Tom Stinson is Minnesota’s state economist, and a professor in the Department of Applied Economics at the University of Minnesota. In a January presentation to the One Minnesota legislative policy conference at the Humphrey Institute, Stinson said that workforce development is crucial to Minnesota’s future, both in terms of the number of workers and the quality of workers. In that presentation he cited three keys for Minnesota’s future economic success: retention, recruitment and retraining. Stinson agreed to talk to the TC Daily Planet about the future of work and jobs in Minnesota.
TCDP: What are Minnesota’s short-term concerns regarding work and jobs?
If the definition of short-term is two-three years, the concern is that we have an unacceptably high rate of unemployment and we haven’t created enough jobs to be back where we were at the start of the recession.
Another concern is the loss of manufacturing and construction jobs, and a lot of those simply not going to come back. So we’ll have lots of people who have skills that were marketable before the recession but not in a newer landscape. So we’re going to have to train workers with new skill sets that match available jobs.
TCDP: What should Minnesota do to address job creation and job training?
I’ll start with job training. Part of that is the responsibility of the individual. Individuals have to recognize that they have to retrain. But part of it is making sure that people understand the opportunities and alternatives available to them. There is a responsibility on the part of the public sector to provide information so that people know what their opportunities and alternatives are.
Now job creation. The place that we can have an impact is in the bonding bill. We can run a deficit there by borrowing.
We have to be conscious that not all capital projects create the same amount of employment. Buying new land for a park, for example doesn’t create new jobs, but building new trails in an existing park would create new jobs because it’s more labor intensive. … Repair and renovations of existing state assets, painting, new electrical work, all those kinds of things can happen relatively quickly and don’t take a lot of planning to start. So preservation is good because it’s very labor intensive … but big capital jobs like new bridges, new buildings and all those kinds of things … the pay-off to those is always several years down the road.
TCDP: What economic and demographic trends will affect the future of work in Minnesota?
I’m quite optimistic about economic activity in Minnesota in the next 10-15 years. We’re going to have a large number of people reaching retirement age and retiring and a smaller number of people coming into the work force. So 2/3 of new jobs will be to replace the people who have retired, and only 1/3 will be new. We won’t have to create as many new jobs to provide full employment in the economy.
TCDP: Is this what you mean by the new normal?
One of the big parts of the new normal is that we’re aging as a society. We’re used to seeing individuals age, but we’re not used to seeing states and regions and communities age.
We’re going to have a slower labor force growth. The work force, and labor and talent, is going to be the scarce resource. When the baby boomers came into the work force it was a buyer/employers market. Now we’re going to see fewer people looking for jobs. And that’s going to create competition for new workers. The number of people 18-24 is actually going to decrease compared to what we’ve seen over the past decade. So the policy implication is, how do we make Minnesota an attractive place to recruit workers in other states as well as in other countries?
[Another challenge:] We don’t want to lose the skills and talent and the human capital that [retirement age] people have, so how do we use these people who no longer want to work 40 hours but still want to contribute to the economy?
Minnesota has been hugely successful as an economy. In the 1960s we were 95 percent of the U.S. average in per capita personal income, and now we’re 106 percent of the U.S. average. We were 26th, and now we’re ranked 12 or 13th.
Part of that is due to the education investments that we’ve made. Less than half [of Minnesota workers] in 1960, but now more than 92 percent have a high school diploma. We’ve invested in the work force and produced an educated and skilled workforce. … If we look to the future, the place where there’ s a great resource for stronger economic growth in the state that could be tapped is this mature workforce. So the question for policy makers is, how do we make sure that these people can transition to part time and volunteer opportunities?