Unemployment is at another historic low but 72,000 workers are still missing from the workforce

According to the Department of Employment and Economic Development (DEED), as of June 2022, Minnesota’s unemployment is at an all-time low rate of 1.8 percent. Certainly, low unemployment is usually a good thing.

But Minnesota’s low unemployment rate comes with some bad news.

“Another month has brought another record-low unemployment rate, as more Minnesotans are finding opportunity in our economy,” said DEED Commissioner Steve Grove. “The big challenge is a historically tight labor market – we’re still down just over 72,000 people in our labor force since before the pandemic. We’re continuing to grow DEED’s Summer of Jobs campaign to highlight job market opportunities, and to help employers find workers in labor pools they may have previously overlooked.”

As of January 2020 — the pre-pandemic period — 70.8 percent of Minnesota’s population was in the labor force. But since the beginning of 2021, Minnesota’s labor force participation rate has hovered around 67 and 68 percent — with no signs of budging.

It’s not just that Minnesota hasn’t recovered a lot of workers. Minnesota also fares relatively bad when compared to other states on labor force recovery.

Generally, while most states have nearly recovered their pre-pandemic labor force participation rates, Minnesota is still missing 2.3 percent of its workers when compared to January 2020.

Only 8 other states have seen a bigger loss than Minnesota.

Source: Bureau of Labor Statistics

https://mn.gov/deed/newscenter/press-releases/#/detail/appId/1/id/534492

Minnesota is not doing too well when compared to its neighbors either — with the exception of Iowa. Wisconsin and South Dakota have all recovered their pre-pandemic workforce. North Dakota’s workforce is only 0.3 percentage points smaller.

Yes, Minnesota’s unemployment rate is very low. But our shrunken workforce is no reason to celebrate. The fact that our labor force participation rate is still not budging should be a reason for concern.

All is not well with Minnesota’s labor market.