1. Labor Market Information Office www.deed.state.mn.us/lmi Minnesota’s Labor Markets: What’s in Store? Steve Hine Research Director Labor Market Information Office MN DEED November 13, 2008

2. Labor Market Information Office www.deed.state.mn.us/lmi 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

3. Labor Market Information Office www.deed.state.mn.us/lmi Employment since the last recession 4 years 47,000 job gap

4. Labor Market Information Office www.deed.state.mn.us/lmi Compare that to the 1990s 500,000 job gap

5. Labor Market Information Office www.deed.state.mn.us/lmi Over-the-year growth rates are lower … 2.3% 0.4%

6. Labor Market Information Office www.deed.state.mn.us/lmi … and forecasted to go even lower Source: Global Insight US Economic Outlook, November 2008 About 60,000 jobs in MN

7. Labor Market Information Office www.deed.state.mn.us/lmi Annual Job Growth – Past, Present and Future

8. Labor Market Information Office www.deed.state.mn.us/lmi Job Declines = Rising Unemployment Rates Source: Global Insight US Economic Outlook, November 2008 8.3%

9. Labor Market Information Office www.deed.state.mn.us/lmi …And More Unemployed Seeking Work 244,000

10. Labor Market Information Office www.deed.state.mn.us/lmi More People Filing for Unemployment Benefits … 29,073 30,691 16,721

11. Labor Market Information Office www.deed.state.mn.us/lmi … and receiving and exhausting benefits 40% 30%

12. Labor Market Information Office www.deed.state.mn.us/lmi 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

13. Labor Market Information Office www.deed.state.mn.us/lmi 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

14. Labor Market Information Office www.deed.state.mn.us/lmi Growth in labor force will slow … 707,000 Workers 226,000 Workers

15. Labor Market Information Office www.deed.state.mn.us/lmi … and it could be worse if participation doesn’t improve

16. Labor Market Information Office www.deed.state.mn.us/lmi 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 2025.  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!

17. Labor Market Information Office www.deed.state.mn.us/lmi Growing older workers, shrinking younger ones

18. Labor Market Information Office www.deed.state.mn.us/lmi Change in age cohorts over next 20 years

19. Labor Market Information Office www.deed.state.mn.us/lmi 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

20. Labor Market Information Office www.deed.state.mn.us/lmi Where will these workers work? Industry projections 2006 to 2016

21. Labor Market Information Office www.deed.state.mn.us/lmi Over 3 new jobs in 10 will be in Health Care