Minnesota will soon face a significant labor shortage. In some key industries, the shortage is already being felt acutely by employers. If unemployment rates, existing racial and ethnic employment disparities, and trends in migration continue, we can expect only an average 0.35% annual increase in employment between 2016 and 2022. This is due in large part to the rapid retirement rate of the baby boomer generation, and the decreasing rate of participation in the labor force of young people.
This graphic, originally developed in October 2016 and now updated with new data and insights, offers a simplified 6-year outlook at the impact of several challenging, yet important goals for the future employment of Minnesotans.
Late last year, RealTime Talent used the data published by the MN Demographic Center to take a deeper look at recent employment trends, migration patterns, and Minnesota’s gross state product. We found that Minnesota will need about 278 thousand additional workers above which we anticipate to be employed by 2022. That means we need between 40 and 45 thousand additional workers each year to maintain our current rate of economic growth.
Modest improvements to this scenario can be obtained through some familiar kinds of interventions in the functioning of the labor force. Namely, increasing labor force participation and focusing on increasing employment rates. However, even if we take the most optimistic outlook, we will likely still fall short at least 200 thousand workers by 2022 across the state. In the years ahead, we will need new and diverse strategies for attracting and retaining talent from both domestic and international sources, as well as creative approaches to increasing the productivity of Minnesota’s existing workforce.
For more information, download the graphic here.