Accommodation & Food Services each had over 10,000 job vacancies during 2023. Altogether, these three industries accounted for well over half (56.0%) of the Metro Area's total job vacancies (Figure 4).

Other industries with a high share of job vacancies in the region include Manufacturing, Educational Services, Professional & Technical Services, Finance & Insurance and Wholesale Trade. It should be noted that the Metro Area accounted for over half (56.3%) of Minnesota's total job vacancies in 2023. Those industries with higher shares of job vacancies in the region included Finance & Insurance (86.9% of Minnesota's total job vacancies), Management of Companies (82.3%), Professional & Technical Services (79.9%), Real Estate & Rental & Leasing (66.6%), Information (64.5%) and Wholesale Trade (63.4%).

DEED's JVS data also reveals the occupational groups and specific occupations with the most hiring demand in the Metro Area. The major occupational groups with the most job vacancies in the region in 2023 included Food Preparation & Serving Related occupations, Sales & Related occupations, and Healthcare Practitioners & Technical occupations. Altogether, these three occupational groups accounted for over one-third (38.4%) of the region's total job vacancies. Other occupational groups with a high number of job vacancies included Healthcare Support, Office & Administrative Support, Business & Financial Operations, and Transportation & Material Moving occupations.

Metro Area Job Vacancies by Industry

The specific occupations with the most job vacancies in 2023 included Retail Salespersons, Fast Food & Counter Workers, First-Line Supervisors of Food Preparation & Serving Workers, Personal Care Aides and Registered Nurses. For the total of all vacancies, the median hourly wage offer was $20.47 (Table 4). Of all vacancies, 27% were for part-time work, 5% were temporary or seasonal jobs, 50% required one or more years of work experience and 39% required some level of post-secondary education. Job seekers and employers can utilize the job vacancy data to look up these specific characteristics by industry, occupational group, and occupation.

Table 4. Metro Area Occupational Demand, 2023 Sorted by Number of Job Vacancies
SOC Code Occupational Title Number of Job Vacancies Median Hourly Wage Share Part-Time Work Share Requiring Postsecondary Education
000000 Total, All Occupations 78,325 $20.47 27% 39%
412031 Retail Salespersons 4,025 $15.64 46% 4%
353023 Fast Food & Counter Workers 3,443 $14.35 52% 0%
351012 First-Line Supervisors of Food Prep & Serving Workers 2,820 $18.42 6% 2%
311122 Personal Care Aides 2,592 $16.76 36% 3%
291141 Registered Nurses 2,488 $36.11 41% 98%
411011 First-Line Supervisors of Retail Sales Workers 1,696 $19.41 18% 9%
412011 Cashiers 1,587 $15.82 43% 5%
537065 Stockers & Order Fillers 1,442 $16.08 49% 9%
311131 Nursing Assistants 1,432 $18.13 51% 31%
434051 Customer Service Representatives 1,218 $17.91 20% 12%
259045 Teaching Assistants, Except Postsecondary 950 $18.16 55% 26%
132011 Accountants & Auditors 945 $32.01 6% 96%
436013 Medical Secretaries & Administrative Assistants 936 $19.96 47% 34%
911111 Internships 902 $19.86 21% 88%
352021 Food Preparation Workers 870 $16.98 35% 0%
151252 Software Developers 867 $45.20 0% 83%
352014 Cooks, Restaurant 853 $16.97 38% 3%
319092 Medical Assistants 815 $19.15 16% 53%
292061 Licensed Practical & Licensed Vocational Nurses 800 $25.93 30% 98%
499071 Maintenance & Repair Workers, General 776 $20.94 8% 14%
Source: DEED Job Vacancy Survey

Conclusion

The Twin Cities Metro Area continues to experience very tight labor market conditions. Throughout 2023 and the beginning months of 2024, unemployment remained low, even as more workers joined the labor force. And while hiring demand dipped between 2022 and 2023, vacancy levels remain high, especially in industries like Health Care & Social Assistance, Retail Trade, Accommodation & Food Services and Manufacturing. Analyzing these trends reveals a regional labor market in constant motion. This is especially true as the Metro Area continues to recover from the impacts of the Pandemic Recession, and as the labor market continues to witness rapidly shifting demographics.

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