Where have all the workers gone? Short-term, long-term factors contribute to employment rates

ALEXANDRIA — Statistically speaking, Minnesota has a tight labor market and a low unemployment rate. Yet why do so many businesses have "Help Wanted" signs in their windows?

On Thursday, April 27, the Alexandria Rotary Club heard a presentation from Anthony Schaffhauser, northwest regional analyst with the Minnesota Department of Employment and Economic Development, which attempted to answer this question.

The bottom line is, a combination of long-term and short-term effects have combined to create the current situation, Schaffhauser said.

"We're in the tightest labor market ever, at least as far back as we have statistics," Schaffhauser said. "Looking at the unemployment rate, we have a record low, 1.7% in October 2021, and repeated that record for a couple months in 2022. What's more amazing to me than that is that the number of unemployed workers was the third-lowest ever."

One of the short-term effects on the labor market is the COVID pandemic.

"We had a huge drop in employment, obviously, in 2020, both in Minnesota and Douglas County … There was a huge drop in jobs, and then a springback almost back to where we were," Schaffhauser said.

Supply chain issues and long COVID are factors, as well.

Schaffhauser said the Brookings Institute reports a 1.8% drop in full-time equivalent workers, about 334.

"It's not so much that everybody that has long COVID isn't able to work," Shaffhauser said. "It's that they're working fewer hours, as well."

Some of the long-term factors are the availability of child care and the increasing size of the elderly population.

The declines in the job market are in the age of 22 to 34, Schaffhauser said.

"Those are typically people that participate at very high rates in the labor market, and that's what's not back," he said. "That's the child care impact."

The elderly care impact most affects those from 55 to 64, Schaffhauser said. Many people in this age bracket have found themselves caring for a parent, he said.

The way businesses can survive is to be proactive, he said.

"Successful strategies and innovations that businesses do, that governments do, that nonprofits do in order to increase the workforce are going to pay off year after year after year, because we're not just trying to react to a short-term bump from the COVID impacts," Schaffhauser said. "This is going to be with us for a long time."