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'Stability' not enough for Duluth jobs; aging population isn’t being replaced on pace

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We're dying as fast as we're being born; we're moving here as fast as we're leaving.

The future is a flat line.

Between now and 2040, the Duluth metro area — St. Louis, Carlton and Douglas counties — is expected to add just 1,000 people, according to Minnesota State Demographic Center projections. From an economic development standpoint, that's not enough.

If population levels were even across age groups, this wouldn't be much of a problem. But, as you may have heard, the largest generation in the country's history is marching into retirement, leaving many jobs vacant just as unemployment levels are bottoming out and productivity growth is stalling.

"People are really coming to grips with the fact that this is a change we are feeling now and it's more or less here to stay, at least from the labor force side of things," said Minnesota demographer Susan Brower. "It's really hard to make up for those losses due to retirement."

Not that the region can't try. Beyond boosting birth rates, as U.S. House Speaker Paul Ryan has urged, or adopting job-replacing technology, getting more people to move to Duluth should be a priority for businesses looking to grow.

If only it were so easy.

"It's been a very long time since this region has seen a much higher level of migration," Brower said. "It's not that you couldn't have that, it's just historically we haven't seen that."

Recruit and retain

In 2014 Duluth was the "Best Town Ever." In 2016 it was "Brooklyn with trout fishing and skiing."

That sounds a lot better than "last one to leave please turn out the lights." But if the city is being sold so well, why is no one buying?

"Duluth's admirable progress to date has brought only stability, not growth, to its population," reads a report from the McKnight Foundation, which coined the Brooklyn comparison.

The city stopped hemorrhaging residents around 1990 and has since seen its population plateau. That matches the greater region's experience as birth rates and death rates start to line up and comings and goings even out, Census data shows.

"You're working with what you have in terms of numbers," Brower told employers at a recent conference on workforce challenges. "That's a real strength because it's what you're used to, and it's where a lot of regions are going."

Regions similar in rural character to ours, perhaps. Out of 380 metro areas, all but 80 have grown faster than Duluth since 2010.

That isn't for lack of jobs. Despite the old Rust Belt reputation, the narrative of lost or limited opportunities has shifted. According to the Department of Employment and Economic Development, there is more than one job for every unemployed person in Northeastern Minnesota. It's probably going to take new residents to get all those jobs filled.

"In the face of this tight labor market, attraction and retention are key as the supply of labor is limited and job seekers have more options to choose from when deciding where to apply or work," DEED regional labor analyst Erik White wrote in November.

Mayor Emily Larson said Duluth needs to be "a community that is welcoming and open to new experiences, new faces, new ethnicities, new races" to solve workforce shortages.

"It's not a crisis so much because we can see it coming," Larson told the News Tribune. "Part of what we are doing, and what we can seek to do, is work with our education partners and health care partners to recruit people with diverse backgrounds."

While former Mayor Don Ness had set a population goal of 90,000 residents, Larson said she is less tied to a specific target.

"Growth is good, but we also need to grow as a region to meet our needs as a city," she said.

Do no harm

When Gerry Hoeffner, president of Personnel Dynamics Consulting Group, came to Duluth in February and commented on the city's beauty, a bartender countered: "Just wait till next week."

Yeah, and Florida's summers are humid and horrible, Hoeffner said, but you don't see us bragging about it.

"You will talk us out of moving to Minnesota," the colorful speaker warned the hundreds gathered at Clyde Iron at a Feb. 13 city-sponsored workforce event. "Say 'welcome' as opposed to 'why.'"

Common sense says the cold and snow is why most of the region's new residents come from elsewhere in Minnesota or Wisconsin and North Dakota, according to Census data. But as the marketing surrounding the Super Bowl showed, winter can be more of an asset than a liability.

"From arts and industry to music and medicine, we throw caution to the wind-chill," went the "Bold North" campaign.

That's the kind of spirited response Hoeffner is looking for.

"If you don't tell your story, the story that gets told won't favor you," the consultant said.

Duluth's tale increasingly needs to go global. Since the turn of the century, international arrivals have been the sole source of migratory growth in Minnesota as residents leave the state in droves. Even St. Louis County saw nearly 1,000 international migrants amid a loss of hundreds of residents to other areas between 2010 and 2016.

"If you're going to see increased migration in the future it's going to look very different from what people are used to," said Brower, the demographer. "Especially since the last time there was sizable migration here was when everyone was white."

While international students probably accounted for much of the foreign influx to Duluth over the past decade, Brower said that the people who are most mobile and likely to relocate here are "more racially and ethnically diverse."

A recent DEED report said that employers need to remove barriers to work for immigrant and minority populations, "especially in areas of Greater Minnesota that also have a lower share of both immigrants and minorities."

"In the years ahead, it is likely that labor force constraints will require that every employer consider our young and growing immigrant population as a source of the workforce they will need," the report says. "Only by doing so can we hope to continue the economic success that our state has been known for."

Alternatives

So the predictions come true, the population remains flat and the workforce shrinks. So what?

"These demographic changes may shift our state's economy into a much lower gear, negatively affecting the quality of life for all," warns the state demographic center.

Ah.

Because the population will skew much older in Minnesota for decades to come, public programs that aid the elderly will be needed more than ever.

Because there are fewer people working and paying taxes, state and local revenues could take a major hit and cause tax hikes or service cuts or both.

Because businesses will be unable to grow, wages will stop growing and new opportunities will be limited.

Artificial intelligence could fill some of the gap to help businesses boost productivity, and who knows what garage will give birth to the next Amazon and lure talent from across the globe. But assuming the status quo remains over the next several decades, the demographic center says: "Population aging is not just a short-term phenomenon to be weathered; rather we are beginning a shift toward an older society that will be the reality well into Minnesota's future."

One statistic from 2017 could change that calculation, however: The state's net migration, both domestic and international, was positive for the first time since 2001 last year.

"That is exactly what we want to see happening," Brower told the News Tribune. "The numbers do bounce around a lot and the history is pretty deep. But if we are seeing a turnaround that's fabulous. We need it."

Brooks Johnson

Brooks is an investigative reporter and business columnist at the Duluth News Tribune.

(218) 723-5329
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