Demographics Of Labor Shortage In Minnesota

Tom Gillaspy, State DemographerMinnesota Planning

January 2001

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Annual Average Unemployment Rate

St. Paul California Minnesota U.S.

Minnesota's Unemployment Rate Is Low And Falling

2600

18300

22500

-4200

-9000 -4000 1000 6000 11000 16000 21000 26000

Working Age

Labor Force

Employed

Unemployed

Number of People

Change In Ramsey County Workforce 1990-2000

14.5%

11.5%

7.1% 7.3%

12.4%

0.0%

5.0%

10.0%

15.0%

20.0%

1950-60 1960-70 1970-80 1980-90 1990-00

Percent Change

Population Change In Minnesota Increased In The 90s

Most come from neighboring states, Texas, California, and Illinois.

Minnesota's migration depends not only on conditions here but also those of our trading states.

These conditions have been very favorable for Minnesota since the mid 1980s

-30000

-20000

-10000

0

10000

20000

30000

40000

Net Migrants

Minnesota Is Riding A Wave Of In-Migration Since 1987

-2.6%

-12.4%

12.6%

-8.4%

36.2%

9.8%

16.9%

-20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0%

Preschool, 0-4

K-12, 5-17

College, 18-24

Young worker, 25-44

Older worker, 45-64

Younger old, 65-79

Older old, 80+

Projected Percent Change

Minnesota's Population Is Aging: Projected Population 2000 to 2010

1.7% 1.7%

1.1%

1.8%

1.5%

1.1%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Employment Labor Force Population 16+

Average Annual Change 1950-99 Column 2

Minnesota Employment Growth In The 90s Is Similar To Growth Since

1950 But It Is Faster Than Labor Force or Working Age Population

62%64%

67%

70%

74%76%

62%

65%68%

77%

82%

85%

50%

55%

60%

65%

70%

75%

80%

85%

90%

1950 1960 1970 1980 1990 1999

US Minnesota

Employment To Population 16-64 Ratio

Growth In The Working Age Population Is Projected To Slow

1.0%

1.1%

0.9%

-0.1%

1.1% 1.1%

0.9%

0.2%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1950-98 1990-98 2000-10 2010-20

Average Annual Percentage Change in

Population 16+

Minnesota State Government Workforce Is Aging Rapidly

0%

1%

2%

3%

4%

5%

Under

20 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65

+

Percent of State Workforce

1984 1994 2000

The shortages appear to be greatest at the highest and lowest skill level occupations.

As higher wage jobs become available, people tend to move from the lower wages jobs to the higher wage ones, further aggrivating the shortages in the lower wage occupations.

This process should place upward pressure on wages and benefits in the lower wage jobs, unless there exists barriers to increasing wages.

Increasing Shortages In Lower Wage Occupations

Improve wages, benefits and working conditions especially to retain existing workers as well as to attract new ones.

Make use of new sources of labor, such as welfare recipients, retirees, disabled, and immigrants.

Increase per worker productivity. Includes making existing workers more productive as well as hiring or promoting people from lower wage jobs.

Some Possible Business Responses To Labor Shortage