As Duluth's economy reopens, where are the workers?

The local economy is as open as it has been during the COVID-19 pandemic, but many area workers continue to stay home.

"No one has ever seen a moment like this with high unemployment and high job vacancy at the same time," said Elena Foshay, Duluth's director of workforce development. "It's definitely a puzzle."

Between February and March, the Duluth metro area — St. Louis, Carlton and Douglas (Wis.) counties — lost 230 jobs, or 0.2%, following last month's increase, according to state figures released last week. Meanwhile the labor force declined by nearly 1,400, or 0.9%.

The overall pool of available workers is still below pre-pandemic levels, making it hard for employers to hire, said Carson Gorecki, regional labor analyst with the Minnesota Department of Employment and Economic Development. "The theory is as confidence returns, people return to the workforce so it runs against the theory, at least for now."

Foshay and Gorecki pointed to several reasons that likely contribute to high unemployment and job vacancies. Even though vaccination rates are increasing and in-person schooling has largely resumed, people still fear COVID-19 exposure. Some who were laid off at the start of the pandemic chose not to return to the workforce, especially women. Many are staying home to care for children who continue to distance learn or are home because of an outbreak at school. Others are retiring early, especially if they have medical conditions that put them at a higher risk should they contract COVID-19 and some are waiting to be called back to jobs they lost, aided by unemployment benefits.

"If you want to look for a job, now is a great time," Foshay said. "Every employer hiring is struggling right now."

The unemployment rate for March in the Duluth area is 5%. Overall employment in 2020 is down 7.6% from 2019 levels — the largest decline among all Minnesota metropolitan areas.

Duluth resident Aaron Newberry attended a drive-through job fair on the Duluth Entertainment Convention Center parking lot Tuesday as part of a CareerForce hospitality hiring week. Applicants filled out universal applications for the more than 50 interested employers and could select who they wanted to see theirs.

Newberry has a job, as a shift manager at a local McDonald's, but he's looking for something more "personalized" at a hotel or restaurant. He had a good feeling about the fair.

"I'm married and have a 15-month-old at home," he said. "I want to better my opportunities."

The leisure and hospitality industry, after noticeable gains the first two months of the year, showed only a slight uptick this past month.

Josh Stotts, who owns Sir Ben's Tavern on the Lake in Duluth, knows a lot of restaurants are nervous about staffing as the busy summer months approach.

"The restaurant industry is always fickle, feast or famine," he said. "Throw a pandemic on top of it and you have a very large labor shortage."

Jana Hollingsworth • 218-508-2450