Labor Market Updates
Happy New Year! Our regional analysts have put together a new set of blogs for January focusing on various labor force characteristics, including participation rates in the Twin Cities, gains and losses in Central and Northwest, a focus on health care in Northeast and teachers in Southeast, and changing commuting patterns in Southwest. For more information, please reach out to your local Regional Analyst!
According to the U.S. Census Bureau's 2021 American Community Survey (ACS) 5-year estimates, the Twin Cities Metro Area had a labor force size of just over 1,777,000 people in 2021, with a labor force participation rate of 71.6%. Labor force participation rates were highest for those in the prime working age cohorts, between the ages of 25 and 54 years. These rates decline significantly for people between the ages of 65 and 74 years, and especially so for those 75 years of age and older as many of these people retire from working. Labor force participation rates are also typically lower for individuals with reported disabilities, as well as those with less educational attainment.
In the months prior to the pandemic, Central Minnesota was home to just under 410,000 workers, either employed or unemployed and actively looking for work. That was a new monthly high, as the region's labor force had been steadily growing for more than a century, following regional population trends. However, thousands of people left the labor force in the first year after "COVID-19" entered our lexicon. After adding more than 100,000 workers in the 20 years preceding 2020, Central Minnesota's labor force declined 6% from March 2020 to March 2021. The region did see about 6,500 workers enter or come back into the labor force in 2022, averaging just over 392,000 workers through the first 11 months of the year. While this was a significant recovery, Central was still down more than 9,000 workers compared to pre-pandemic levels.
Despite a tough couple of years, Health Care & Social Assistance remains the largest sector in Northeast Minnesota by a fair margin, employing nearly one out of every four workers. That share is down only slightly from a peak in 2020, and the percent employment losses from 2019 to the first half of 2022 were smaller in Health Care & Social Assistance (-6.6%) than for the total of all industries (-7.8%). Employment losses were concentrated in Nursing & Residential Care Facilities and Ambulatory Healthcare Services, which deals primarily with outpatient and clinic activities. And while Health Care job losses slowed somewhat from 2020 into 2022, they accelerated for Nursing & Residential Care Facilities for which burnout and retention have been major concerns.
The defining feature of 2022's labor market was record tightness. Northwest Minnesota saw two new record low unemployment rates set in 2022: dropping to 1.7% in October, edging out the 1.8% record set in May and tied in September. That in turn broke 2021's two previous low records: 2.1% reached in October after 2.4% set just the prior month in September. Before 2021, the record low was 2.7%, first set in October 1999. So, if the 2021 records were extraordinary, 2022's records were astonishing.
Teachers play an essential role in society. Not only do they impact children individually, but they also impact the future workforce. In Southeast Minnesota, about 14,120 people are employed in Educational Instruction & Library occupations. Median annual wages are relatively high for Educational Instruction & Library occupations at $50,024 annually in Southeast. Due to demand, Educational Instruction & Library job vacancies have been steadily increasing in the region since 2011.
Southwest Minnesota has always boasted shorter commute times and a higher percentage of people who work in the same county they live in than the rest of the state, but people living in the region have not benefited as much from the increase in remote work since the pandemic. Recently released data from the 2021 American Community Survey (ACS) from the U.S. Census Bureau shows how remote work trends are impacting workers in our region and state.
Please reach out to your regional analyst if you or your staff would be interested in having a customized LMI training session. We would be happy to accommodate your training requests, either on LMI Data Tools or local economic conditions!
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