Data from DEED indicates that the pandemic-induced recession has very different dynamics and characteristics from past recessions.
As the pandemic set in, Minnesota lost 357,000 jobs. In the Duluth metro area (Carlton County, St. Louis County, and Douglas County in Wisconsin), we lost 17,500 jobs initially, of which 57% returned through November. The declines in December meant that we ended the year with 42% of those jobs recovered. After increasing for a month, the labor force shrank again in December, leaving the northeast Minnesota planning region with its smallest labor force since 1996. Currently, unemployment claims are declining again, but still elevated.
“In order to assess the full impacts of the pandemic on northeast Minnesota, we must look at both unemployment and labor force trends,” pointed out Carson Gorecki, Regional Labor Market Analyst for Northeast Minnesota. “With the onset of the pandemic, many workers opted to stop looking for work altogether. Whether these workers choose to re-enter the labor force will in many ways indicate the strength of the recovery for the region.”
Job losses and recoveries have looked different in urban areas compared to rural areas. Rural areas have typically had higher unemployment rates compared to the Duluth metro area. The unemployment rate for the non-Duluth portion of northeast Minnesota has returned to close to pre-pandemic levels. Duluth’s rate remains elevated at around 66% higher than December 2019. Overall, employment declined marginally more in Duluth than in the rest of the region, compared to a year ago.
Pronounced differences are also evident looking from industry to industry. Service-providing industries have been hit harder than goods-producing sectors. Also, industries which are more amenable to telework have sustained fewer lost jobs.
Pew Research Center’s U.S. Census Household Pulse Survey found appreciable differences in the pandemic experience of workers in lower income jobs, compared to middle income and upper income brackets:
- Higher percentages of lower income workers reported telework is not an option for their responsibilities, as well as lower levels of satisfaction with protective measures being taken in their workplace.
- Among employed adults who are currently working from home all or most of the time:
- A majority report that the transition to remote work was “very easy” or “somewhat easy.”
- 4 in 10 report more flexibility in terms of hours and when they work.
- 54% say they would like to work from home after the coronavirus outbreak ends.
- The transition to remote work has been more difficult for employed adults with children.
The pandemic has also disproportionately impacted:
- Women
- Prior to the pandemic, women accounted for about 20% of continued unemployment claims. From April to September that share rose to over 50%.
- Minorities
- Black or African American workers are still more than twice as likely to claim unemployment benefits than white workers in northeast Minnesota. Hispanic or Latino and American Indian/Indigenous workers were also more likely to file unemployment claims.
- Workers in the youngest and oldest age groups
- Workers in the youngest age groups were more likely to file for unemployment insurance and workers in the oldest age groups were more likely to be unemployed for longer.
- Workers with the lowest educational attainment
- Those with high school degrees or less represented 24.5% of the labor force, but almost 40% of unemployment claims.
- Lowest wage earners
- Those workers with jobs paying less than $14.70/hr claimed unemployment insurance for an average of three weeks longer than those earning more than $21.40/hr.
The first two rounds of the Paycheck Protection Program (PPP) distributed 4,477 loans ($355 million) March-June, resulting in the retention of an estimated 37,277 jobs that otherwise would most likely have been lost. Almost 40% of jobs in northeast Minnesota were potentially retained. Loans that went to businesses in construction, retail, other services, accommodation and food services, and healthcare made up 60% of all PPP loans.
Unemployment is down, but so is the labor force. As uncertainty in the labor market continues, DEED’s Labor Market Information (LMI) office is monitoring employment statistics, unemployment rates, wages and salaries, and other indicators. Contact Regional Labor Market Analyst for Northeast Minnesota Carson Gorecki at carson.gorecki@state.mn.us for more information and data.