Can northern Minnesotans rely on seasonal tourism jobs?

Yesterday, I wrote about how jobs in leisure and hospitality – tourism – pay far less than jobs in mining in northern Minnesota. People who say that mining should be blocked and that folks up there should just get by with tourism jobs are asking them to take a pretty hefty blow in terms of lost income.

But pay disparities aren’t the only problem. We might all enjoy visiting the north of the state in the summer. There are far fewer people trekking north in the middle of winter. What happens to all those tourism jobs then? They go.

According to data from the Bureau of Labor Statistics‘ Quarterly Census of Employment & Wages, in St. Louis County employment in Leisure and hospitality peaked in 2018 at 12,478 in July. By December, that number had fallen to 10,862. 1,616 jobs – 13% of the total – had vanished in five months.

Figure 1 puts this seasonality in some context. It uses the average percentage change from month to month from 2001 to 2018 to show how all jobs, all jobs in St. Louis County, all tourism jobs in St. Louis County, and all mining jobs in St. Louis County, change over the course of a year.

Figure 1: Average month to month change in employment, 2001 to 2018, January=100

Source: Bureau of Labor Statistics and Center of the American Experiment

We see that changes in total employment in St. Louis County track changes in total state employment quite closely. We see more variation among the sub-sectors tourism and mining, as we’d expect. But we also see that the average rise in employment from January to July of 20.4% is largely wiped out by December, when the number is just 4.0% higher than the January number, on average. Mining employment, on average, is lower in December than in January, which reflects the long terms decline in Mining employment we noted in our report, The State of Minnesota’s Economy: 2018.

In northern Minnesota, tourism jobs are both (much) lower paid and far more variable that jobs in mining. The two aren’t mutually exclusive, but if the economy of places like St. Louis County is going to thrive, it needs to be able to take its opportunities.

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