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What does data on job openings say about Minnesota’s labor market?

This week, the Department of Employment and Economic Development released data from the Job Vacancy Survey covering the second quarter of 2019.


It showed that there were 146,513 job vacancies in Minnesota in that period. This was up by 7% from 136,917 in the fourth quarter of 2018. What does the tell us about the much discussed ‘tightness’ – or otherwise – of Minnesota’s labor market? Are we about to max out our supply of workers?

How many Minnesotans really aren’t working?

Over the fourth quarter of 2018, the number of unemployed Minnesotans averaged 87,643, so there were 1.6 jobs available for each unemployed worker. In the second quarter of 2019, there were an average of 102,380 unemployed Minnesotans, so there were 1.4 jobs available for each unemployed worker. This suggests a tightening labor market.

But remember how the working age population breaks down. You can think of it as

Working age population = In labor force + Not in labor force


In labor force = Employed + Unemployed

In the second quarter of 2019, there were 1,331,474 working age Minnesotans not in the labor force. Not only were they not working, they weren’t even looking for work and, so, weren’t part of that 102,380 counted as unemployed.

This sounds pretty bad. It is 30.1% of the state’s working age population not working or looking for work. Is this ‘slack’ in the labor market? Who are these folks and why are they not working or looking for work?

Those who do want a job

The most recent data from the Bureau of Labor Statistics (BLS) tells us that, nationally, 94.4% of those persons not in the labor force ‘Do not want a job now’. That means that 5.6% of them would take a job, which, applied to Minnesota, means 74,563 workers.

60.9% of these people did not search for work in previous year despite wanting a job. The statistics offer no explanation for this, so feel free to speculate. The rest had searched in the previous year, but not in the last four weeks. 24.9% of these aren’t available for work now for whatever reason. The other 75.1% are ‘Marginally attached’, which the BLS explains is “those who want a job, have searched for work during the prior 12 months, and were available to take a job during the reference week, but had not looked for work in the past 4 weeks.” 29.9% are discouraged over their job prospects, 8.6% have family responsibilities preventing them from looking, 8.2% are in school or training, and 9.1% are suffering ill health or disability.

Those who don’t want a job

But the big prize is that 94.4% of those persons not in the labor force who ‘Do not want a job now’ which, applied to Minnesota, means 1,259,911 potential workers. That seems like plenty of slack in our labor market. So why don’t these folks want jobs?

Given that 61.7% of them are over 55 years of age, retirement would seem to be one answer. There is some good news here. As we explain in our forthcoming report on the prospects for Minnesota’s labor market, since 2000, the percentage of Minnesotans aged 55 to 64 in employment has risen by 9.5 percentage points and by 4.5 percentage points for those aged over 65. In the first category we have done better than the national average (up 5.4 percentage points) but in the latter we have done worse (up 6.5 percentage points). We have room for improvement here.

Looking to the future

Minnesota’s population is forecast to age in the coming decades. All else being equal, this means a smaller share of Minnesotans working. And, all else being equal, this means lower per capita GDP. Getting some of those retired workers back into the labor force could pay real economic dividends.

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




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