The demographic changes forecast for Minnesota over the next 15 years
point directly to the need for continued investment in human capital,
but with careful attention to the actual occupational needs of our
present and projected job landscape.
According to Susan
Brower, we will see slower growth in the labor force going forward.
Over the next 10 years, there will be a decline in labor force members
aged 16 to 64, because of the large cohort of baby boomers moving out
of workforce, she said. We may see some baby boomers staying in the
workforce longer and perhaps taking on second careers in consulting
after retirement. "But that's not enough to counter the massive exodus
of baby boomers from the labor force," she said.
labor force growth rate (for ages 16+) is 0.5
percent (from 2010 to 2015), but it is not projected to reach that
level again in any five-year period through at least 2045.
Historically, on net,
Minnesota loses people to other states, Brower said. Following that
historic trend, this happened both from 2003 to 2010 and from 2011
through 2013. Because of this deficit in domestic migration,
population grows now only because of births and international
immigration. Immigration to Minnesota, both domestic and
international, would have to increase considerably beyond what is
projected in order to maintain the current 0.5 percent growth rate
through 2045, she said.
"It's difficult to say
whether and how much the slower labor force growth is going to
constrain job growth," she said.
"It will depend on whether we are going to be able to fill the demand
for workers by attracting new people to
Minnesota, by training
and retraining Minnesotans already living here or by realizing other
gains in per-worker productivity. There are a lot of variables making
it hard to put an exact number on the gap between the jobs and the
workers, especially as they align in any particular occupation and
region of the state. We know that we currently have a number of
potential workers in
that we're not fully utilizing. Development of their skills in areas
of occupational shortages needs to be an ongoing policy focus.
Real GDP growth is a
function of growth in the working-age population, in labor-force
utilization and in labor-force productivity.
Brower said we might be able to
influence working-age population growth by doing a better job of
attracting and retaining people in Minnesota. "It remains to be seen
how effective we will be at doing that, because many other states
will be in the same position with aging populations and a slower
growing labor forces" she said. "It's going to mean more competition
for workers, especially those with high-demand skills, all around."
She said we could have some impact
on labor-force utilization growth, that is, the increase in the
percentage of the working-age population in the workforce. We must
look at how we can make our workplaces more accommodating so that
every last person who is able to work and wants to work can do so,
including parents of young children or others with caregiving
duties, people with disabilities, those needing flexible schedules
and those who have historically had less success in the job market.
She believes the greatest potential
for us to impact our future economic trajectory is through labor
productivity growth: "making stuff more efficiently or making stuff
of greater value, which is typically done by the highly skilled and
highly educated part of our workforce." She said the productivity
growth holds the potential for countering Minnesota's slower
Brower said a study of
other countries that have experienced slower labor-force growth, like
Japan and Italy, suggests that the slower labor force growth in the
could result in a 0.7 percent reduction in U.S. GDP per year.
demographic forces that produce a slower growing labor force are
longer life expectancies and lower birth rates.
In the Midwest
and Northeast, those growth factors are not compensated by migration.
Our peer states in the
Midwest (except North Dakota) are undergoing this transition, Brower
said. A lower birth rate is common to the whole
causing a new overall rate of growth that we're not used to.
She pointed out that the Southwest is in a very different position and
that the situation in
North Dakota has changed
in recent years due to the oil boom there.
The U.S. is
experiencing more international in-migration than other countries.
Brower said that because
of sizable in-migration, the projected 0.7
percent reduction per year in U.S.
GDP due to slower labor-force growth is lower than it would otherwise
One reason our state's
international in-migration is stronger, she said, is that we have a
slightly higher concentration of jobs in higher-skilled industries.
She pointed out that Rochester is one of the top metro areas in the
country in terms of pulling in people on H1-B visas. A second reason
for the strong in-migration is
active history of refugee resettlement.
The percentage of
Minnesotans 25 and over with a bachelor's degree or higher is highest
among those of Asian non-Hispanic ancestry.
Brower said these
figures include people who are foreign-born, as well as those who've
been here for several generations. Among Asian non-Hispanic
Minnesotans, 46.3 percent have a bachelor's degree or higher, compared
percent of white non-Hispanic Minnesotans, 20.1
percent of black non-Hispanic Minnesotans and 9.0
percent of American Indian Minnesotans.
Asian Indian non-Hispanic Minnesotans have the highest percentage of
people with a bachelor's degree or higher, 88.6 percent. Brower
pointed out that the Asian Indian population in
is nearing the size of the state's Hmong population.
After their first 10
years in the U.S., the percentage of foreign-born Minnesotans who are
working is comparable to the percentage of Minnesotans born in the
immigration bolstered Minnesota's labor force growth in the 2000s.
Brower said immigration
will be important to the growth of the labor force and population
growth in the future, because by about 2040, the number of deaths in
our population is projected to surpass the number of births. "At that
point we'll really need to be importing Minnesotans in order to grow,"
attainment of Minnesotans of Asian ancestry tends to be lower for
groups who arrived in Minnesota as refugees, compared with people who
were recruited here for their skills.
Brower said many people
recruited for their skills are on temporary H1-B visas.
proportion by far of foreign-born
residents lives in the Twin Cities metro area, with high
concentrations in places like Brooklyn Park.
Brower pointed out that
in Greater Minnesota there are pockets of concentration of immigrants,
sometimes driven by agriculture and by food-processing businesses, and
sometimes by high-skilled jobs such as doctors and other STEM workers.
As young adults,
people who move across state lines tend to do so for job
This especially true for
those who are highly-educated and highly-skilled. At the lower end of
the skills spectrum, young people move for jobs as well, although in
their case it may be for any number of jobs that may be waiting for
them, rather than for any particular job offer.
Minnesota has a
fairly consistent pattern, on net, of gaining people in their younger
working years and losing people once they reach their 50s.
Brower said this has
been consistent for at least 30 years.
The states receiving the most older
include warm states, like California, Texas, Arizona and Florida, and
other neighboring Midwestern states, like
Brower said our domestic
in-migration depends both on how much demand we have for labor and on
our weather. "Our well-being is going to rest on the quality of the
jobs we have," she said. But she also pointed out that Minnesota,
unlike fast-growing states like California and Arizona, has abundant
water. "The fastest-growing states," she said, "have the lowest water
resources, which will be a growing challenge for them in the years to
We're going to need
to continue to attract people to the state both domestically and
internationally in order to continue to grow.
In response to an
interviewer's question about whether
should take a position on immigration in general and on H1-B visas in
particular, Brower said immigration is typically a national issue and
very few states have taken their own policy stance on immigration.
However, the state, including private, private and non-profit
organizations can do things to make the state more or less attractive
to would-be movers.