The lost decade: Minnesota has 76 percent fewer job openings


Over the last few years, it has become increasingly clear that the unemployment rate provides an incomplete picture of the job market. This is not only because of the reasons usually given: that the figure fails to include the large number of people working part-time who want to be working full-time, or of the growing number of people who’ve become so discouraged by their job search that they’ve given up. These deficiencies are real, but they don’t go far enough in explaining what’s missing from the perspective of the workforce.

The greater underlying weakness of the unemployment rate as an indicator lies in its failure to measure economic opportunity (or the lack of it) for workers, especially workers who either need a job or want a better one. For a more complete picture of the job market, we can look at the latest Job Vacancy Survey by the Minnesota Department of Employment and Economic Development (DEED). It conducts this survey twice a year; the most recent one looks at 2010’s fourth quarter.

What’s especially valuable about the Job Vacancy Survey is that it not only shows the number of unemployed workers, or job seekers, throughout the state but also shows the number of unfilled jobs, or job openings. By looking at job openings as well as job seekers, the survey provides a more complete picture than the unemployment rate of what the labor market looks and feels like to an unemployed or underemployed worker.

For a worker who’s been without a job for 37 weeks (the national average duration of unemployment), it’s more useful to learn that there are still six job seekers in Minnesota for every job opening than to be told that the state’s unemployment rate has finally dropped below 7 percent.

What’s more, whereas the unemployment numbers treat all jobs as equal, the job vacancy numbers provide useful information about the quality of job openings: they tell us whether jobs are full-time or part-time, whether they offer health care, how much education or training they require, and, finally, how high the wage levels are.

For example, of the 33,800 job openings in the current survey, only 61 percent-or 20,600 openings-are full-time. This means job seekers outnumber full-time openings by 10-to-1.

It’s worth noting that the survey provides no evidence of a shift to high-skill occupations. Only 45 percent of openings require education or training beyond high school. (This figure has remained virtually unchanged for the last ten years.) Though the survey shows that jobs with high skill requirements pay far more than jobs without them, it also reveals a shortage of jobs that demand those skills. As long as this shortage persists, raising the skills of the workforce will do little to raise overall wages.

The median wage for all job openings is $10.80 per hour. JOBS NOW’s Cost of Living research shows that in a Minnesota family of four with both parents working, each worker must earn about $14 per hour to meet basic needs.

We can also look back as far as the beginning of the last decade, to the fourth quarter of the year 2000, when DEED first did the survey. At that point our state had just 83,000 unemployed workers competing for 140,000 unfilled jobs. For each job seeker, there were nearly two job openings.

But by the end of 2010, the number of job seekers had risen from 83,000 to 206,000-a 248 percent increase. Meanwhile, the number of job openings fell from 140,000 to less than 34,000-a 76 percent drop.

Here’s another way to think about it: We have two and a half times more job seekers than we had ten years ago, but only one-fourth as many job openings. Job seekers now outnumber job openings in Minnesota by 6-to-1.

Of the large number of openings that vanished over the last decade, only 16 percent were lost during the Great Recession and its aftermath. Most of the decline took place earlier, during the 2001 recession and the two years that followed.

From 2004 through 2007-the best four years of the decade for Minnesota’s economy-we gained back only 150 of the almost 90,000 openings that disappeared in the first three years of the decade.

The Job Vacancy Survey shows a steep decline in opportunities for Minnesota workers, a decline that cannot be attributed only to the two recessions. Besides the recessions, we also had four years of recovery when almost nothing was recovered-an entire decade of job market failure.

Kevin Ristau is Education Director at the JOBS NOW Coalition, a statewide research and policy coalition dedicated to promoting jobs that pay a family supporting wage-enough for a family to pay for basic needs.