Minnesota leaders debate how to tackle state's historic workforce shortage

Minnesota's economy is rebounding from COVID-19, but its recovery is still missing a key ingredient: workers.

The most recent data show more than 205,000 job vacancies across Minnesota, a record high over the past two decades and a problem that's touching every sector. Worker shortages are particularly acute in health care, food service and other industries hit hardest by the pandemic.

"It's really universal. There's not a business that I talk to in the state that is not facing a workforce challenge," said Department of Employment and Economic Development Commissioner Steve Grove. "COVID was a big accelerant of a lot of these trend lines. Now the problem we face is: How do we turn this around?"

As employers struggle to find workers, leaders in both parties say the historic $7.7 billion projected surplus creates an opportunity to tackle the state's workforce problems this year. Legislators are proposing sweeping solutions: connect every home to the Internet, invest in higher education and workforce training for the jobs of the future, streamline hiring and sweeten benefits packages to entice people back to work.

But they'll have to work through a deep philosophical divide between their plans, with Republicans broadly favoring tax cuts to attract and retain businesses and workers in the state and Democrats arguing better pay and benefits would accelerate the pace of return to work.

Democrats propose to spend $1 billion on checks to reward and retain workers on the frontlines of the pandemic, and DFLers in control of the state House want to use $1.6 billion of the surplus to set up and pay for two years of a paid family medical leave program.

"If businesses are looking for workers, it's awfully hard to find them when parents can't be there because they are taking care of kids or when they've got adults in their lives that they have to look after," said House Majority Leader Ryan Winkler, DFL-Golden Valley.

They're running into pushback on that plan from Republicans leading the Senate, who favor relief checks for a smaller pool of workers and are instead pushing permanent income tax cuts. Both Republicans and DFL Gov. Tim Walz also want to spend $2.7 billion to fully replenish the state's unemployment insurance trust fund, which was drained by requests during the pandemic. Quick action would stave off a payroll tax increase on businesses.

"We've got to make Minnesota a great place to invest, not only for people who are starting businesses but for people to come here and raise their families," said Sen. Eric Pratt, R-Prior Lake, who chairs the chamber's jobs and economic development committee. "You can't come for the weather and stay for the taxes."

When it comes to gaps in specific industries, there's more overlap than disagreement between the two parties. Both sides want to address shortages in health care workers and police officers while tackling accessibility and the high cost of child care, which has been a barrier for many to get back to work.

Many parents stopped working during the pandemic as they juggled distance learning for their kids and finding affordable child care. Democrats are pushing for increased reimbursement rates paid to child care providers through the state's Child Care Assistance Program and want to allow more people to qualify for that aid.

"We are talking about seeking out those who are unemployed but we also need to think about those who have left the workforce completely," said Rep. Mohamud Noor, DFL-Minneapolis, chair of the House's workforce development committee. "Many parents have quit their jobs; now how can we get them back into the labor force?"

To address a shortage of police officers, Senate Republicans rolled out a $65 million law enforcement recruitment and retention package last week, including $1 million for the Department of Public Safety to launch an advertising campaign to promote law enforcement and funding to help cover education and training costs for people who want to become an officer.

"If we don't have enough police — and it's a risky profession — we're going to have to pay more," said Sen. Paul Gazelka, R-East Gull Lake, who is sponsoring a bill to offer a $10,000 signing bonus to new police officers as part of the package. "We knew there was a workforce shortage, but the number one priority we need to place it on is making sure we have an adequate number of police officers ... to make sure our communities are safe."

Walz's supplemental budget proposal includes student loan aid and other incentives to try to encourage more people to become police officers, and House Democrats said they plan to roll out their own plan to retain and recruit officers and diversify police forces.

The quickest action both parties could take this session, however, is on the immediate shortage of direct care and health care workers. Walz has touted the success of his administration's recent program to recruit 1,000 new nursing assistants by the end of January using American Rescue Plan dollars to pay for the students' tuition, textbooks, uniforms and exam fees.

His budget attempts to scale up that experiment, supporting tuition-free paths to get more people into health care while putting another $115 million toward supporting Minnesota's caregiver workforce and $66 million over three years into boosting the state's health care workforce. Democrats in the Senate and House also rolled out a plan last week to create a new student loan forgiveness program for nurses and address mental health concerns for those in the industry.

"This health care worker shortage is not going to instantly get better when COVID starts to ramp down," Walz said on the opening day of the legislative session last week. "That's why we put things in our budget around medical health education to get folks involved in that career."

During a panel with Walz and the top legislative leaders last week, nearly everyone agreed that addressing workforce shortages must be on the agenda this year, but Senate Minority Leader Melisa López Franzen, DFL-Edina, added that lawmakers can't lose sight of the fight against COVID-19.

"End this pandemic," she said, "and we'll have a better shot in our workforce."

Staff writer Jessie Van Berkel contributed to this report.