Labor Market Information Office Minnesota’s Labor Markets: What’s in Store? Steve Hine Research Director Labor Market Information Office MN DEED November 13, 2008

Labor Market Information Office In the short term, a slowing economy …  Minnesota began to slow before the nation  Weakness has been across all sectors  Our low unemployment advantage has diminished or disappeared  Forecasts are of further weakness over the next couple years  Labor market slack may reach historic highs

Labor Market Information Office Employment since the last recession 4 years 47,000 job gap

Labor Market Information Office Compare that to the 1990s 500,000 job gap

Labor Market Information Office Over-the-year growth rates are lower … 2.3% 0.4%

Labor Market Information Office … and forecasted to go even lower Source: Global Insight US Economic Outlook, November 2008 About 60,000 jobs in MN

Labor Market Information Office Annual Job Growth – Past, Present and Future

Labor Market Information Office Job Declines = Rising Unemployment Rates Source: Global Insight US Economic Outlook, November %

Labor Market Information Office …And More Unemployed Seeking Work 244,000

Labor Market Information Office More People Filing for Unemployment Benefits … 29,073 30,691 16,721

Labor Market Information Office … and receiving and exhausting benefits 40% 30%

Labor Market Information Office The short run bottom line?  If current forecasts are accurate, Minnesota will:  Lose about 60,000 jobs between the end of 2007 and the end of 2009  Add an additional 70,000 unemployed persons to the current 175,000  Reach all-time highs in the number unemployed and UI claimants, recipients and exhaustees

Labor Market Information Office We face different challenges in the long term  Significant slowing in our labor force growth  A much older workforce  A more ethnically diverse workforce  Severe labor shortages rather than surpluses  New challenges in matching worker skills and job requirements

Labor Market Information Office Growth in labor force will slow … 707,000 Workers 226,000 Workers

Labor Market Information Office … and it could be worse if participation doesn’t improve

Labor Market Information Office What does it mean?  Between 2005 and 2010, MN is averaging about 30,000 new workers per year.  This will slow to 23,000 between 2010 and 2015, 14,000 between 2015 and 2020, and 3,000 per year between 2020 and  Our economy will grow at one-tenth its current rate in 15 years, and won’t pick up much for at least ten years afterward!

Labor Market Information Office Growing older workers, shrinking younger ones

Labor Market Information Office Change in age cohorts over next 20 years

Labor Market Information Office Responding to an older workforce  Almost all labor force growth will be in the older cohort  One in three of the workforce of 2035 are already of working age today  The P-16 “pipeline” of skilled workers will shrink dramatically  “Re-skilling” existing workers will become more crucial

Labor Market Information Office Where will these workers work? Industry projections 2006 to 2016

Labor Market Information Office Over 3 new jobs in 10 will be in Health Care