Out of four neighboring states, MN beat only Iowa in recovering jobs lost during the pandemic
There has been a lot of focus on Minnesota’s historically low unemployment rate. As of April 2022, the BLS reported that Minnesota’s unemployment rate stood at 2.2 percent. Certainly, this is an impressive rate — when looked at on its own. But as American Experiment research has shown, this number hides a lot of bad news for our state’s economy.
While the unemployment rate is down, Minnesota has lost a lot of workers during the pandemic. Those workers have not come back into the labor force — which is now shrunken. According to the Bureau of Labor Statistics (BLS), in April Minnesota’s labor force had 84,000 fewer workers compared to January of 2020.
Minnesota’s rate of recovering jobs does not bode well, especially when compared to its four neighbors. Among the four states that border ours, Minnesota beat just one — Iowa. Wisconsin, South Dakota, and North Dakota have all recovered jobs at a faster rate compared to MN.
Among its neighbors, Minnesota experienced the highest loss in workers between January 2020 and April 2022. What is even more notable is the fact that Wisconsin, which is quite similar to Minnesota — in terms of labor force size and other factors — has gained nearly 40,000 workers back into the workforce compared to January 2020. In contrast, Minnesota has lost more than double that amount.
Moreover, before the pandemic, Minnesota had a larger workforce compared to Wisconsin. However, those numbers have reversed. Minnesota’s labor force has shrunk while Wisconsin’s has expanded. As of April 2022, Wisconsin’s labor force had 67,000 more workers than Minnesota’s.
Labor Force by State
Change in the Labor Force
Looking at labor force participation rates (LFPR), the story is the same. Wisconsin has fully recovered its labor force. Currently, Wisconsin’s LFPR is higher than its pre-pandemic levels.
While less impressive compared to Wisconsin, North and South Dakota have almost fully recovered. Meanwhile, Minnesota’s LFPR is 2.5 percentage points lower compared to pre-pandemic levels. Only Iowa has performed worse than that.
Labor Force Participation Rate by State(LFPR)
Change in LFPR
The same is true when we look at employment. As of April 2022, Minnesota’s employment was 33,000 lower compared to pre-pandemic levels. Among its bordering neighbors, only Iowa ranks worse in comparison. Wisconsin and South Dakota have higher levels of employment in April 2022 compared to January 2020.
And here again, while total employment before the pandemic was higher in Minnesota compared to Wisconsin, as of April 20202, Wisconsin had surpassed Minnesota.
Employment by State
Change in Employment
Our economy is not doing well
A low unemployment rate is only a positive sign if it is due to people moving into employment. But in Minnesota, that is not the case. Our labor force is much smaller than it was before the pandemic, and so is employment. And worse yet, our recovery looks even bleaker when compared to that of our neighbors — except for Iowa.