Rock County has Minnesota's lowest unemployment. What's its secret?

LUVERNE, Minn. — It seems that everyone who can work in Rock County and Luverne, its county seat, is working.

"Oh, like me?" asked Jane Lanphere, executive director of the Luverne Area Chamber of Commerce in the county seat. "I'm 70."

In the state that just recorded the lowest unemployment rate in U.S. history, the place with the lowest unemployment is this county in the southwestern-most corner bordering Iowa and South Dakota.

In a rural area with an older population, employers need every person they can get. So the ones in Rock County have gotten creative, especially as its unemployment rate fell below 1% for a time earlier this year. In July, the latest data available, it was 1.4%.

Minnesota's jobless rate hit 1.9% last month after spending two months at the all-time low of 1.8%.

Some employers around Luverne are busing in workers from Sioux Falls, S.D., and recruiting others from Worthington, both about 30 miles away. Others are paying for the vocational training of teenagers to keep them from moving to South Dakota.

Many business also tout part-time schedules to lure people, like parents with young children or retirees, off the sidelines. About 40% of Rock County's residents between 65 and 74 are employed, well above the state average of 28%.

"If you've got somebody that wants a job, we can usually find a place for them," said Gary Papik, owner of a car dealership in town. "Each one of them has a unique thing that 'I only want to work this many hours or I can't work these days.' So you have to be flexible and work with them."

At Papik Motors, a crew of about eight retirees works a few days a week picking up and delivering cars that need servicing around town, often making trips to Sioux Falls or even further out.

"I had to do something," said Dave Shelton, 73, as he waited in the garage for his next delivery. "There's only so many times you can mow your lawn in one week."

Luverne, a town of 4,900 along Interstate 90, is known for its pink rock quarries and for being featured in a Ken Burns documentary about World War II.

Its businesses were adjusting to worker shortages long before the aftermath of the pandemic made them a national issue.

"I always tell folks, 'Pay attention to what's going on in southwest Minnesota," said Luke Greiner, regional analyst for the Minnesota Department of Employment and Economic Development.

The area felt the demographic shifts of an aging population before the broader state and then began to rely on an influx of immigrants, mostly Latinos, to fill its factories. But it also recovered faster from both the 2008 and 2020 recessions.

"The rest of the state, eventually, at least in the last decade, has caught up to it," Greiner said.

"Help Wanted" signs are a common sight around Luverne — at the EconoLodge, Taco John's, Casey's gas station, and at WildFlowers, the coffee shop on Main Street.

In some cases, the labor crunch also is translating to reduced service. The 75 Diner near the highway is now closed on Tuesdays. A note in the window says it's only temporary, but the sign has been up since early June.

Rock County has a heavier concentration in manufacturing and health care than the rest of the state, which didn't see as many job losses in the pandemic as some other industries. Neighboring Iowa and South Dakota also placed fewer restrictions on businesses compared to Minnesota during the pandemic.

"We probably were the region in the state that shut down the least," said Carrie Bendix, executive director of the Southwest Minnesota Private Industry Council. "So you have that coupled with the competition, primarily from Sioux Falls, for workers."

Still, even with very few unemployed workers, Rock County also has managed to pull off what not many other parts of the state have done: It now has more jobs than before the pandemic.

That's largely due to Premium Minnesota Pork, a hog processor that opened in June 2020.

Premium Iowa Pork purchased the facility from Pilgrim's Pride, which shuttered its poultry plant with 200 workers in 2017. It renovated the building for about 18 months, pouring more than $25 million into it. Then the pandemic hit.

"We weren't sure what to do," said Dan Paquin, the company's president. "We went ahead and started the plant anyway."

It started hiring in May 2020 and had about 280 workers on staff when it started production the following month, he said. It has been expanding operations since then and now has about 485 employees.

Some of the workers live in and around Luverne, but most come from Worthington and Sioux Falls, where JBS and Smithfield run much larger meatpacking plants.

"We sit in the middle of them and I think we pick up employees that don't want to work at the big shops anymore," said Paquin, adding that being a smaller, family-owned workplace has been the biggest draw.

Premium Minnesota Pork offers a daily bus service for workers coming from Sioux Falls for a minimal fee, though Paquin noted that many workers prefer to drive themselves.

Luverne Mayor Pat Baustian said the plant's day shifts appealed to people who had worked the night shifts at the plants in Worthington and Sioux Falls. And the line speed is also slower than at the other two industry giants, he said.

"I think they've been successful in getting their workforce that way," he said.

Minnesota Premium Pork is now planning a $70 million expansion, which would bring another 80 to 100 or jobs to Luverne.

In addition, Lineage Logistics also is building a large freezer warehouse for meat storage that is expected to open next spring and employ another 60 to 80 workers.

Meanwhile, Sanford Health, which runs a 25-bed hospital in Luverne, is recruiting farther afield to fill its numerous job openings. It recently hired lab technicians from the Philippines.

As the city's economy is growing, Luverne officials are focused on addressing the town's housing and daycare shortages. On a tour around town, Baustian pointed out two new 27-unit apartment buildings that are set to open this fall as well as a site the city purchased to house a child care center with slots for 180 children. Officials are hoping to receive federal funds to cover renovation costs and plan to partner with a nonprofit to run it.

"We want more workers to move here," Baustian said. "We want them to be a part of our community."

In the last several years, Luverne employers have watched as some young people moved to South Dakota after being been wooed by the Build Dakota Scholarship that started in 2015.

The scholarship covers two years of vocational school training in in-demand fields such as nursing, construction and manufacturing. In exchange for free tuition, students must agree to stay in South Dakota and work in that field for at least three years.

Officials in southwest Minnesota want the state to come up with a competing program and tried to get a bill passed in the Minnesota Legislature this last session.

But Luverne electrician Scott Loosbrock isn't waiting around for lawmakers in St. Paul. He started his own scholarship program, as other business owners in Luverne — plumbers, auto body shops — have also done.

He's already paid for Brody DeBates, who interned with him while a senior in high school, to take vocational training in Sioux Falls. And now he's doing the same for three more students to help build his workforce.

"I probably would have ended up working in South Dakota, but then he offered to pay," said DeBates, 21, who now works for Loosbrock full-time.

The students signed contracts saying they'll work for Loosbrock for five years when they're done — and if they decide to leave before that, they've agreed to pay him back.

"In five years, hopefully they will want to stay here in Luverne," Loosbrock said.