Jobs and work in Minnesota's future

The Daily Planet's New Normal Project is a series of news stories and community conversations devoted to identifying community priorities as we face serious economic challenges. Every month we'll tackle a different topic, including neighborhoods, the state budget, education, health care, public services, immigrant communities, the environment, work and inequality. You're invited to join the conversation, either online (by commenting on articles like this one) or by participating in a community conversation (see the list of this month's conversations at the end of this story.)  

The Challenge

How do we create good jobs for Minnesotans, and prepare a workforce with the skills required to fill them?

Is the best solution to:

1. Focus on workforce development?
2. Create public jobs programs and support worker organizing?
3. Develop initiatives that help Minnesota retain businesses and jobs?
4. A different approach (please share your ideas).

Background

For Minnesota workers and job seekers, this has been a decade of decline, with most of the slow down occurring long before the “Great Recession” of the past few years. Steve Hine, director of labor market information research for the Minnesota Department of Employment and Economic Development (DEED), says that even though there has been steady improvement in recent employment numbers, the improvement to date is “painfully slow.”  Making matters more troublesome, jobs created to replace those that have disappeared tend not to measure up in terms of pay, hours, or benefits.

Certain industries, such as construction and the information sector, have been particularly hard-hit. While there is plenty of pain to go around, some segments of the population are hurting more than others. The employment gap between whites and blacks in Minnesota is jarring. Facing limited options as they enter the job market, recent college grads are going to be “scarred for life,” warns Lawrence Mishel, president of the Economic Policy Institute.  Because it is challenging to appear attractive to prospective employers as one approaches retirement age, older workers seeking re-employment are also severely impacted, says Hine.

Facts

According to the most recent numbers from DEED, job seekers statewide outnumber full-time job openings by a ratio of almost 10-to-1. That means that there are 206,000 unemployed workers competing for 33,800 jobs, of which only 20,600 are full-time. In the Twin Cities metro area the number of job seekers outnumbers openings by a less dramatic, but still significant 5-to-1 margin.

This is not just an issue of the current recession. The number of job openings in Minnesota has fallen by 76 percent over the past ten years. Most of those positions were lost during and two years after the 2001 recession. The more recent recession accounts for just 16 percent of lost positions.  

Where are the jobs? Certain categories of employment have been especially hard hit. In Greater Minnesota, for example, construction and extraction openings fell by 80 percent, transportation and material moving by 65 percent, production openings by 64 percent, and education, training, and library openings by 63 percent, all over the course of the last five years. 

Hine says that one area not hurt—for the past three decades, in fact—is health care; this, because of the rapidly growing number of seniors requiring care. A DEED listing of occupations in demand shows registered nurses, home health aides, and nurse’s aides the areas where there is most demand.

Analyzing DEED’s figures, Kevin Ristau of the JOBS NOW Coalition highlights the fact that job openings are far more likely than they were in the past to be part-time. Part-time employment, with a median wage of $9.00 per hour, accounts for approximately one-third of openings; this compared to a median wage of $12.67 per hour for all openings. Nearly half of the available jobs require no education or training beyond high school.

Unemployment disparities Perhaps most noteworthy, the Organizing Apprenticeship Program (OAP) reports that the unemployment rate for Latinos (15.5 percent) and blacks (22.5 percent) is two to three times higher than the state’s overall unemployment rate, a gap that is the highest in the nation.

Solutions

Focus on workforce development: As Minnesota's population ages and changes, more of tomorrow's workforce will be people of color and immigrants. What's needed is a more "nimble" workforce, says DEED's Steve Hine. The Minnesota Chamber of Commercestresses the importance of pre-kindergarten to grade 12 education and development of basic skills sets. HIRE Minnesota emphasizes equity, networking, internships and mentoring to reduce employment disparities. Common Bond’s programs help residents confront numerous barriers, and receive the individual attention they need to attain jobs.

Create public jobs programs and support worker organizing: Labor historian Peter Rachleff advocates a combination of an aggressive public sector jobs program, similar to that of the 1930s, and conditions that help workers form and build unions to improve the quality of their jobs. Economist Larry Mishel says job creation is the best way to address the deficit, and advocates federal policy solutions to support job creation and the states.

Develop initiatives that help Minnesota retain businesses and jobs: Kathy Tunheim, Gov. Mark Dayton’s senior advisor on jobs, focuses on creating new narratives to sell businesses—and their employees—on the state’s extraordinary assets, including its highly educated workforce, wealth of natural resources, a private economy that is “the envy of the world,” and quality of life. Bill Blazar points to the Chamber of Commerce's Grow Minnesota business retention program.

A different approach: Please share your ideas, in the comment section, by sending us an article or opinion essay, and by participating in our community discussions.

With slower growth in the workforce, Minnesotans will need to be more flexible and mobile than in the past. A “nimble” workforce, one that is “able to move more readily from one skill set to another,” enabling workers to navigate a rapidly changing global economy, is essential, says DEED’s Steve Hine. He gives the example of workers in construction, “who are hard-pressed to find employment in the same industry,” so will need to find new skills. In some cases, being more nimble means being willing to relocate as well. Hine stresses that creating a workforce of this kind depends on a number of systemic changes or policy reforms occurring. For example, to help make frequent moves—occupational or geographical—more viable, there must be changes in the health care system so that health insurance is no longer an impediment to seeking opportunities. Another prerequisite is a stabilized housing market.

As Bill Blazar, senior vice president of public affairs and business development for the Minnesota Chamber of Commerce, sees it, jobs are changing in ways that require more “sophisticated” workers. In other words, jobs increasingly demand workers who are creative, adept at problem-solving, and more likely to be programming and maintaining a machine, or doing skilled, made-to-order work, instead of traditional, manual labor. This means greater malleability on the part of workers—who must keep up with changes in an evolving economy—but also employers who provide support for education and retraining.

Walking in the door, Blazar says, workers must have basic skill sets, which often they do not. Employers are unable to teach skills like adding, reading, and writing to employees who lack them. As a result, the Minnesota Chamber focuses its efforts on promoting legislation designed to improve pre-kindergarten to grade 12 education. (The Chamber also supports need-based scholarship and loans programs to help lower-income students attend college.) Blazar stresses that helping those at the lower end of the achievement gap attain basic skills is one key way of growing the workforce. Another is to assist immigrants, as they enter the workforce.

Craig Helmstetter, a consulting scientist at the Wilder Foundation and lead researcher for the  Minnesota Compass indicator project, notes that the population of color has tripled in the Twin Cities over the past 20 years. One in five state residents, or 600,000, is now a person of color. At the same time, immigrant populations are growing at a rapid rate, an increase of 40 percent statewide in the past decade alone. Over the next 25 years, people of color, American Indians, and immigrants—most of whom will be younger on average—will be called on to fill many of the positions currently held by aging white baby boomers. The question is: will that workforce be prepared? And if not, what will the repercussions be to the state’s tax base, quality of life, profile as an innovator, and overall competitiveness? For many experts, workforce preparation exceeds job creation as a priority.  

At HIRE Minnesota, a coalition of community organizations seeking public investments to grow the economy, provide living wages to low-income people and people of color, and promote healthy communities, founder Louis King’s mission is to prepare a workforce that is increasingly “brown” to fill jobs vacated largely by older white Minnesotans. Those vacancies, he says, represent a tremendous loss of expertise, so new workers must have adequate educations to fill them.

Simultaneously, steps must be taken to shatter myths and shift attitudes about African Americans through building relationships with whites. King argues that the gap in unemployment rates between black and white Minnesotans is rooted in part in limited opportunities for interaction between the two groups. When people discriminate, he observes, it is most likely because their networks lack diversity, making it easier to maintain preconceived notions. Workforce development, in his view, begins when African Americans are offered internships and mentored. This provides opportunities to form essential relationships, build trust, and demonstrate capabilities and accountability.

HIRE Minnesota is focused on developing the workforce around new jobs in the areas of energy and energy efficiency and rebuilding due to violent weather, sectors that appear to have steady growth potential. The coalition also recently provided Gov. Mark Dayton a list of ten recommendations for immediate action. Its core message: “If we don’t transform the way our state’s resources are allocated—with an explicit emphasis on equity goals—the already alarming unemployment and wealth gap for low-income communities of color and women will only increase and we will be unprepared to meet our future.” 

What is most important to Kelly Matter, Vice President of Advantage Services at Common Bond, the Midwest’s largest nonprofit provider of affordable housing with services, is that people are provided with skills that help them become competitive. She holds that nearly everyone is employable, that there must be jobs available for everyone who wants and is able to work, and that this requires there be jobs at all skill levels. “Without training the workforce, we cannot fill the jobs that are created.”

Matter’s work at Common Bond involves helping people of all skill levels confront barriers, often due to language, culture, disability, or having a corrections background. Matter stresses that Common Bond works with residents long-term, on an individualized basis, to help them receive the training and resources they need to get a new or first job.

One of Common Bond’s goals is to see that young people graduate from high school and gain access to college, if they desire. Forming relationships with businesses and the wider community, she says, is another essential component to developing a better understanding of what everyone’s needs are around jobs and employment.

For things to turn around on the jobs front, says labor historian Peter Rachleff, there must be a combination of an aggressive public sector jobs program, similar to that of the 1930s, and conditions that help workers form and build unions to improve the quality of their jobs.

Hines says job creation policies designed to stimulate employment growth are essential. There must be more consumer spending and business investment, and policies that provide a good, predictable environment for job growth. Even though confronting the deficit is important long-term, notes Hine, the immediate future is not the time to put a “fragile recovery at risk.”

Economist Larry Mishel, director of the Economic Policy Institute, speaking on Minnesota Public Radio's Midday program, proposed several public policy and public spending approaches as essential to getting people back to work. He argues that tax revenues will increase and safety net spending will decrease once people have more jobs and money, insisting, "the way you get the deficit down is to first create jobs."

Mishel argues for a multi-pronged government spending and policy approach, including:

• Maintaining the safety net (unemployment insurance, food stamps, etc.), because "people who are unemployed and get money, they spend it. They don't invest in the stock market. They create jobs."

• Spending on infrastructure.

• Federal relief to the states, which would restore and preserve state jobs

• Directly create jobs:  "How do you create jobs? Give someone a job. We could create a million jobs within six months this way."

• Early retirement, with general revenues subsidizing the social security system to allow early retirement during the next three or four years, which would open up retirees' jobs.

• Realign exchange rates with China to make our exports more attractive.

Rachleff points to the 1930s as evidence that conditions around jobs and employment improve when citizens organize and apply pressure on those in power. The federal government, through programs such as the WPA (Works Progress Administration), created many jobs of a wide variety. Citizen organizing was critical, Rachleff says, to the birth of the WPA, Wagner Act, and Social Security, which provided a stronger safety net for workers. Had they not “been pushed” President Franklin Roosevelt and Congress would not have created or enacted those policies or programs. Progress occurred, he explains, because people were highly politicized.

Rachleff cites the Croatian Fraternal Union as an example of blue-collar immigrant workers, previously on the sidelines, who jumped into the fray, organized, and became United States citizens so that they could put grassroots pressure on the federal government to change its policies. The situation is very different today, according to Rachleff, who says we are presently facing both an economic crisis and a pervasive, worldwide neo-liberalism that attacks government, the public sector, and workers in general. He says the recent version of a federal “stimulus program” was a Wall Street bailout, not a jobs program on par with what was implemented in the 1930s.

The assault on workers is evident, Rachleff contends, in efforts by state legislatures to advance anti-union bills. In his view, developments in Wisconsin have been “phenomenal,” because the response to that state’s government’s attacks on public employee unions was so broad. The unionized private sector, non-unionized private sector, students, farmers, welfare recipients, and others all came together to voice their disapproval.  A march in Minnesota on April 14, marking the anniversary of Rev. Martin Luther King’s assassination, was also “remarkably large and energetic.” However, such events are far from the norm.

At the federal level, there has been little to cheer about when it comes to worker rights. For example, President Obama did nothing to promote the Employee Free Choice Act. The bill’s purpose was to amend the National Labor Relations Act to establish a system to enable employees to form, join, or assist labor organizations. That piece of legislation, Rachleff says, was dead on arrival. Even though the nature of jobs is shifting, with more employment in the service sector, that fact does not preclude unionization. Workers in nursing homes, fast food outlets, and schools, could all earn better wages and benefit from various protections if they were unionized, Rachleff says.  Today only ten percent of the workforce is unionized.

Developments at St. Paul’s Ford plant constitute a dirty secret, Rachleff offers. Workers who once held good jobs at the plant accepted buyouts and were replaced by workers who took those same positions at half the pay and with inferior benefits. He cites similar trends among pilots and flight attendants, yet another indication of movement toward the creation of more mediocre jobs. As a result, the middle-class continues to shrink, the lower-class grows, and wealth is increasingly concentrated in a smaller number of hands.

The Itasca Project’s “Charting a New Course: Restoring Job Growth in the Minneapolis-St. Paul Region” suggests that although the area has managed to maintain many of its strengths—a highly educated workforce, excellent quality of life, being home to numerous Fortune 500 companies, and a center of cutting-edge research—trends in job growth are fraught with problems. If those trends persist, it concludes, the state’s economy and quality of life will continue to be in jeopardy.  

Kathy Tunheim, Gov. Mark Dayton’s senior advisor on jobs, argues that a fundamental shift must occur in the narrative the state uses to talk about jobs, and how it perceives itself in a global economy, if jobs are to be retained. Tunheim observes that some Minnesotans still cling to a narrative, stretching back to the 1970s and 1980s, which says that workers will stay once they come and develop an appreciation for the state’s many assets. This, she warns, is less true than ever. Many workers are being offered incentives to move elsewhere that they cannot refuse. Technologies make it easier to relocate and still maintain important relationships in the state. Also unproductive, Tunehim says, is a common narrative of the past decade, one that emphasizes what is wrong with Minnesota as a place for doing business. The governor, she says, is looking at what can be done about regulations, tax and licensing policies that the Itasca Project has cited as impediments.

More useful for business and job retention, says Tunheim, are narratives that focus on the state’s extraordinary assets, including its highly educated workforce, wealth of natural resources, a private economy that is “the envy of the world,” and quality of life. As a state operating in a global economy, Minnesota “must be clear-eyed about our competitive advantages,” including in exporting and manufacturing, and then align future needs with the creation of talents through education. To those ends, Tunheim is engaging representatives of the public and private sectors throughout the state in conversations about jobs that will result in a new “toolkit” based on initiatives that have already proven successful. In addition, she stresses that the state must maintain its commitment to public and higher education in order for there to be a sufficiently strong workforce to attract and retain businesses. “It would be unfortunate if we retreated from our long-held belief in and support of education.”

Grow Minnesota, a subsidiary of the Minnesota Chamber of Commerce, is a business retention program that Bill Blazar speaks enthusiastically about.  He describes it as a successful effort on the Chamber’s part to create and retain business and hence jobs throughout the state. Local chambers, 56 in all, conduct conversations with local business owners and leaders, and then, in many cases, provide assistance. In 2010, this involved retention visits to 825 businesses. For many of the companies visited in 2010, this was a second, third, or fourth such exchange. The goal for 2011 is 1,000 such visits. While these numbers represent a small percentage of the total number of businesses in the state, Blazar believes that such visits are a vital part of building relationships that make it more likely a business will remain in the state, retaining and creating new jobs. He says he is optimistic that if the state works hard to cultivate jobs, then efforts like Grow Minnesota will help ensure that those jobs stay.

Bruce Johansen

A Roseville native, Bruce Johansen (bruce.johansen@gmail.com) is a freelance writer and active resident of the Seward neighborhood.