Southeast Planning Region: The Graying of Southeastern Minnesota
By Brent Pearson
June 2011
PDF of article
Like much of the country, southeastern Minnesota is slowly aging. How that will affect the region’s labor market in the next decade remains to be seen.
Southeastern Minnesota and its workforce are growing grayer. The number of people 55 and older in the region grew 16.6 percent from 2000 to 2009, while the overall population was increasing 5.2 percent during roughly the same period.
The biggest percentage gains in workers 55 and older from 2007 to 2009 were in Wabasha County, which was up 3.8 percent, and Freeborn County, up 3.2 percent. That compares with the overall region, which saw the 55 and older workforce grow 0.8 percent.
Mower County, meanwhile, lost 0.8 percent of its 55 and older workforce from 2007 to 2009, and Rice County lost 2.7 percent in that group[1] The counties with the lowest median ages were Winona (33.5 years) and Olmsted (35.7 years) (see Graph 1).
While the overall population and workforce are slowly aging, the largest group of workers in the 11-county region in 2009 was still between the ages of 25 and 44, according to the U.S. Census Bureau’s American Community Survey (ACS).
So what do these data tell us? The bulk of the labor force in the region is between 25 and 55 years old — a positive sign — but a storm may be on the horizon.
Where Are the Youth?
Labor force participation rates from 2009 cast a murky outlook. Young people from 16 to 19 had the lowest labor force participation rates (58.7 percent), particularly in the most populated counties of Olmsted, Rice, and Winona (see Table 1). By the time the 2020 census results are tabulated, workers currently 45 to 54 years old will be in the 55- to 64-year-old category. Some, no doubt, will retire, thus lowering the labor force participation rate for the largest group of potential workers. Moreover, those currently 55 to 64 years old will be largely retired by 2020.
Table 1
|
Labor Force Percent Participation Ages 16+
|
|
Age
|
Dodge
|
Fillmore
|
Freeborn
|
Goodhue
|
Houston
|
Mower
|
Olmsted
|
Rice
|
Steele
|
Wabasha
|
Winona
|
SE
MN
|
|
16 to 19
|
50.8%
|
59.9%
|
62.3%
|
62.8%
|
65.5%
|
61.9%
|
58.2%
|
55.5%
|
63.8%
|
64.2%
|
54.9%
|
58.7%
|
|
20 to 24
|
91.9%
|
83.3%
|
87.3%
|
87.8%
|
89.2%
|
88.4%
|
83.9%
|
74.3%
|
91.1%
|
90.9%
|
80.3%
|
83.3%
|
|
25 to 44
|
90.7%
|
89.9%
|
86.1%
|
89.9%
|
89.8%
|
88.5%
|
87.6%
|
84.1%
|
88.9%
|
90.1%
|
87.0%
|
87.8%
|
|
45 to 54
|
89.9%
|
89.7%
|
86.4%
|
90.7%
|
92.7%
|
86.2%
|
88.3%
|
85.6%
|
89.1%
|
90.4%
|
90.9%
|
88.7%
|
|
55 to 64
|
82.3%
|
73.2%
|
74.4%
|
70.0%
|
72.8%
|
69.4%
|
74.0%
|
73.4%
|
77.0%
|
74.1%
|
73.7%
|
73.6%
|
|
65 to 74
|
34.0%
|
31.8%
|
26.3%
|
30.8%
|
28.7%
|
23.4%
|
26.9%
|
24.2%
|
33.1%
|
32.0%
|
31.6%
|
28.4%
|
|
75+
|
5.4%
|
6.4%
|
4.3%
|
5.2%
|
9.5%
|
5.1%
|
7.5%
|
3.5%
|
6.6%
|
4.9%
|
6.8%
|
6.0%
|
|
Source: U.S. Census Bureau, 2005-2009 American Community Survey
|
The 2009 ACS estimates are a good indicator of what lies ahead. In 2009 the labor force participation rate for people 55 to 64 dropped from 88.7 percent to 73.6 percent. That drop-off represents the second sharpest decrease among all age groups. The largest drop off? The 65- to 74-year-old group lost 43.9 percent of its labor force as those workers shifted into retirement. In a nutshell, while the labor force is aging, stronger participation rates in the 16- to 19-year-old group as it shifts to the 20- to 24-year-old bracket will be essential to avoid large losses in the labor force over the next five to 10 years.
Unemployment Rates Tell All
The key question, though, is whether 16 to 19 year olds will find jobs as they enter the labor force in southeastern Minnesota in coming years. Recent history suggests 15 percent of workers 55 and over will retire or drop out of the workforce as they move into the next age bracket, creating potential openings for younger workers[2]
At the same time, young workers in southeastern Minnesota and across the country are facing a difficult labor market with high unemployment. While the situation will likely improve over the next 10 years, it is difficult to predict how this will impact future labor force participation rates for the 20- to 24-year-old workers of 2020.
This problem is not unique to southeastern Minnesota, but it does pose a potential obstacle to short-term stability in the region. One concern of rural communities is losing their young people to higher-paying jobs in the Twin Cities. A hopeful sign is that southeastern Minnesota fared relatively well during the recession, due in part to its strong health care sector. That might be good news for future labor force stability throughout the region.
1]Numbers calculated based on U.S. Census Bureau’s American Community Survey (ACS) 2007 and 2009 data.
[2]ACS, 2005-2009, five-year estimates.
Top