Minnesota faces a labor growth slowdown. This data helps explain why.
Minnesotans have celebrated a decade of Labor Days since the end of the Great Recession in 2009, and the news for workers of late has largely been good.
Most people who want a job have one, with the state's unemployment rate floating around 3.4 percent. Meanwhile, nearly seven in 10 working-age Minnesotans either have or are looking for jobs, ensuring employers have a robust talent pool from which to hire.
Yet economists, academics and business leaders have been sounding alarm bells. Over the next ten years, Minnesota is forecast to have far fewer people entering the labor force than previous decades — a problem for employers, who may have problems filling critical jobs as baby boomers retire and others drop out of the workforce.
“It’s definitely a major issue for employers in the state,” said Cameron Macht, a regional analysis and outreach manager at the Minnesota Department of Employment and Economic Development, “and looking forward it may become an even bigger deal.”
Minnesota's looming labor shortage has been the subject of news coverage, studies and boardroom anxiety for years. But a Star Tribune analysis of nationwide Census data shows in more detail who is leaving the labor force and why they might be so difficult to replace.
According to the data, about 30 percent of working-age Minnesotans are not looking for jobs. So who are these labor force dropouts, and what's driving them from the working ranks?
Many are in Greater Minnesota, where in some counties nearly half of the adult population has dropped out of the workforce. Although many Minnesota counties have higher workforce participation than other places nationwide, the Iron Range is replacing workers more slowly, due largely to an aging population.
More than half of the state's workforce dropouts are 65 and older — a number that is likely to increase as more baby boomers reach retirement age.
Nearly six in 10 are women. Among those staying home, lack of sufficient childcare could be of concern, Macht said, and Census data shows about a quarter of married couples with children under 18 reported at least one spouse outside the workforce.
More people also have disabilities, according to the U.S. Bureau of Labor Statistics, which may prevent them from looking for jobs.
Foreign-born populations also affect these rates, as they accounted for both a 60 percent jump in labor force growth from 2007 to 2017 but a 25 percent increase in those outside the workforce.
Making less impact on labor force rates are those in correctional facilities, which only describes about 20,000 incarcerated Minnesotans, along with individuals in nursing homes, college dorms or the armed forces, all of whom are excluded from the numbers. Though, it's worth noting they may have greater presence in some counties than others.
Those who leave prisons with criminal records too may face difficulty and discouragement when seeking work.
Yet, there are some encouraging trends, as data shows fewer people are discouraged by their job prospects than the past decade, according to the U.S. Bureau of Labor Statistics, while more are seeking education; those with associate’s degrees or higher being more likely to find employment.
"Many of the workers who are leaving our labor force won’t be coming back," Macht said, "meaning employers cannot and should not ignore anyone who wants to work but is facing barriers."