The lessons of Prohibition in Minnesota
One hundred years ago today, the 21st Amendment to the Constitution was ratified, the first line of which read: The eighteenth article of amendment to the Constitution of the United…
Quite recently the Minnesota Department of Employment and Economic Development (DEED) released a report showing the number of job vacancies and unemployment in Minnesota. According to the report, as of June this year –– end of second-quarter –– Minnesota had yet the highest vacancy rate in about 20 years.
According to DEED, “employers in Minnesota reported more than 205,000 vacancies as they struggled to fill open jobs.” And compared to the second quarter of last year, vacancies were up 84% and compared to the second quarter of 2019, they were up 40%. On the other hand, the number of “unemployed workers is down 59% compared to the second quarter of 2020, and up only 33% compared to the second quarter of 2019.”
While worker shortage is an issue affecting the rest of the state, it is much worse in greater Minnesota. As a new article by MinnPost reports,
In Red Wing, which relies on tourism and manufacturing as key drivers of the economy, job openings haven’t been confined to any one industry, said Michelle Larson, executive director of the region’s local Chamber of Commerce. “It’s kind of all over the board,” she said.
One iconic local business, the historic St. James Hotel in Red Wing, has more than 25 food and service openings right now and had about 62 open jobs over the summer on a team of roughly 150 in peak season. Jennifer Olson, the food and beverage director for the hotel, said one of the hotel’s two restaurants is open five days a week instead of seven. The other was turned into a bar that’s open just three days a week and doesn’t offer food.
“I don’t have anybody to serve (food) or cook it,” Olson said.
Employers in Red Wing are far from alone. Job vacancies have hit record highs in Minnesota, and they’re affecting employers in every corner of the state. But as data from the Minnesota Department of Employment and Economic Development shows, the job market is particularly tight in Greater Minnesota — and is likely to remain that way even after the COVID-19 pandemic subsides.
While this has something to do with COVID-related issues, the shortage of workers, according to some researchers, also has something to do with recent demographic trends. Greater Minnesota, like the rest of the state, has been growing. Unfortunately, its labor force has been aging quite quickly compared to the metro region. The pandemic has only worsened this issue, especially with many people exiting the labor force.
Job vacancy rates have been higher than that in most Minnesota regions for years and are now most pronounced in Greater Minnesota. And while the tight labor market isn’t new, it has gotten worse since the pandemic began. Minnesota’s labor force participation rate — which measures the percent of the population age 16 and up that is working statewide — has dropped from more than 70 percent pre-pandemic to 67.9 percent in September. That’s the lowest it’s been since the late ’70s, when fewer women were in the workforce.
“[Employers] still have demand for their services. They’re just having a really hard time finding available workers to fill those roles,” said Cameron Macht, acting assistant director of the labor market information office at DEED.
Between 2017 and 2019, there was less than one job seeker per job vacancy in Minnesota. Now, it’s closer to two jobs for every person looking. “It’s just unprecedented. It’s not what you would normally see coming out of a recessionary period,” Macht said.
In Southwestern Minnesota, a region with one of the highest job vacancy rates, according to a September report by DEED, companies like HyLife, a pork producer, and the Toro Company, have added tons of jobs to the region in recent years, said Drew Hage, the executive director of the Windom Economic Development Authority.
Many jobs available in the Windom area pay a living wage and offer vacation time and benefits, Hage said.
To a large extent, resolving worker shortages would depend on how the nation recovers from the pandemic. But as a state, we face a bigger issue, considering that American’s Experiment’s newest report shows that Minnesota loses workers to other states due to high taxes. So there is definitely something that can be done at the state level to invite more workers into the state to ease our worker shortage as we recover from the pandemic.
Among other things, legislators can look into lowering tax rates and loosening labor laws like occupational licensing in order to attract out-of-state workers.
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The legislature appropriates more money, the unions grab it for salaries, the school board cuts middle school band, and everyone blames the legislature for underfunding. Rinse and repeat.