Minnesotans getting back to work but labor force still faces long road to full recovery

According to the Minnesota Department of Employment and Economic Development (DEED), Minnesota gained 11,000 jobs in March, making this the “sixth straight month that Minnesota has seen job growth.” Moreover, our labor force participation rate ticked up 0.02 percentage points from 67.9 to 68.1 percent.

Minnesota gained 11,500 jobs, up 0.4% in the last month on a seasonally adjusted basis following the addition of 13,000 (revised up from 5,200) jobs in February 2022, according to numbers released today by the Minnesota Department of Employment and Economic Development (DEED). The private sector gained 11,000 jobs, up 0.4% following the addition of 12,800 (revised up from 5,100) jobs in February. This is the sixth straight month that Minnesota has seen job growth.

Minnesota’s labor force participation rate rose from 67.9% to 68.1% and the unemployment rate ticked down two-tenths of a point to 2.5% in March 2022 from 2.7% in February 2022, a tie with its lowest level ever recorded, in February 1999. The decline over-the-month was entirely due to people moving from unemployment to employment. Nationally, the labor force participation rate ticked up 0.1% to 62.4% and the unemployment rate fell two-tenths of a percentage point to 3.6%.

“It’s good news for Minnesota that more people are returning to the labor force as job growth continues to surge,” said DEED Commissioner Steve Grove. “However, many Minnesotans who want to work are not connecting with stable employment. DEED is working to build bridges between employers and communities that are too often overlooked – workers of colors, workers with disabilities, and new immigrants – to empower the growth of the Minnesota economy for everyone.”

Minnesota lost 417,600 jobs from February through April 2020 and has since gained 315,900 jobs as of March 2022, or 76% of the jobs lost on a seasonally adjusted basis. The private sector has regained 310,900 jobs, or 80% of the jobs lost.

The U.S. gained 431,000 jobs, up 0.3% from February to March 2022, with the private sector adding 426,000 jobs, also up 0.3% on a seasonally adjusted basis.

It certainly is good news that people are getting back into the workforce, but the rate at which our labor force is recovering is concerning considering that one of the reasons Minnesota ranks highly on income is due to our high labor force participation rate.

Policy reform can help

Fortunately, as I have written before, there are a couple of steps our legislators can take to help get more Minnesotans in the workforce. The historic $9.3 billion surplus especially presents a unique opportunity to slash taxes to encourage high-skilled, high-earning workers to stay and work in the state. It could also help attract more workers from outside the state.

Legislators should also work faster to replenish the State Unemployment Insurance Tax to ensure that employers are not burdened with higher taxes any longer. Additionally, loosening occupational licensing laws could help encourage low-income Minnesotans to move into lucrative occupations, which they are currently being kept out of due to stringent licensing requirements.

The coronavirus pandemic has been a turning point, with a lot of states enacting major reforms cutting taxes and regulations. Minnesota risks falling behind and becoming even less competitive if our legislators do not take action.