Labor Market Information Office Minnesota’s Labor Markets: What’s in Store? Steve Hine Research...

Labor Market Information Officewww.deed.state.mn.us/lmi

Minnesota’s Labor Markets:What’s in Store?

Steve Hine

Research Director

Labor Market Information Office

MN DEED

November 13, 2008


In the short term, a slowing economy …

Minnesota began to slow before the nation

Weakness has been across all sectorsOur low unemployment advantage has

diminished or disappearedForecasts are of further weakness over

the next couple yearsLabor market slack may reach historic

highs


Employment since the last recessionEmployment Level (March 2001 = 100)

97

98

99

100

101

102

103

104

105

2001 2002 2003 2004 2005 2006 2007 2008

US Jobs LevelMN Jobs LevelTC Jobs Level

- Recession -

4 years

47,000 job gap


Compare that to the 1990sEmployment Level (July 1990 = 100)

95

100

105

110

115

120

125

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

US Jobs Level

MN Jobs Level

- Recession -

500,000 job gap


Over-the-year growth rates are lower …

-2

-1

0

1

2

3

4

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

MN OTY Job Growth Rate US OTY Growth Rate

2.3%

0.4%


… and forecasted to go even lower

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Forecast

Source: Global Insight US Economic Outlook, November 2008

About 60,000 jobs in MN


Annual Job Growth – Past, Present and Future

-8

-6

-4

-2

0

2

4

6T

ota

l

Re

so

urc

es

&

Min

ing

Co

ns

tru

cti

on

Ma

nu

fac

turi

ng

Tra

de

, T

ran

s &

Uti

l

Info

rma

tio

n

Fin

an

cia

l

Ac

tiv

itie

s

Pro

& B

us

Se

rv.

He

alt

h &

Ed

Le

isu

re

Oth

er

Go

ve

rnm

en

t

Past Year

Next Year

2001 Recession Year


Job Declines = Rising Unemployment Rates

0

2

4

6

8

10

12

1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

US Unemployment Rate MN Unemployment Rate

Source: Global Insight US Economic Outlook, November 2008

8.3%


…And More Unemployed Seeking Work

0

50,000

100,000

150,000

200,000

250,000

1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

244,000


More People Filing for Unemployment Benefits …

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Initial Claims

SK Claims 29,07330,691

16,721


… and receiving and exhausting benefits

30,000

35,000

40,000

45,000

50,000

55,000

60,000

2005 2006 2007 2008

3,000

3,500

4,000

4,500

5,000

5,500

6,000Weeks Paid (left scale)

Exhaustions (right scale)

40%

30%


The short run bottom line?

If current forecasts are accurate, Minnesota will:Lose about 60,000 jobs between the end of

2007 and the end of 2009Add an additional 70,000 unemployed persons

to the current 175,000Reach all-time highs in the number

unemployed and UI claimants, recipients and exhaustees


We face different challenges in the long term

Significant slowing in our labor force growth

A much older workforceA more ethnically diverse workforceSevere labor shortages rather than

surplusesNew challenges in matching worker skills

and job requirements


Growth in labor force will slow …

0

2

4

6

8

10

1980-1985 1985-1990 1990-1995 1995-2000 2000-2005 2005-2010 2010-2015 2015-2020 2020-2025 2025-2030 2030-2035

707,000 Workers

226,000 Workers


… and it could be worse if participation doesn’t improve

60

62

64

66

68

70

72

74

76

1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006

Minnesota

United States


What does it mean?Between 2005 and 2010, MN is averaging

about 30,000 new workers per year.This will slow to 23,000 between 2010

and 2015, 14,000 between 2015 and 2020, and 3,000 per year between 2020 and 2025.

Our economy will grow at one-tenth its current rate in 15 years, and won’t pick up much for at least ten years afterward!


Growing older workers, shrinking younger ones

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

2005-2010 2010-2015 2015-2020 2020-2025 2025-2030 2030-2035

55+

35-54

16-34


Change in age cohorts over next 20 years

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2005 2010 2015 2020 2025 2030 2035

-10,000

+27,000

+207,000+225,000

-38,000

-600


Responding to an older workforce

Almost all labor force growth will be in the older cohort

One in three of the workforce of 2035 are already of working age today

The P-16 “pipeline” of skilled workers will shrink dramatically

“Re-skilling” existing workers will become more crucial


Where will these workers work?Industry projections 2006 to 2016

-10%

-5%

0%

5%

10%

15%

20%

25%

Tota

l

Nat

ural

Res

ourc

es

Con

stru

ctio

n

Man

ufac

turin

g

Trad

e, T

rans

port

&U

til

Info

rmat

ion

Fina

ncia

l Act

iviti

es

Prof

and

Bus

Serv

ices

Ed a

nd H

ealth

Leis

ure

Oth

er

Gov

ernm

ent


Over 3 new jobs in 10 will be in Health Care

-40,000

-20,000

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000N

atur

alR

esou

rces

Con

stru

ctio

n

Man

ufac

turin

g

Trad

e, T

rans

port

& U

til

Info

rmat

ion

Fina

ncia

l Act

iviti

es

Prof

and

Bus

Serv

ices

Ed a

nd H

ealth

Leis

ure

Oth

er

Gov

ernm

ent

Labor Market Information Office Minnesota’s Labor Markets: What’s in Store? Steve Hine Research...

Documents

Transcript of Labor Market Information Office Minnesota’s Labor Markets: What’s in Store? Steve Hine Research...