Minnesota lost workers faster than the national average, but the state has options.
MINNEAPOLIS — After being sworn in for his second term on Monday, Minnesota Governor Tim Walz tackled the economic issue that could define the next four years — and beyond.
“Let’s grow our workforce,” Walz said during his speech. “Let’s get people here; let’s make sure we’re a destination for teachers and nurses and small business owners and entrepreneurs.”
Those who cover the state’s economy say it’s a task that’s easier said than done — even with the state’s historic $17 billion surplus to work with.
“We’re one of the first states in the country to really feel the effects of population growth starting to level off and, in fact now, a downturn in our workforce,” said Star Tribune business columnist Evan Ramstad.
Minnesota’s workforce is down about 3 percent since 2020, which is twice the national average for that period. Only five states experienced a larger decline.
in a latest columnTackling this kind of workforce challenge, Ramstad says, will require more than just trying to carve our way out of it.
“I’m not sure we can get out of it,” he said. “We have better schools, we have better work environments to attract people, we have higher salaries to attract people. These are all good ideas and the country should be aggressive about that, but all of this is relatively small compared to the fact that when you look at generation sizes. There is no compensation for generation size. (baby boom).”
While that’s a challenge, Chris Farrell, chief economic contributor to MPR News and Marketplace, says it’s also a huge opportunity.
“I think that’s cool,” Farrell said. “This is the best possible news. I think we should be shouting from the rooftops that a good economy, the definition of a good economy, is when companies are looking for workers. The definition of a bad economy is when workers are looking for companies.”
Farrell says that should also help workers weather uncertainty in other aspects of the economy in the coming months.
“I know we are in a battle against inflation,” he said. “It looks like the Fed is going to win, in fact that’s the safest forecast you can make: The Fed is going to win. The question is, what price are we going to pay?”
He continued, “But even if we do enter a recession, my suspicion is that a lot of companies will want to hold on to their workers, rather than let them go. In general, I think we have entered an era where labor is a scarce resource and that is not going to change in the short or long term.”
This is also why Farrell and Ramstad believe Minnesotans will see efforts and actions from all levels of government and businesses targeting workers in the coming year.
“It’s going to take government, it’s going to take private business, it’s going to take nonprofits, but with that sense of urgency, this is an opportunity,” Farrell said. “A low unemployment rate is a welcome time.”
“I think that’s the only way forward,” Ramstad said, “is to be really creative.” “People have to be very creative, fundamentally, in the work process, and if we can’t come up with a better way of doing it, we can’t do it.”
In addition to attracting more workers from out of state, both Ramstad and Farrell say Minnesota could also make it easier for existing people to return to the workforce or stay in their jobs longer. It could be through companies embracing automation to help with productivity, or through our government removing costly barriers for those who may want to get trained or certified in new jobs, start a business, or return to the workforce after taking care of a child or loved one. older parents.
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