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Healthy economy: The jobs are coming, but will the wages and workers follow?

The buildings of the Essentia Health campus fill the view this view of Duluth's Central Hillside as seen from the air earlier this month. (Clint Austin / caustin@duluthnews.com)1 / 5
St. Luke's hospital in Duluth, as seen from the air earlier this month. It's part of a larger St. Luke's medical campus in the neighborhood. (Clint Austin / caustin@duluthnews.com)2 / 5
Work is underway on an expansion of the St. Luke's medical campus in Duluth in this view from 2011. (News Tribune file photo)3 / 5
Workers with Lakehead Sign install the letters of a new sign on Essentia Health's First Street Building in Duluth in 2011. (News Tribune file photo)4 / 5
Click to view entire image5 / 5

Scrubs sales are going to skyrocket.

Northeastern Minnesota is forecast to gain 3,600 additional health-care jobs in the next decade, bolstering what is already the dominant employer in the area.

"That's a greater total than the entire economy, which overall is expected to add 3,200 new jobs," said Cameron Macht with the Department of Employment and Economic Development.

But the entry-level jobs pay wages comparable to fast food restaurants, and many of the higher-paying jobs take years of education and training. Then there's the recruitment problems posed by a shrinking workforce.

Observers aren't worried about all that, though. Those entry-level jobs can be a pipeline to the top.

"There's a wide range of positions available, and there's a good career path," Macht said. "If employees are interested they can work their way up to much higher-skilled and higher-paying jobs."

As for the workforce, Macht said health employers know better than anyone the tight labor market facing the region, and especially Duluth.

"They're really working hard on reaching out to different groups and attracting them in," he said.

Because of the size of the health-care industry here, those efforts will have an outsize effect on the success of the local economy.

Wages, training

Duluth's median income for a single person is about $27,000 a year. The most in-demand job in the area, according to DEED, pays much more than that — registered nurses earn an average of $59,000.

Yet the second-most in-demand job, personal care aide, pays less than the median at $22,000.

To put that in perspective, the guideline for housing costs is one-third of income, meaning that after taxes the average-paid personal care aide shouldn't be paying more than $500 a month for housing. The median rent in Duluth, according to Census data, is $728 a month; the median mortgage payment is $1,200.

Though personal care aides require less than a high school diploma and little on-the-job training, the pay is similar to retail positions that may entail much less stress. Home health aides, expected to grow nearly 30 percent in the next decade, make a little more but are also going to face tough work.

"I think we're going to have to find a way to improve the working conditions and the salaries of our lower-paid care providers," said Terry Hill, senior adviser to the Duluth-based National Rural Health Resource Center.

Those jobs can be a foot in the health-care door, however, along with training and schooling.

"The good news is there's a lot of job training scholarships, once they get into the entry level," said Jen Schultz, co-director of the University of Minnesota Duluth's Health Care Management program and a state representative. "There are state funds available."

With health care, as with many careers, there is a direct link between the amount of education and training and the amount of pay.

It's those low-paying jobs that are projected to grow the most, which could end up helping those paychecks.

"That's going to improve because there's going to be a shortage of those workers," and wages will go up as employers compete for workers, Schultz said.

If the job market gets too tight, though, those jobs will just go unfilled. Not that the health-care machine is about to let that happen.

Workforce

Labor force projections show Northeastern Minnesota is going to be short on workers for the foreseeable future as employees retire and aren't replaced fast enough.

For the region's fastest-growing sector, that's a big problem, but one getting plenty of attention.

"When DEED goes out and speaks to different groups, we've talked to long-term care providers, nursing homes, residential care facilities — they're very aware of challenges in trying to recruit and attract," Macht said. "Maybe they're being a little more aggressive in outreach, connecting with local schools, at the high school and community, technical college and university level, attracting workers through that pipeline."

Hill agrees that a push is needed for those personal care jobs that are growing fast to keep up with an aging population more in need of those services.

"We're going to have to find innovative ways of paying people and making those long-term care jobs in particular more enticing," he said.

For higher-skill jobs also in high demand regionally, recruitment likewise remains a challenge, said UMD Health Care Management program Co-Director Kim Dauner.

"Ideally we want people in health care to come here and stay here, and I think increasing salaries can help that," she said. "We need to do better attracting people to rural communities especially."

Dauner's cohort, Rep. Schultz, said she's working on legislative initiatives to help boost loan forgiveness and tax credits to get more people interested in these careers, especially in long-term care where the need is the greatest (though wages are among the lowest).

Yet even if 100 high school kids decide they want to be nurses tomorrow, it will be years before they join the workforce. Dauner said that while workers remain scarce, employers need to look hard at their strategies.

"What's the right mix of practitioners to deliver good care in a way that's cost-effective?" she posited. "When it comes to the workforce, let's not be afraid to rethink things and be creative."

This is the second in a series of three stories examining the economic impact of the health-care industry in the Twin Ports.

Previously: Heart of the economy: Health care is Twin Ports’ leading industry by a long shot

Coming Tuesday in Health: When it comes to health care and the local economy, how does the Twin Ports stack up against other medium-sized Midwestern cities?

Brooks Johnson

Brooks covers business and the economy for the Duluth News Tribune.

(218) 723-5329
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