Minnesota adds 10,200 jobs, as employers power through shortage of workers

Minnesota is inching closer to running out of people to work.

After Minnesota lost nearly 4,000 jobs in April, economists worried that another sizable decline in May would mean that the state's labor shortage had reached the critical point where it was constraining growth. Instead, employers added 10,200 jobs last month, the biggest jump of the year, the Department of Employment and Economic Development said Thursday.

"It's been awhile since we had a gain this big," said Steve Hine, labor market analyst at DEED.

April's snowstorms likely delayed some hiring that month, particularly in construction and other seasonal jobs, and employers caught up in May, Hine said. Employers in business services, leisure and hospitality and construction did the most hiring.

The state's unemployment rate fell to 3.1 percent, the lowest since July 2000, down from 3.2 percent in April.

Even with the rebound, Minnesota this year has been adding jobs at a slower pace than any year since 2010, when hiring was still affected by the recession that began in late 2007. The slower pace of hiring now is shaped mainly by the difficulty of finding workers, particularly for low-wage jobs.

Last summer, Minnesota reported more job vacancies than job seekers. The nation passed the same milestone last month. But the big jump in May showed that Minnesota employers are still able to find workers. Of the 10,200 new jobs, 9,900 were in the private sector.

"There's no doubt Bloomington is a very competitive market, but we were able to hire over 550 people so I consider that a success," said Angela Reed, general manager at Great Wolf Lodge.

She said the company has a development program that's available even to teenage employees in their first job. Some qualify for scholarships to study hospitality and tourism in college.

"We're a growing company, and we need to have bench strength," Reed said. "The best way to do that is by cultivating the employees you are able to capture."

At CHS Field, home to the St. Paul Saints, the most difficult jobs to fill have been for custodial and cleanup work after nongame events. The irregularity of those events creates a staffing challenge, said Derek Sharrer, general manager for the team.

"Stadium cleanup is not as desirable as some of our other jobs," Sharrer said.

In that case, the state's labor force — around 3 million Minnesotans — would only be able to grow if people who haven't been looking for jobs seek them out or if older workers delay retirement.

"If we're going to sustain growth rates like we have been seeing, we're going to have to see it through higher participation rates," said Hine, the state labor market analyst. Yet Minnesota already has one of the highest labor force participation rates, at 70.6 percent.

Out of the jump of 10,200 jobs last month, about 6,000 were taken by people who hadn't been in the labor force before, likely new graduates from high school and college.

Minnesota's labor shortage began to exert more pressure on hiring last fall, when the state's growth in jobs slipped below the national hiring rate.

For the 12 months ending May 30, Minnesota added 29,188 jobs, up 1 percent. The U.S. added jobs at a rate of 1.7 percent last month. Minnesota has been below the national rate for all of 2018.