An interesting article in the Minnesota Reformer, “The State of Labor in Five Charts,” piqued our interest. While that article and accompanying charts analyzed labor statistics in the United States, we wondered what we could find for comparable stats in the state of Minnesota. The following is our take on the same article.
Unfortunately, not all data shown in the original article is available for the state. In cases where the data was unavailable, the BBER research team used the closest measures we were able to find.
Figure 1 shows a ratio of unemployed people to job vacancies in Minnesota. As shown in the figure, there were nearly nine unemployed people for every job vacancy in the state in 2009–suggesting a very challenging market for job seekers. By 2018, the number had dropped below one, creating a labor market that favored job seekers rather than employers. In reaction to pandemic stresses, the ratio jumped from 0.8 in 2019 to 1.5 in 2020. This mirrors the national trend, though Minnesota saw a smaller spike than the country did on average.
While the state-level data is only available annually, we can infer from the national-level data what was to be in store for the state in 2021. As of August 2021, the national ratio of unemployed workers per job vacancy had dropped to 0.8, suggesting that fewer people were available to work than there were vacancies. This suggested that the ratio for the state would likely drop again in 2021.
Figure 2 shows the average weekly wage for all workers statewide. As shown in the figure, weekly wages increased from roughly $900 per week (or $22.50/hour) in 2010 to more than $1,200 per week ($30/hour) in 2020.
While wages are expected to rise year-over-year due to factors such as inflation, 2020 saw an upward trend that hadn’t been seen in the past decade. The average year-over-year growth from 2010 to 2019 was 2.7%. From 2019 to 2020, it was 7.6%. This increased growth was driven by gains in the public administration (7.8%), information (9.9%), and other services (11.9%) industries. Other services encompasses things such as repair and maintenance, grantmaking, and personal care. The only sector that did not see growth above 4% between 2019 and 2020 was the natural resources and mining industry, which saw wage increases of only 0.5% during the period.
According to the Federal Reserve Bank of Atlanta, wage growth in the West North Central region of the country (which includes Minnesota) in 2021 had averaged 3.5%, which suggested a slight slowing compared with the growth seen between 2019 and 2020. This was still higher than prior years.
Figure 3 highlights the discrepancies in median annual income by race. Median annual income by race in Minnesota generally follows closely to that of the nation, with white and Asian wage earners being above the overall average, and Black, American Indian, and Hispanic or Latino earners falling below. Of significant concern is that the discrepancy between the highest average income (Asians at $79,500) and lowest average income (Black or African American at $37,800) has widened over the past decade. In 2010 the discrepancy was $34,776, and in 2019 that difference was $41,671.
From 2010 to 2019, the gap between white and Asian earners widened, while the gap between American Indian and Alaska Native and black earners narrowed. These same trends were also seen at the national level.
Note: Race terminology is from the U.S. Census Bureau.
Figure 4 shows the percentage of Minnesota workers who are members of a union, from 2001 to 2020. As shown, the percentage declined steadily from 2001 to 2012, plateauing at 14.2% until 2016. In 2020, Minnesota saw an uptick in union membership, reaching 15.8%–the highest percentage of union workers since 2008. Compared to the national figures, Minnesota has had a higher percentage historically and still does today. Nationally, there was no plateau, and union participation percentages were lower overall.
Since 2019, Minnesota’s labor force participation rate (LFPR) saw sharp fluctuations, as shown in Figure 5 below, especially between March 2020 and June 2020–the height of the COVID-19 pandemic. The LFPR peaked in July 2020 at 71.8% and then proceeded to decline until reaching its lowest point of 66.9% in January of 2021. The drop coincided with the first COVID lockdown in Minnesota, followed by something of an overcompensation as the lockdown eased. By September 2020, the LFPR returned to its pre-COVID value but then continued to decline for another four months. Since January 2021, the labor force participation rate has remained at historically low levels, fluctuating between roughly 67% and 68%, compared with its previous average of roughly 70%.
