Minnesota lost jobs last month and real wages fell this year
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New monthly data from the Minnesota Department of Employment and Economic Development shows what officials are again calling a “mixed bag.” Month-to-month labor market figures generally declined and stagnated, but Minnesota is still outpacing the rest of the country on some metrics, including job growth, over the year.
One notable exception is wages, which have stayed flat in Minnesota since last September while prices have risen by 3.7 percent, according to the latest Consumer Price Index. That means workers in the state have lost purchasing power. Wages grew by 2.9 percent nationally.
DEED Labor Market Information Director Angelina Nguyen said that could be a result of how Minnesota’s labor force has been changing.
“The job growth that we've seen happened to be in industries that tend to pay lower, like education and healthcare services, or retail, or leisure and hospitality,” she said. “So the way job growth is distributed may be holding down the average hourly earnings.”
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The state lost a total of 4,600 nonfarm jobs last month on a seasonally-adjusted basis while the country saw a small increase in jobs. The state’s unemployment rate rose to 4.5 percent and the nation’s grew to 4.2 percent.
During that same time, the state’s labor force grew by about 800 people. That's basically 0 percent, but officials tout that it marks a break in a nine-month fall in the number of Minnesotans working or looking for work.
That figure has fallen by more than 34,000 people since last September, or a little over one percent.
Meanwhile, the state’s labor force participation rate, or the percentage of the population who are working or looking for work, fell last month. It’s down to 66.7 percent compared to 68.1 percent last year.
"We are puzzled,” Nguyen said. “In terms of jobs growth, Minnesota is doing fine. There's something going on with our labor force that we don't yet have enough data to put a finger on why we are seeing worsening labor force stats."
DEED Commissioner Matt Varilek said the labor force could be taking a hit because of the surge in immigration enforcement earlier this year.
“You would expect that that would cause some people leaving the state who were impacted by Metro Surge, and therefore also leaving the labor market,” he said.
He also said Minnesota’s population is aging and foreign-born workers typically help supplement retiring workers. But that’s not happening as much anymore.
“As international immigration policy has been changed radically by the federal government, we now have far fewer folks arriving in Minnesota from foreign locations,” he said. “Therefore the thing that was offsetting our aging workforce is no longer doing so.”
