Has MN’s Job Market Really “Recovered”?

Despite recent rosy proclamations, the state’s employment picture remains murky.
Has MN’s Job Market Really “Recovered”?

This spring, state officials trumpeted that Minnesota has regained the 160,000-plus jobs lost to the Great Recession and added tens of thousands more, with the labor force breaching 3 million for the first time. Given that declaration, one might assume Minnesota’s labor market has recovered—but digging deeper reveals a more complicated story.

The 3 million figure includes those working or actively seeking work. In fact, Minnesota lost 5,000 jobs in the first four months of 2014, and because the state’s pool of eligible workers has grown, more than 30,000 more unemployed Minnesotans would need to find jobs to return to pre-recessionary market conditions, Steve Hine, director of the Department of Employment and Economic Development’s Labor Market Information Office, told TCB in May. The state is on pace to add those jobs by year’s end, but even then, “the recession has a lingering impact in ways that aren’t fully reflected in top-level numbers,” he said at the time. (New data shows that in May, the state's labor market showed some signs of life, adding about 10,000 jobs, although the size of the labor force dipped back below 3 million.)

As of April, there were more than 141,000 unemployed Minnesotans; nearly three in 10 had been out of work for at least six months. That proportion remains at an all-time high. The term “recovery” is itself problematic: It implies a return to historical conditions, despite contemporary realities. “It’s a comparison that is comfortable, but it’s not a very meaningful benchmark,” posits Aaron Sojourner of the Carlson School of Management’s Center for Human Resources and Labor Studies. “The standard should be: Is the labor market working in a way that matches people with opportunities?”

A major inhibitor to complete recovery is underemployment. Roughly half of working Minnesotans are in jobs that don’t require their level of education or experience, and a new report found that just three in five people who earned a bachelor’s degree in Minnesota in 2011 were employed a year later, most in part-time or temp jobs without benefits. The findings don’t capture self-employment, but they’re sobering nonetheless.

The irony is that experts are still talking of an impending labor shortage. “The more participants we can get on board now, the better we’ll be in the future,” says Hine, “when the labor force becomes increasingly difficult to come by.” In the ’90s, Minnesotans grew accustomed to adding upward of 70,000 jobs annually. By the 2020s, Hine says adding just a few hundred jobs “is not necessarily going to be a bad month anymore.”

Beyond the obvious priorities of improved training and education, both Hine and Sojourner say public policy should focus on better aligning applicants and employers, creating opportunities for workers commensurate with their education, and incentivizing workers to remain productive. For instance, making it appealing for older workers to contribute a few days weekly from home, or improving transportation and child care, which would encourage parents to remain in the labor force.