Workforce shortage constrains growth in Duluth area

DULUTH – The Duluth area saw a sharp recovery in hospitality-industry jobs last month but still has a long way to go to reach pre-pandemic employment and workforce participation levels.

Between January and February, the Duluth metro area — St. Louis, Carlton and Douglas (Wis.) counties — gained 2,800 jobs, according to state figures released this week. The majority of the jobs were in restaurants, hotels and bars.

That 2% rise was also the largest percentage increase out of any metro area in the state, a welcome trend after the region led Minnesota in job declines at various points throughout the past year.

"Duluth does not tend to have that distinction often," said Carson Gorecki, regional labor analyst with the Minnesota Department of Employment and Economic Development. "That said, total employment is still down 6.5% over the year. There is still room to grow."

The number of folks working increased greater than the labor force, a key metric counting all those working and looking for work that remains 3% below February 2020 levels.

"We're pulling from the ranks of those who were unemployed and weren't looking for jobs at all," Gorecki said. "It's the second month in a row we've had an increase in the labor force. It's the start of a trend, we hope."

In Duluth last month, the jobless rate was 4.1%, while the unemployment rate in Superior was 4% as of January, the most recent month available from the Wisconsin Department of Workforce Development.

The labor-force decline in the region remains a major driver of lower unemployment rates.

As vaccinations increase and in-person schooling resumes, more workers sidelined by the pandemic — women and people of color have been especially affected — could return to the workforce. For employers in Duluth, it can't come soon enough.

"If you talk to any employer who is hiring right now they will tell you they're not getting enough applicants," said Elena Foshay, the city's director of workforce development. "I'm optimistic there are more jobs and lots of employers hiring, but if we can't fill those jobs then our economy isn't going to recover."

Foshay said employers are in need of skilled workers, such as CNAs at hospitals, or those who can train on the job, like at Cirrus Aircraft, which is undergoing a "huge expansion," she said.

The city is also putting together a drive-through job fair for the hospitality industry, where many jobs don't require experience or specialized training, in April.

"They had to lay off huge numbers at the start of the pandemic and are essentially starting from scratch," she said. "They're really struggling to hire."

One of the biggest challenges keeping employers from growing is a severe lack of housing in the region.

"A number of employers are doing everything they can to recruit workers," Foshay said. "Then those folks end up turning jobs down because they can't find housing."

Brooks Johnson • 218-491-6496