Minnesota saw employment increases in nearly all of its sectors in 2022. Leisure and hospitality recorded the largest over the year growth at 10%, while Construction was the only industry reporting a decrease in employment.
Minnesota saw employment increases in nearly all of its sectors in 2022. Leisure and hospitality recorded the largest over the year growth at 10%, while Construction was the only industry reporting a decrease in employment.
December saw the end of more than a year of job growth and record-breaking unemployment levels in Minnesota. Less than half of a percentage point decrease was enough to end the state’s 14-month streak.
Private sector job gains were entirely outpaced by the loss of more than 6,000 government jobs — most of which were in local government, according to the state Department of Employment and Economic Development.
“Minnesota’s job growth took a holiday break in December, but the private sector grew and indicators point to a strong underlying economy,” DEED Commissioner Steve Grove said.
Labor force participation in the state stayed steady, with 3,367 entering the workforce, but the state unemployment rate rose to 2.5%, which is still lower than the national unemployment rate of 3.5%. Inflation has continued to affect Minnesota’s workforce as it outpaces wage growth in the state.
In the past two years the average hourly earnings of a private sector employee in Minnesota rose 10.2%, according to DEED. Unfortunately, in the same time period, inflation rose by 13.9%, meaning the average worker has less buying power now than they had two years ago.
Throughout 2022, all but one supersector in the state recorded job growth. Construction lost 3,468 jobs, or 2.8%, over the year (OTY), specifically in heavy and civil construction and specialty trade contractors.
Outpacing every other sector, leisure and hospitality added more than 20,000 in the year, increasing its workforce by 10%. This growth was driven by the arts, entertainment and recreation subsector with a 30.4% increase throughout the year.
This growth more than doubled what all other supersectors recorded OTY, and is likely due to the lifting of COVID-19 restrictions in the state. Gov. Tim Walz lifted all state restrictions on May 28, 2022, and ended masking requirements on July 1, 2022.
More than half of these sectors’ growth outpaced their nationwide comparison, however, none of the sectors recorded a decrease in the U.S. numbers, according to DEED.
Even though the state couldn’t extend its economic streak another month, Walz unveiled a budget proposal on Jan. 19, that hopes to address any inadequacies.
“The Governor and Lieutenant Governor’s economic budget proposal they’ll announce today includes a bold set of strategic priorities that will bring more jobs, workers, and opportunity to our state,” Grove stated.
The budget proposal is the second of four packages within the One Minnesota Budget and includes a $4.1 billion package that intends to make an economic impact on most, if not all, sectors. In addition to everything else, the proposed budget includes the largest agriculture budget in the state’s history, which is more than $100 million.
“I’m committed to making sure Minnesota remains competitive in a global economy. From our nation-leading agriculture industries to Minnesota-based companies paving the way for a clean energy economy, Minnesota has one of the most diverse and most resilient economies in the country,” Walz said. “This budget invests in the people and businesses that made our economy strong in the first place, and it protects the natural resources that Minnesotans cherish most. By attracting and building a workforce that makes Minnesota a destination state for teachers, nurses, entrepreneurs, farmers, small business owners, and skilled workers, we are building an economy that will remain strong for generations to come.”
Walz’ proposal includes more than 50 recommendations separated into seven main categories including Working Minnesotans, Business and Economic Development, Workforce Development, Communities, Water, Soil and Resources, Climate and Agriculture.
Below we’ll break down some key components from the proposal:
• All workers can accrue up to 48 hours of earned sick and safe time throughout the year.
• $40 million would go towards the Expanding Opportunity Fund, which will provide additional capital for nonprofit lenders to accelerate small business growth.
• A $60 million investment would fund employment services and training to bring people of color into the workforce at family-sustaining wages.
• Creating the Minnesota Reasonable Accommodation Program will reimburse small and mid-sized employers for expenses tied to providing reasonable accommodations for employees with disabilities.
• A couple proposals would raise wages and rates for home care workers, workers with disabilities and long-term care workers.
• An additional $276 million in new funding would go towards the Border-to-Border Broadband Development Grant Program.
• $114 million would go into the State Competitiveness Fund, which would allow billions of dollars in federal funding to become available through the Infrastructure Act and Inflation Reduction Act.
• Many proposals are meant to directly fight climate change within the state. This includes plans for clean energy, net-zero greenhouse gas emissions and efforts to enhance and fortify homes.
• Access to beginning farmer grants will be expanded to award a wider group of people.
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