Minnesota's big economic challenge is where to find people to fill jobs, state demographer says

If every unemployed person in Minnesota were able to find a job, there would still be about 150,000 job openings left unfilled in the state.

So how will Minnesota employers be able to fill those jobs in the coming years?

"It's going to be tough," Susan Brower, the state demographer, said Wednesday at the Minnesota Chamber of Commerce's annual legislator luncheon in St. Paul for its women in business series.

"It's possible, but it's not going to be immediate. And it's not going to be a full solution," she said.

The question is looming large over Minnesota as it faces one of the tightest labor markets and biggest workforce shortages in the U.S. The state's unemployment rate of 2.1% is tied for the lowest in the nation, and job openings in Minnesota outnumber the unemployed by 3.5 to 1, about double the rate as for the U.S.

The state has about 90,000 fewer workers in its 3.1 million labor force than it did before the pandemic. That's not due to the Great Resignation nor to women, who initially were slower than men to return to the workforce but have now mostly fully returned, Brower said. Rather, it's mostly due to retirements among the state's aging workforce, she said.

In a half-hour presentation, Brower showed that while the state's working age population had been "growing like wildfire" over the last several decades, that line is now flattening as the remaining half of Baby Boomers reach the age of 65 in the next decade and as Minnesotans are having fewer children than they did before.

As a result, her office has forecast "almost no growth" in the state's workforce in the years to come.

"The number of people that we have available to work today in Minnesota is very close to the number of people we will have in 10 years, in 15 years, in 20 years unless we see some pretty big changes that we haven't seen in our recent past," she said.

Despite that, Brower sounded optimistic and pointed to potential opportunities, the biggest one being more people moving to Minnesota through a change in domestic and international migration patterns.

At most, about 15,000 immigrants per year have moved to Minnesota in recent years and about 10,000 work. In 2021, that number plummeted. But even if it returns to pre-pandemic levels, it will still "take a very long time for immigration" to fill all of the state's available jobs, she said.

As for domestic migration, Minnesota tends to lose more people — on average 5,000 to 10,000 people a year — than it gains.

"It's not personal," Brower joked. "It's really true of a lot of Midwestern states and Northeastern states that most of the migration tends to go South and Southwest. And most of that is bring driven by college-age or young people."

While domestic movement is not currently working in Minnesota's favor, Brower pointed to climate change as something that could shift the trend from an outflow of people to a potential inflow to Minnesota in the coming years.

"That's a big push factor that may alter the migration patterns that we've seen in the past," she said. "The question is: Will we be ready to receive them and integrate a wave of new residents, of climate migrants?"

In addition, Brower said that there's a small number of people not currently in the state's workforce who may decide to take a job if child care becomes more available, if wages are attractive enough, or if employers offer more flexible work schedules.

"I know not everyone can do this," she said to the bosses in the audience. "But for those of you that can, now is the time to make your jobs as attractive as you possibly can and to compensate your workers as much as you possibly can."

One attendee asked if automation could be another solution to help Minnesota out of its workforce quagmire.

Brower responded that automation is expensive and a "big leap" for some employers. And right now it's mostly best for manual and repetitive tasks, which doesn't fill the needs of many jobs.