Asher Tholl, an employee of Schmitty & Sons, steps off a bus he was cleaning at the Minnesota Valley Transit Authority in Eagan Monday. He is one of four students with disabilities that the firm hired this summer as it reached deeper into the labor pool at a time when Minnesota’s unemployment rate has dropped to the lowest level recorded by any state. (Kavita Kumar | Star Tribune/The Minnesota Star Tribune)

Minnesota has not only moved up a spot in the rankings to have the lowest unemployment rate in the nation. At 1.8%, it also now officially has the lowest of any state ever.

"Just think about that," said Steve Grove, commissioner of the Minnesota Department of Employment and Economic Development (DEED). "We have the lowest unemployment rate that has ever existed in the United States of America since that number has been recorded."

That's largely a good thing for workers, giving them options and putting upward pressure on pay and benefits. It's also forcing employers to look deeper into the labor pool for workers.

On the flip side, it means higher costs for employers, which can translate into higher prices for goods and services. Ultimately, that may slow the growth of Minnesota's economy.

Grove took note of the record during a visit Monday to a Minnesota Valley Transit Authority parking garage in Eagan, the latest stop for DEED's "Summer of Jobs" campaign.

The agency this summer has been highlighting people who tend to be overlooked for jobs — older workers, immigrants, people with disabilities and those recently released from correctional facilities — as a solution to the state's tight labor market.

Minnesota's jobless rate had been hitting record lows in recent months but trailed Nebraska for the lowest rate in the country.

When Minnesota's June rate came out last Thursday, it was half the national rate of 3.6% and DEED officials conjectured the state may have passed Nebraska for lowest rate.

On Friday, they confirmed that was the case when the Bureau of Labor Statistics released the full list of state data. That also showed Minnesota has the lowest jobless rate ever recorded since the BLS started tracking it in 1976.

One of Minnesota's major challenges is that its labor force of nearly 3 million has about 73,000 fewer workers than it did before the pandemic. There are now more than two job openings for every unemployed person in the state.

With wages going up, however, employers may soon slow the rate of hiring. And interest rates are also rising as the Federal Reserve tries to tamp down inflation. Many economists expect a jump in unemployment later this year as employers make tradeoffs because of higher costs for workers and capital.

The focus of Monday's event was hiring people with disabilities, who tend to have higher unemployment rates than the general population.

"Many are ready, willing and able to work," said Grove. "They're great problem solvers. They've been spending their whole lives solving problems."

DEED offers pre-employment transition services for people with disabilities through partner organizations in which students get some training and exposure to jobs. The aim is to ensue each student has at least one paid work experience before they graduate. That helps them build skills and confidence — and their resume —so they can land future jobs, said Dee Torgerson, DEED's director of vocational rehabilitation services.

She encouraged employers to reach out to DEED if they would like to connect with workers with disabilities.

Burnsville-based Schmitty & Sons, a contractor that works with MVTA, recently hired four students with disabilities to deep-clean buses this summer.

Allie McCullough, Schmitty's director of human resources, wasn't sure how she was going to fill those positions after some of the college students she hired in previous summers moved on to other jobs.

So she was excited when she got an e-mail from Great Work, one of DEED's partners that runs a transition program, about giving students a tour of the company. Even better, she had four jobs to offer them that pay $16 an hour.

"They've been awesome employees," said McCullough. "We would have been scrambling until the last minute I think finding people to work this summer. So it's been great."

One of the students, Asher Tholl of Burnsville, said the job is not that hard, aside from dealing with the "grit and grime."

"It's easy and simple work," Tholl said. "And the pay is good, which is always a plus."

He plans to work as a janitor at his dad's veterinary clinic once he's done with the summer job.

Chelsie Gibbs, founder and director of Great Work, noted that the state has historically relied on segregated work options or sheltered workshops to employ people with disabilities. So having people with disabilities in "community jobs" is somewhat new for many employers. Organizations like hers can help with the transition, she said.