A Look at Northwest Minnesota's Future

by Nate Dorr
March 2011

Career planning professionals can add new data to their toolbox with the recent release of 2009-2019 employment projections. Northwest Minnesota is expected to gain 75,089 jobs in this 10-year period, a growth rate of 7.6 percent. This rate is notably lower than previous long-term employment projections for the region and slightly below the state growth rate of 8.7 percent [1]. Employment losses in manufacturing, retail, and construction during the latest recession contributed directly to lower projected employment. Other industries, however, continue to show gains (see Table 1).

The top three employing industries (health care, retail, and manufacturing) will not change from now until 2019. The health care and social assistance sector boasts the greatest growth rate and largest share of workers through 2019. Employment growth in this sector is driven by an increased demand for services by an aging population and a retiring workforce. Retail trade ranks second in employment share for the region but should add only 703 total hires through 2019, a rate of 2.5 percent. This sector is hindered by low consumer confidence following the crippling recession of 2008-2009. The third largest employing sector was the hardest hit during the last three years. Manufacturing forecasts continue to show a decrease of 549 jobs from 2009 to 2019, or a 2.1 percent loss. This follows manufacturing employment losses of 14.2 percent (4,250 jobs) from 2006 to 2009 [2]. Manufactured products such as electronics, textiles, clothing, and transportation equipment, for example, which cost less to produce in low-wage countries, continue to lose ground in the region. This is the only sector in the region with significant projected employment loss.

Projections use historic and national trends to predict future employment. They’re systematic and reliable most of the time, but they can’t take into account every factor that a local expert can. For example, new legislation or the relocation of a major employer can dramatically affect employment. People familiar with the area or industry could predict the effect, but projections may not. Decision making requires a broader view.

Career planning professionals certainly need more than industry trends to guide clients. By focusing on high demand and high pay occupations, students and job seekers can better determine a good career match. Information in Table 2 provides a look at the top 15 occupations in demand with annual pay above the regional median annual salary of $29,872. Again, health care jobs top the list with LPN and RN positions projected to add the most jobs through 2019. A variety of occupations in construction, business, management, and community service also rank as high demand and high pay. Projection data and Minnesota’s Occupations In Demand tool provide a wealth of information about growing opportunities in northwest Minnesota.

Northwest Minnesota employment projections show a similar pattern to other regions of the state. Similarly, labor force projections here show plenty of retirements and older workers. The number of workers in the region 65 years and older will grow by 70.2 percent from 2010 to 2020, compared to 75.6 percent growth for Minnesota [3]. These workers will probably stay in the workforce, and employers will adapt to their changing needs. Meanwhile, highly mobile workers between 16 and 24 years old will shrink by 12.7 percent, slightly more than the 9.1 percent loss at the state level (see Figure 1). The challenge for rural communities in northwest Minnesota is in attracting talented workers to fill those vacancies left by retirees. Small towns without big city amenities are appealing to certain populations like outdoor recreationists. Yet, smaller communities often lack jobs for spouses, making a move difficult for two-income families. Since much of the northwest region is rural, skills shortages are still an issue for local employers.

Major employers in the region contribute greatly to the quality of life in northwest Minnesota. Marvin Windows and Doors in Warroad is not only the town’s largest employer but donates to educational and community programs. Sanford Health continues to expand into the region, operating 17 hospitals and clinics, as well as supporting local activities and community services [4]. Employers like DigiKey in Thief River Falls are struggling to find enough workers and are advertising region-wide for applicants. These three large employers are bellwethers of the northwest regional economy, because they represent the top employing industries in the region.

Small businesses, on the other hand, stand out as major regional players according to county business pattern and job vacancy data. Businesses with less than 10 employees make up 77.2 percent (12,335) of businesses in the region [5]. The small business share of employment ranges from a high in Red Lake County with 85.3 percent to a low in Pennington County with 71.5 percent. This is important for job seekers, because these companies are more likely to hire than larger companies. In northwest Minnesota the job vacancy rate for businesses with less than 10 employees is 2.2 percent, compared to 1.2 percent for businesses with 10 to 49 employees, and 0.9 percent for businesses with more than 250 employees [6]. Job vacancy survey data also show that businesses with less than 10 employees are offering higher median wages than larger businesses.

Minnesota’s northwest region is full of resources and opportunity. Despite major layoffs in manufacturing and construction in the last three years, the region’s economic basket is diverse enough to survive as a whole. Certainly, unemployed workers and distressed businesses are fighting to survive. Yet many are finding a way to adapt to the changing economy. Creativity and innovation continue to drive success in the region. These adaptive businesses will continue to affect future projections and employment trends. Success stories of entrepreneurs and career changers do happen here.

[1]Minnesota Department of Employment and Economic Development, Long Term Projections, 2009-2019
[2]Minnesota Department of Employment and Economic Development, QCEW, Annual Average, All Ownerships
[3]Minnesota State Demographer’s Office, Labor Force Projections
[4]www.sanfordhealth.org
[5]U.S. Census Bureau, County Business Patterns, 2008
[6]Minnesota Department of Employment and Economic Development, Job Vacancy Survey, 4Q 2010

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