You may have noticed “Help Wanted” signs most everywhere you look. Nearly every business in the region is looking for workers. At this fall’s Regional Economic Indicators Forum the topic was workforce, and the DECC’s Harbor Side Ballroom was packed with professionals from around the region. With an aging population and a strong national economy, it seems this topic is not going away anytime soon.
Therefore, I thought this might be a good opportunity to (unofficially) fact-check some common workforce statements and add some thoughts about how our community might address these issues in the coming year.
“Unemployment rates are so low, there must not be enough people to fill all the open jobs,” it is often said.
It’s partially true. Each year, the Minnesota Department of Employment and Economic Development performs a job-vacancy survey, which measures the number of job vacancies and job-seekers. In 2009, there were 11 job seekers for every job vacancy. In 2019, that number had fallen to 0.9. In other words, for every 10 jobs posted, one would not be filled.
There is, however, some slack in the labor market that is not captured by official measures like the unemployment rate or the job-vacancy survey. For example, while the unemployment rate has remained relatively unchanged since 2017, the number of employed workers in the economy has grown. Much of this growth is from workers returning to the labor force as job prospects have improved. And there are very likely people who could still be enticed into the labor force under the right circumstances.
Another common statement: “With unemployment rates so low, anyone without a job must not want one.”
This is misleading. While the overall unemployment rate is quite low (measured at 3.1% in October), certain segments of the population still have high unemployment. These include persons with disabilities, black or African Americans, American Indians, and 16- to 19-year-olds. Many of these job-seekers experience barriers to employment that prevent them from working despite wanting a job. Access to child care and reliable transportation are some of the most common barriers, particularly for low-income groups.
Another, lesser-known, barrier to employment is the “benefits cliff.” For individuals who receive social assistance, adding extra hours or accepting a promotion might mean losing thousands of dollars if it pushes the person’s income level above eligibility requirements. Though the individual would earn more income working, the difference is much less than that of the social-assistance funding.
Another common statement: “If we could only retain our college grads, we’d be in good shape.”
This is mostly false. While the region’s college students and graduates represent a valuable asset, retaining college grads would not solve all of the region’s workforce problems. Right now, most of the top in-demand occupations are actually low-skill, low-wage jobs that require little formal training or education. Conversely, many jobs that require a bachelor’s degree are actually quite competitive, which puts college graduates at a disadvantage because they are competing against workers with more experience.
That is not to say that retaining college graduates should not be a priority. Employers should utilize internships and mentorships to establish connections with college students and consider new graduates for open positions. But when it comes to filling high-demand occupations, the focus must be on bringing more workers into the labor force, developing career pathways for health care and construction trades, and expanding career and technical-education programs throughout the region.
The final statement to fact-check: “Duluth’s reputation as “Best Outside City” can help attract talent.”
This is mostly true. Recently, Northforce analyzed the top cities from which Duluth draws new residents. Most of the top 10 were to be expected, notably Minneapolis, St. Paul, and small Midwestern cities. But one of the cities on the list was Denver, a sign that Duluth’s reputation as a destination for outdoor enthusiasts is catching on.
The sad truth, however, is that many newcomers to the region leave within just a few years because they feel unwelcome, experience racism, or have difficulty building connections. If we want to retain new residents, we must as a community work to create a more welcoming culture.
Thankfully, many regional workforce-development organizations are working on these and many other issues. Through my role as a member of Duluth’s Workforce Development Board, I see the valuable work that the local CareerForce center and similar local organizations do every day to connect businesses with employees. If you are a business struggling to find workers or a community member searching for employment, consider connecting with these resources. The region’s economy will thank you.
Monica Haynes is director of the Bureau of Business and Economic Research at the University of Minnesota Duluth. She wrote this exclusively for the News Tribune at the request of the Opinion page.
THE YEAR AHEAD
The News Tribune Opinion page again this year asked community leaders and area experts to gaze into their crystal balls and to share what 2020 might be bringing us.
Thursday, Dec. 26: City of Duluth
Friday, Dec. 27: St. Louis County
Saturday, Dec. 28: Duluth school district
Sunday, Dec. 29: Congress
Monday, Dec. 30: Minnesota Legislature
Tuesday, Dec. 31: The Economy
Wednesday, Jan. 1: Tourism
Thursday, Jan. 2: Business
Friday, Jan. 3: Downtown Duluth