Jobs and Minnesota’s Future

Tom Stinson, State EconomistJanuary, 2011

Minnesota Has Been Very Successful (Especially For a Cold Weather State at the

End of the Road)

• Our economic growth rate has exceeded the national average

• Our population growth rate leads the frost belt• We rank with the leaders on many social and

economic indicators

Nominal GDP Per Capita Has Grown Faster than the U.S. Average

Minnesota’s Real Per Capita Personal Income Exceeded the US Average

by 6 Percent in 2009

Employment in Minnesota Has Grown Faster Than the U.S. Average

Minnesota’s Share of U.S. Manufacturing Jobs Has Increased

Manufacturing Employment in Minnesota Continues to Outpace the U.S. Average

Minnesota’s Current Success Is Due to Decisions Made 50+ Years Ago

• Private sector and public sector decisions established the foundation for growth in Minnesota’s economy

• Dealing with challenges brought by the baby boom was a key to our success

• Wise investments were made

• Education has been a key contributor to the state’s success

Midway Through This Decade Minnesota’s Economy Was Struggling

• Per capita personal income growth (2004-06)– 3.5 percent – Rank 47th

• Real per capita gross state product growth– 1.4 percent – Rank 45th

• Payroll employment– 1.2 percent – U.S., 1.6 percent

• Unemployment Rate at U.S. average

Minnesota Underperformed the U.S. Economy 2004-2006

Minnesota Outperformed the US Economy 2006-08

Minnesota’ s Unemployment Rate Is Again Well Below the US Average

Minnesota Payroll Employment Is Recovering from its 2006 Struggle

Minnesota Employment Is Recovering Faster than the U.S. Average

Minnesota Has Lost Nearly 50,000 Construction Jobs Since 2005

What about the future?

The U.S. Economy Lost 8.4 Million Jobs in the Great Recession

We Are Headed to a New Normal

• The Great Recession Is over, but we will not return to where we were

• We are moving to a New Normal• Minnesota is not alone—this a global

phenomenon• Those who recognize this and adapt first will

be most successful• The next four years will be critical to

Minnesota’s future

Workforce Development Will Be Crucial to Minnesota’s

Economic Future

• Number of workers• Quality of workers

– New entrants– Incumbent workforce

From 2010 to 2020, Minnesota Will See Large Increases Age 50s and 60s

20,15036,190

47,3305,050

-30,680-9,980

47,95061,920

-2,680-63,650

-42,31054,240

102,960112,540

91,37041,400

8,44016,500

0-45-9

10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-7980-84

85+

Source: Minnesota State Demographic Center, rev 2007Numbers are rounded

Minnesota Saw a 30 Percent Jump in Workers Turning Age 62 in 2008

0

10,000

20,000

30,000

40,000

50,000

60,000

7/05 to7/06

7/06 to7/07

7/07 to7/08

7/08 to7/09

7/09 to7/10

7/10 to7/11

7/11 to7/12

Year Turning Age 62

Wo

rke

d W

ith

in P

as

t 5

ye

ars

2005 ACS

Competition for the Future Workforce Will Increase

13.0%

0.7%

-2.3%-3.0%

6.8%

4.5%

-1.6%-2.2%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

2000-05 2005-10 2010-15 2015-20

Per

cen

t C

han

ge

18-2

4

Mn

US

Census Bureau US Proj, Mn State Demographer Mn Proj

Labor Force Growth Is About To Slow Sharply

Updated to 2009 ACS

For Many Occupations, Replacements Will Outnumber New Job Growth

Projected Openings In Minnesota Occupations 2009-19

DEED projections. Percent of 2009 level

The New 3 R’s for Economic Success

• Retention• Recruitment• Retraining

Education Is The Key To Productivity Minnesota High School Graduation Ratio

2007-08 Mn Dept of Education 5 year graduation rate. Percent of 9th graders who graduate within 5 years