Minnesota's Emerging Green Economy

by Alessia Leibert
October  2011

In December 2009 the U.S. Department of Labor awarded the Department of Employment and Economic Development a grant to collect, analyze, and disseminate labor market information on green jobs in the state. The research is built on Minnesota’s Job Vacancy Survey because job vacancies provide a leading indicator of changes in the labor market, including changes in occupational demand, as well as skill, knowledge, education, and training requirements of occupations. The methodology for this project included four rounds of a mail survey to employers, follow-up phone interviews of all employers with green job vacancies, and in-depth interviews with a subset of key green firms in Minnesota. 

Specifically, the purpose of this study was to:

• Define the green economy and labor market in Minnesota;
• Quantify hiring demand for green jobs over a two-year period;
• Characterize green jobs in terms of occupational, industrial, and geographic composition;
  Collect comprehensive data on the skills, training needs, and certification requirements of green job vacancies to identify skill gaps and to help students and career seekers prepare for in-demand green careers.

The study defines a green job as one that is directly and/or essentially related to a green product, green service, or green process. Survey respondents were asked if each of their available positions spent at least 50 percent of the time in any of the following activity categories:

• Renewable Energy or Alternative Fuels
• Energy and/or Resource Efficiency
• Environmental Cleanup (including recycling and pollution prevention/mitigation activities)
• Sustainable Agriculture or Natural Resource Conservation
• Environmental Education, Regulation, Compliance, or Research

Factors considered when determining the greenness of a position included job title, job duties, percentage of time spent in green activities, employer perspective, and organizational context.

Hiring Demand for Green Jobs

Green job vacancies represented 2.5 percent of overall hiring demand in Minnesota between fourth quarter 2009 and second quarter 2011. This estimate is in line with survey results from other states which attempted to estimate the size of the green economy.[1]

Green vacancies were found in 263 firms, predominantly private companies, across the state with about half in the Twin Cities metro area and half outside of the metro area (see Table 1). The urban-rural diversity of Minnesota’s economy is key to the development of the local green economy. Each region’s contribution is important and must be acknowledged.

Growth in hiring demand for green-related work was virtually identical to that in the overall economy, averaging 30 percent over the study period. Survey findings indicate that, when measured through job openings that devote the majority of their time to green activities, employment in the green economy represents a small but stable share of overall employment. However, more than half (54 percent) of Minnesota’s green openings are “growth openings” originating from business expansion rather than worker turnover. This demonstrates the emerging nature of the green economy. A discussion of employment growth in the green economy cannot be complete without acknowledging the dynamic and diffuse nature of green jobs. When today’s best available green solutions are surpassed by environmentally superior ones, new types of green jobs might emerge while some of today’s green jobs may not be quite so green. Jobs that devote less than 50 percent of their time to green tasks, not included in this research, are also becoming pervasive and might shift entirely to green-related projects in the near future.

A Profile of Minnesota’s Green Economy

Thanks to its diversified economy, Minnesota has a piece of just about every possible green activity, from long-standing reforestation to cutting-edge research on bio-based plastics. Green jobs fall into seven core areas based on their environmental activities. Figure 1 illustrates how green vacancies reported from fall 2009 to spring 2011 were distributed across sectors.[2]

The following list describes the relative size, composition, and distinguishing characteristics of each category of green jobs:

• Energy and Resource Efficiency (31 percent): These jobs contribute to designing, manufacturing, installing, maintaining, and/or selling products or services that increase energy and resource efficiency. This sector has strong ties to some of Minnesota’s most distinctive industries, including HVAC Systems Manufacturing, Precision Instruments Manufacturing, Automatic Environmental Control Manufacturing, Wood Window and Door Manufacturing, and Glass and Glass-product Manufacturing.
  
  
• Recycling and Pollution Prevention (22 percent): These jobs focus on reusing/recovering materials, manufacturing low-impact and non-toxic products, and reducing the carbon footprint of transportation and manufacturing activities. Minnesota has a strong recycling sector that supports local manufacturers by creating a market for industrial byproducts and materials recovered from solid waste. This sector also has an important R&D component in Minnesota, specifically in green chemistry and bio-based plastics.
  
  
• Natural Resource Conservation (13 percent): These jobs contribute to conserving the natural resources that Minnesota has in such abundance and ensuring their most efficient use. Public sector hiring was the most concentrated in this green sector, with government establishments accounting for 80 percent of all hiring.[3]
  
  
• Environmental Compliance (12 percent): These jobs include corporate headquarters positions such as environmental compliance managers and corporate sustainability specialists. Hiring by nonprofits and government establishments was also strong in this sector and included fundraisers for conservation-related activities and scholars engaged in applied research.
  
  
• Renewable Energy (11 percent): These jobs involve the generation, storage, and distribution of power from renewable sources or alternative fuels. As a state with good wind potential and abundant corn for ethanol, Minnesota has an incentive to invest in renewable energy sources and biomass fuel sources.
  
  
• Pollution Control (8 percent): These jobs contribute to pollution control/mitigation and waste treatment. Given the myriad pollution sources and problems, businesses face the challenge of identifying viable and effective cleanup options, with solutions coming from a variety of disciplines.
  
  
• Water treatment and conservation (3 percent): These jobs contribute to treating and conserving water/wastewater as well as managing wastewater resources. Although Minnesota seems to lag behind in this green activity area, some workforce shortages are expected as a result of the growing importance of water quantity and quality issues for quality of life and economic development.
  

While green vacancies were reported in a wide variety of industries (120 NAICS codes), the greatest numbers were in Construction and Manufacturing, two major sources of jobs in the state. The concentration of green vacancies in the manufacturing sectors where Minnesota already has a competitive advantage in terms of employment concentration, firm concentration, and locally available workforce suggests that the greening of the economy could contribute to strengthening the state’s manufacturing base.

Characteristics of Minnesota’s Green Job Vacancies

Is green truly an emerging sector? Is it changing the world of work? These questions are best answered at the occupational level, where the greening of Minnesota’s economy is most clearly observable in the form of new green tasks added to traditional occupational tasks. When green-related work, often in the form of a practice or project [4], becomes more than occasional and starts requiring additional and/or unique preparation, a process of differentiation begins by which green jobs separate themselves from non-green jobs within the same occupation.

While hiring for green jobs is dispersed across a wide variety of occupations, over half of all green job vacancies over the study period were concentrated in Installation, Maintenance, and Repair, in Architecture and Engineering, in Construction, in Management and Business Specialists,  and in Life and Physical Scientists. These career fields are the most impacted by the greening of Minnesota’s economy.

The analysis of wage and work status in green vacancies demonstrates that the Minnesota green economy is capable of producing high-quality job opportunities by driving demand for full-time jobs predominantly in higher paid occupations. Green vacancies were predominantly full-time (89 percent) and permanent/non-seasonal (79 percent). Higher wages appear to be driven, on the one hand, by higher concentrations of green jobs in better paying occupations (business specialists and engineers) and better paying industries (advanced manufacturing) and, on the other hand, by a “wage premium” associated with specialized, sometimes unique, knowledge and experience required to perform green work.

When wages are further analyzed by detailed occupational group (see Figure 2), median wage offers in green vacancies appear slightly more competitive than total wage offers within the same group. A notable exception is Management, where wage offers for green jobs were $9 lower than total wage offers. This result is driven by the prevalence of green CEOs and managers hired by non-profit organizations, where the pay is lower than in private corporations. A “green wage premium” was most clearly observed in Business and Financial Operations Occupations, where workers often require enhanced skills/expertise to perform green tasks. Examples of occupations where emerging green specialties require specialized experience and knowledge are compliance officers, cost estimators, and marketing specialists. Some employers reported difficulties filling these types of positions.

The most common degrees required to work in green jobs were bachelors and vocational degrees, while the most highly demanded fields of study were engineering and science. This suggests that higher education institutions and vocational trade schools, especially those delivering science, technology, engineering, and mathematics (STEM) programs, will have an important role to play in building the local talent businesses need to compete in the green economy.

Skills, Knowledge Requirements, and Workforce Gaps in Green Vacancies

Information on skills and knowledge requirements in green jobs is critical for career explorers, students planning their education, mid-career workers wishing to specialize in a green project or practice, and educational institutions wanting to develop curricula that best align with local employers’ needs.

Green jobs typically require a skill to be used more frequently or at a more advanced level. The results displayed in Table 2 suggest that skills in science, technology, engineering, and mathematics (STEM) areas are in higher demand than other skill areas for this group of jobs. STEM-related skills may be used at a more advanced or more complex level for green jobs than for their non-green counterparts.

The majority of green vacancies required technical skills, often linked to the use of new technologies that are driving the greening of the economy. Technology design, cited as important in 13 percent of green vacancies (engineers and scientists, for the most part), is particularly relevant because it reflects research and design activities to develop innovative green technologies and to find new ways of making existing products/processes more environmentally sustainable. Technical and mathematical skills combined were required in 48 percent of all green vacancies, indicating high demand for candidates who can blend the two skill sets.

The most in-demand skill area unrelated to STEM was Project Management, important in 21 percent of surveyed positions. This particular set of skills is emerging as a prerequisite for green employment because many green activities come in the form of interdisciplinary projects, which require the skillful integration of technical and managerial roles. A good example is a LEED-certified construction project.

In combination with hard skills, green employers are seeking workers with soft skills such as problem solving, self-directed learning, interpersonal communication, collaboration in a multi-disciplinary team setting, and negotiation/persuasion.

Survey questions designed to measure hiring difficulties identified some short-term [6] labor market shortages in the green economy despite the cooling effect of the latest recession on the job market. More than a quarter of vacancies were reported by employers as “hard to fill” because of candidates’ qualification gaps. Nine out of 10 cases of hiring difficulty were caused, entirely or in part, by “lack of experience” in job applicants. The second most frequently reported hiring difficulty was lack of skills, knowledge, or abilities. Experience and knowledge were often interrelated in employers’ minds, since knowledge often comes from experience. Lack of formal degrees, certifications, or licenses was mentioned as a problem in 28 percent of cases.

These findings can lead to two observations. First, although the formal credentials needed to transition into the green economy are to some extent already present in the current workforce, strengthening STEM education from the K-12 to postsecondary level is absolutely necessary to prepare the future workforce for work in green economy sectors. Second, although green jobs share the same foundational training path as their non-green counterparts (including similar certification requirements), there is also evidence of unique, specialized “green” knowledge needed to perform green work competently. The absence of a credentialing system for the emerging green economy, whether in the form of study tracks or certifications allowing applicants to demonstrate their command of specialized knowledge, can pose challenges for employers and hamper the growth of the green economy.

Conclusion

Empirical evidence accumulated over two years of research demonstrates how the greening of the economy is affecting Minnesota’s labor market, with detailed measurements by region, industry, and occupation. Overall, study results confirm the view that, from a labor market information perspective, green jobs are not a new phenomenon. The greening of the world of work is unfolding gradually and quietly, driven by technological advancements, firms’ ability to develop green products and services embodying these advancements, and customer demand. Environmental performance considerations will gradually become part of everyday decisions on what we buy and what we do. New green jobs will be created and conventional jobs will transition to the green economy as these processes unfold, increasing demand for new workforce competencies.

[1]In September Minnesota’s seasonally adjusted unemployment rate fell to 6.9 percent.
[2]Each job has been assigned to a predominant sector of focus even though there is often overlap among sectors.
[3]Private sector hiring was underrepresented in the data because self-employed farmers were not included in the universe of surveyed establishments.
[4]The project-driven nature of some green activities is also one of the reasons why green jobs are so hard to identify and dynamic in nature. For example, an 
architect can work on a LEED-certified project today and on a traditional construction project tomorrow.
[5]Since there were cases when employers did not distinguish between mechanical skills and mechanical knowledge, the results have been analyzed as
conceptually similar.
[6]Since hiring difficulties were measured between one and four months from the vacancy’s posting date, they represent short-term labor market mismatch.

Top