Over the course of 2021, Northspan Research Intern John Lukan undertook an in-depth research project on the history of
the Northland economy. John is currently a senior at the University of Minnesota–Duluth majoring in business analytics. He analyzed U.S. Census data and worked with Northspan staff to develop a framework to explain changes in the region over the past 50 years.
The findings of this research identify economic trends in the Northland by charting population, average household income, and industry changes. Here is a summary of his findings:
The Northland has gone through serious changes in population, income, and dominant industries. The Northland originally was built largely on blue collar industries such as mining, agriculture, timber, and manufacturing, but has since shifted to add more jobs in white collar professions like health care, information, and other business-related occupations. We have also seen growth in what has come to be known as the “pink collar” industry, which includes jobs that fall into neither of these traditional categories.
Our research grouped the Northland’s industries into three categories:
- Blue collar is defined as the industry that is mostly manual in nature and involves the skilled trades. Agriculture, mining, construction, manufacturing, and transportation are examples of blue collar industry sectors.
- White collar is defined as the industry with sectors that are office-based in nature or require extensive schooling. Some examples are health care, education, information technology, and more general categories of business and professional services.
- Pink collar is a newer collar classification for industries that don’t explicitly fit the blue or white collar categories. These industries aren’t necessarily amenable to long-term careers and are characterized by high turnover. Examples include hospitality, entertainment, and retail. It also includes service sectors and jobs in areas such as health care that do not require advanced degrees.
Between 1970 and 2010, the Northland experienced a large shift in the number of workers in its industries. What was once a predominantly blue collar region built and defined by mining and manufacturing is now becoming a medical center and information technology hub for employment.
Agriculture and mining, for example, which are grouped into the same industry sector in census data, saw a reduction in employment of 242% from 1970 to 2010, while manufacturing had a reduction of 183%. Those massive declines in blue collar workers were accompanied by increases in the medical and information industries, which grew by 70% and 100%, respectively.
The shift in the dominant industry from blue collar to white collar was a slow change that saw an inflection point around 1990. Based on available census information, 1990 saw the lowest inflation-adjusted average household income per county and also the lowest population level in the region. This illustrates the point at which the region was shifting in its dominant industries. Since 1990, most counties have seen growth in income and wages while the number of workers in the white collar industry has grown steadily across the entire Northland since data collection began in the 1970s. In contrast, the blue collar industry has maintained 1990 levels of employment.
The pink collar industry has also seen substantial shifts. Retail and the entertainment/serving industries have seen large increases since 1970, with employment growth rates of 28% and 67%, respectively. Much of this growth came after 1990 for the entertainment industry, while retail saw a huge climb into 1980, only to crash in 1990 and hover around the same level through 2010. The number of jobs in the entertainment industries grew from 6,719 in 1970 to over 17,000 in 2000.
Population changes over the past 50 years have also been significant. The Northland was growing from 1960 up until the 1980s, when there was a crash in population as people left the region. There was a decline in population across all counties and almost all industries during this timeframe. In total, the Northland saw a decline of 30,000 people between the 1980 and 1990 censuses. Income and employment levels dropped in proportion to this exodus. Then, from 1990 to 2000, all counties in the Northland grew their populations. Some counties grew more than others, but populations in each went up and down proportionally with each census.
Our findings show that the Northland has experienced shifts in population and income that at first were decreasing. Most counties are now seeing increases in population and average household income, along with steep changes in industry sectors.
Blue collar industries were on a steep decline in the region from 1970 before bottoming out in 1990. With the loss of those blue collar jobs, white collar jobs see an increase from 1990 to 2010, reflecting the regional shift that began in 1970 and continues today. The increase in office and technology jobs coincides with the dot-com boom and advances in technology that created greater demand for those roles.
Data shows that all these changes are interrelated. Blue collar industry decline in the 1970s and 1980s took a serious toll on the Northland. These industries have largely stabilized since, and they continue to offer relatively well-paying jobs. While there is a strong correlation between concentration of white collar jobs and income, these effects tend to be limited to a small number of affluent urban and exurban census tracts, especially for the most lucrative professions. The growing pink collar industries, meanwhile, have not always seen wages keep pace with their blue and white collar neighbors.
The Northland’s economic and demographic future will be closely related to its ability to continue to grow white collar jobs, revive blue collar jobs, or increase incomes for people in pink collar jobs. Northspan looks to build on John’s research and further expand our understanding of the forces that support the Northland economy.