Insights: Susan Brower (left), pictured with Laura Kalambokidis (right) said, “There are still many people who could be enticed to return—or to stay—in the labor force.”
Deciphering the Data
Minnesota’s state economist and demographer offer strategies and insights on how to keep the region’s economy strong.
By Gene Rebeck | Photography by John Linn
Some things never change: Minnesota remains a hard-working state with a diverse economy that once again has proven its resilience following a recession. At the same time, the state is changing—and fast. According to the Minnesota State Demographic Center:
• The state’s total population is estimated to exceed 6 million by 2032, and will grow to nearly 6.8 million by 2070.
• People of color are projected to make up 25 percent of the state’s population by 2035, compared to 14 percent in 2005.
• The under-18 population will grow modestly, gaining about 32,000 between 2015 and 2035. Meanwhile, the state’s 65-plus population will grow much more rapidly, adding more than half a million people during those same years. By 2035, the 65-plus age group is expected to eclipse the under-18 population for the first time in Minnesota’s history.
Where does Central Minnesota fit into the complex story these data tell? Laura Kalambokidis, Minnesota’s state economist, and Susan Brower, state demographer, shared their insights and interpretations.
Question: What are Central Minnestoa's biggest economic opportunities?
LK: There’s population growth. And having a range of industries to choose from for jobs is an asset in the area. It’s not dependent on any one industry.
SB: One of the biggest economic opportunities that lies ahead is how well we incorporate every last person in a rapidly changing economy that is increasingly reliant on technology. This has been our biggest opportunity for some time, perhaps. But it seems to me that our demographics are now bringing us to a new critical point in our history in which there won’t be any room to leave anyone behind.
Our projections show the workforce in the Central Minnesota Planning Region is expected to grow modestly between 2015 and 2025. After that, we expect the number of workers will decline until at least 2030. Many other regions in the state will see a decline in the number of workers beginning immediately.
Question: Are there positive suprises that you didn't expect when it comes to the region's economy?
LK: I was surprised to see that Central Minnesota has a slightly higher labor force participation rate than the rest of the state. That speaks highly of the area’s ability to use its labor pool. Hard-working people live in Central Minnesota. And businesses are creating jobs that people want.
SB: We have seen more labor force participation by young people than we had anticipated. But I do have concerns about this trend in the longer term.
Question: How can te region address the worker shortage?
LK: It would be valuable for Central Minnesota to “attract back” young people from the region who leave for their higher education. Every community needs to continue to be a place that people choose to live in and to start businesses in. So communities need to identify the assets that contribute to quality of life, then invest in those assets.
SB: Be willing to let go of the old way of doing things. There are still many people who could be enticed to return—or to stay—in the labor force if salaries, benefits, work schedules and educational opportunities are flexible enough to meet their needs.
Question: We have a lot of people retiring. How does that affect the region?
LK: There’s a smaller share of the workforce that has defined benefit pensions now. So they may be working longer to make sure they have enough money saved up. I see that as an opportunity for employers to address worker shortages. Employers that get creative with scheduling, technology and telecommuting may be able to retain those older workers longer.
SB: At age 65, Minnesotans can expect on average to live another 20 years. Fifteen of those on average will be healthy, disability-free years. That’s a lot of time to recreate and to be productive inside and outside the formal labor market. The region benefits to the extent that older adults remain engaged in productive work—whether it be tutoring or mentoring young people informally, or working on a part-time or contract basis.
Question: What kind of degrees should students pursue?
LK: In Central Minnesota—and across the state—health care is one of the industries that is going to continue to grow, and it has a large number of vacancies now. What’s interesting about health care is that there is a wide range of possible ways to participate. There are jobs that require a great deal of education, like a doctor or a nurse. And there are jobs that don’t require as much education, like personal care assistants. Then there are jobs in the middle that may require some technical training—maybe a four-year degree, maybe not.
Manufacturing is another area that has job vacancies now in Central Minnesota. Those jobs also have a range of ways to get in—without a whole lot of training, or some technical training, or more education for management-type jobs.
SB: Focus on gaining technical skills, because they will be more transferable as the economy changes, or as what you love to do changes. The Minnesota Department of Employment and Economic Development has some great online tools showing the industries and occupations where the most growth is likely to occur, where the supply of workers is lagging, and where earnings potential is high. Whether students choose two-year or four-year degrees will depend on the circumstances of the individual. But we shouldn’t think of education as a one-time experience that we undertake in our late teens to early 20s and never return to.
Question: What about wages? Some data show they aren't rising.
LK: Actually, the wage growth in Minnesota exceeds the wage growth in the United States. The labor market is tighter in Minnesota than in the nation as a whole, so I think we’re seeing wage growth sooner. That’s what you’d expect from a supply-and-demand point of view.
Also, when you have a high demand for labor and supply growth is slow, then businesses that are trying to fill positions might turn to technology in order for the people that they do have to be able to produce the same amount. When worker productivity increases, wages go up as well. We’re already seeing some of that in Minnesota.
Question: Immigration to Central Minnesota has offset other population declines. Has that trend changed in recent months?
SB: We don’t yet have the census data that would allow us to see how immigration has changed in recent months, but we do know from early administrative records that Minnesota has seen a decline in the number of refugee arrivals. What I can say with certainty is, eventually, Central Minnesota will need immigrants to grow. It’s just how the math works out. If immigrants do not find a welcome home in the communities of Central Minnesota, the population in the region will eventually decline, and that could have consequences for the long-term economic vitality of the region.
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