Latest Posts





May employment report: Minnesota needs more productive jobs

Today saw the release of Minnesota’s jobs figures for May. Our state’s unemployment rate edged down to 3.7%, matching a post-recession low point last seen in June 2015. But, for the first time since January, Minnesota lost jobs. Taken together, this means people left the workforce. Another concern was the pattern of job losses. There is a slight correlation between GDP per job in each sector and jobs lost per sector. In other words, more productive sectors lost more jobs.

Productivity in Minnesota

In the Center’s 2016 report “Minnesota’s Economy: Mediocre Performance Threatens State’s Future“, we looked at which sectors of our economy generated the most GDP per head. The leader was Mining & Logging with $366,429 of GDP generated per job. In last place, with $43,933 of GDP generated per job, was Leisure & Hospitality.


May’s jobs numbers and productivity

So its good news that Mining & Logging was one of the three major sectors to register job growth (100 new jobs). But the biggest gaining sector was Other Services (2,100 new jobs) which generated just $60,941 of GDP per job in 2015.

Leisure & Hospitality employment held up. So, largely, did Educational & Health Services (100 job losses). But these sectors generate relatively little GDP per job. Leisure & Hospitality generated $43,933 of GDP per job in 2015, Educational Services $45,343, and Health Care $68,760. In other words, two of the better performing sectors in terms of employment were among the worst performing in terms of GDP generated per job.

This is a longstanding trend. Between 2000 and 2015, Education and Health Services employment grew at a combined rate of 54 per cent, well above the 4.8 percent rate for the total of all non-farm jobs. By contrast, employment in the second fastest growing sector, Professional and Business Services, grew by 17 per cent over the period. As a result, in April, for the first time, more Minnesotans — 538,800 — were employed in Education and Health Services than in any of the other sectors.

Minnesota needs more productive jobs

As I’ve written before, this is in no way to denigrate jobs in these sectors. Health and education are vital. Leisure and hospitality are mainstays of the economy in vast swathes of Minnesota.

But to have high quality hospitals and schools and to be able to afford that week in the cabin Up North, we need high productivity, high wage jobs. This is key for the state’s economic future. Keep an eye on the data.

John Phelan is an economist at Center of the American Experiment.




Upcoming Events

  • Morning in Minnesota Breakfast Series Featuring Isaac Orr

    Location: The Oaks at Eagle Creek 1000 26th Ave NE Willmar, MN 56201

    Please join Center of the American Experiment on Tuesday, August 27th at The Oaks at Eagle Creek for breakfast with Center policy fellow and energy expert, Isaac Orr. Following his discussion of his new report, Doubling Down on Failure: How a 50 Percent by 2030 Renewable Energy Standard Would Cost Minnesota $80.2 Billion, Isaac will be joined by Rep. Tim Miller, Rep. Dave Baker, and Sen. Andrew Lang for a conversation about renewable energy standards in Minnesota. Tuesday, August 27, 2019 The Oaks at Eagle Creek 1000 26th Ave NE, Willmar, MN 56201 7:30 AM Breakfast & Check-In 8:00 AM Presentation…

  • Fall Briefing Featuring Kimberley Strassel

    Location: Ordway Center for the Performing Arts 345 Washington Street, St. Paul, MN 55102

    Purchase Tickets Here

    Register Now