1. Rochester Labor Market Outlook 2013 - 2020 Brent Pearson Regional Labor Market Analyst MN Dept. of Employment & Economic Development

2. About DEED’s Regional Analysts Collaborate with regional stakeholders on new research Extend access to DEED reports and statistics Conduct presentations and training on regional economy and labor market Original research and analysis intended to answer “the tough questions” Five regional analysts stationed across the state

3. LMI Performance 1.Current Conditions 2.Wage Details 3.Opportunities for Job Seekers (JVS) 4.Outlook (projections) 5.MN Labor Demographics

4. Labor Market Supply (Unemployment Rates) Recessionary Peaks = 9.8 US, 9.0 MN, 8.2 in SE Use as guide only (economic indicator, not practical for job seekers) Unemployed/Total Labor Force (Unemp. + Emp.) MN 5.1% in Aaug (low), 7.3 (US), 4.5 (SE), 4.1 (Rochester) Regionally, typically a tick below state and way below nation (MSA impact, diverse industry)

5. 1. Current Conditions Measured monthly and annually: large cities, county, state, nationally Olmsted, Blue Earth and Nicollet historically lowest (MSA effect) –Mankato-North Mankato MSA had lowest yearly unemployment rate of any MSA every year since ‘98 (caveat) –Rochester/Mankato MSAs have lowest current at 4.1% Recovery continues –Annual drop in Unemp%, totals, increase employed, more vacancies, fewer job seekers/vacancy –Lower % unemp. But trend line mirrors state, nation What IS important (recovery, still work to do) –MN 512% = nearly 152,000+ unemployed –SE 4.5% = 12,000+ –Rochester 4.1% = nearly 2,500

6. Recovery: Still Work To Do JOBS (although good news!) STATEWIDE = WE’RE BACK!! +12,200 jobs in August, 2013 – finally push past pre- recessionary peak of Feb. 2008! SE – Compare to 2007, 6 month lag on data should see Q2 results early 2014. Recovery OTY: (Rec. slower past year except TC Metro)= Rochester up.1% from August 2012; private sector is at pre-recessionary levels in Roch – outstate SE iclosing in (-0.5%) – again, represents 2012 (2013 is coming) STATEWIDE = WE’RE BACK!! +12,200 jobs in August, 2013 – finally push past pre- recessionary peak of Feb. 2008! SE – Compare to 2007, 6 month lag on data should see Q2 results early 2014. Recovery OTY: (Rec. slower past year except TC Metro)= Rochester up.1% from August 2012; private sector is at pre-recessionary levels in Roch – outstate SE iclosing in (-0.5%) – again, represents 2012 (2013 is coming) Region Employm ent 2012 Annual Employm ent 2007 Annual Employm ent Change 2007 - 2012 % Change 2007 - 2012 Rochester, All85,13085,453-323-0.4% Rochester, Private78,94078,844960.1% SE MN, All233,107234,240-1,133-0.5% SE MN, Private203,391204,311-920-0.5% Source: MN Dept. Employment & Econ Development (DEED)

7. 2. Major Employment Industries MNSCSE Total, All Industries 2,644,895101,556232,995 Health Care and Social Assistance 435,51517,47260,422 Manufacturing 305,55519,27436,737 Retail Trade 283,13112,22026,713 Educational Services 216,1869,15618,413 Accommodation and Food Services 211,6717,53118,069 Public Administration 122,3465,34210,105 Administrative and Support and Waste Management and Remediation Services 133,3522,6729,133 Construction 101,5264,0587,929 Transportation and Warehousing 92,5843,2656,960 Wholesale Trade 128,7073,8696,642 Other Services (except Public Administration) 84,5653,0246,289 Finance and Insurance 136,9062,9355,941 Arts, Entertainment, and Recreation 49,8569503,765 Professional, Scientific, and Technical Services 131,2692,2773,717 Agriculture, Forestry, Fishing and Hunting 20,1222,6882,867 Management of Companies and Enterprises 74,7591,0422,770 Real Estate and Rental and Leasing 39,0717791,558 Utilities 14,0785001,470 Mining 6,241257115 Top 5 emp. Sectors mirror state 1 in 4 in SE = HC 1 in 5 in SC = Mfg (1 in 6 SE) MFG hit hard by recent recession -2600 in SC alone Retail Trade = huge, lower wages/more PT/Seasonal Top 5 emp. Sectors mirror state 1 in 4 in SE = HC 1 in 5 in SC = Mfg (1 in 6 SE) MFG hit hard by recent recession -2600 in SC alone Retail Trade = huge, lower wages/more PT/Seasonal

8. Which Industries have recovered well, which have not (SE)? 2009 - 2012 Industries rely on production (rubber mfg+, non-metallic mineral + chemical on rise) and consumption continue adding jobs. Health Care, Administration Support added jobs, food services also added jobs – since 2009. Govt. Jobs dropping (public administration – economic and environment programs hardest hit), so is education OTY – (early bump in recovery 4 th largest industry in region - elementary) Real Estate, Retail, Utilities holding course Recovery mirrors nation – production + consumption up, housing and construction same and govt. funded employment dropping

9. Where Expansion is Important Industry Growth in: Management of companies and enterprises Finance and insurance Transportation & Warehousing Produces or mirrors growth in other industries, shows flow of materials and commerce = good for economic vitality

10. 2. Wages Median $16.99/hr SC Wages drop as head west (SC + SW –SE –State) Reenforces industry average weekly wage findings (higher paid industries – Public Admin, natural resources +_ mining = employment losses or modest gains during recovery) Mfg still essential – about $1.18, Ed/Health = nearly $4 higher than median across all industries +job gains during recovery Median Hourly Wage Need in Greater MN for 1 person – Employer- Provided HC is $11/hr Fam 4 = 2 parents FT = $12.56 Median Hourly Wage Need in Greater MN for 1 person – Employer- Provided HC is $11/hr Fam 4 = 2 parents FT = $12.56

11. Average Work Week Decline Regionally, Nationally All Private Employment Pre-Recession – 33.2 Presently – 32.3 State – 32.7, and 33.1 U.S. – 34.6, 34.0

12. 3. Opportunities for Job Seekers Job Vacancy Survey Survey twice per year 10,000 employers – across state Asks about job vacancies (open-for- hire) and future hiring demands Stratified – touches all industries and places

13. Job Vacancies Job Vacancies up, unemployment down Height of recession = 10 job seekers per opening, 2.6 now

14. Where the vacancies are… JVS – 4Q, 2012 MinnesotaSouth CentralSoutheast Total, All Occupations58,864Total, All Occupations1,987Total, All Occupations4,597 Sales and Related Occupations8,084 Office and Administrative Support334 Sales and Related Occupations787 Food Preparation and Serving Related Occupations6,494 Healthcare Support Occupations238Retail Sales Workers706 Retail Sales Workers6,028 Nursing, Psychiatric, and Home Health Aides223 Healthcare Support Occupations619 Office and Administrative Support Occupations5,976Production Occupations186 Nursing, Psychiatric, and Home Health Aides605 Food and Beverage Serving Workers4,061 Transportation and Material Moving Occupations179Nursing Assistants498 42% of all vacancies statewide = require post-secondary education  (SE =40%, SC=42%) 39% of all vacancies statewide = PT  (SE =49%, SC = 43%) 42% of all vacancies statewide = require post-secondary education  (SE =40%, SC=42%) 39% of all vacancies statewide = PT  (SE =49%, SC = 43%)

15. Job Vacancies Most occupations fit into multiple industries –But we know that most production is mfg Over the year vacancies in MFG have slowed but still gained 165% in past year 16 fold during recovery –MFGs still have hiring needs Technical health care practitioners have some of the highest wages of any occupation, fewer vacancies 2011 to 2012 Healthcare support (dentists assistants, etc.) gained vacancies but slight (lower paid)

16. Occupations in Demand (OID) OID are currently available career opportunities in a region as determined by regularly updated local labor market data The OID list for a region is the group of occupations that rank highest on a Current Demand Indicator which measures local short-term demand conditions Based on:  Job Vacancy Survey (later)  Occupational Employment Statistics (OES)  Unemployment Insurance Claims Available for all Economic Development Regions Updated through June 2013 (Median Annual Salary from Minnesota Salary Survey) Projected Employment Data from the 2010-2020 Minnesota Employment Projections ProgramMinnesota Employment Projections Program

17. Top Occupations in Demand SE Area Name Occupation Change 2010 - 2020 (#) Change 2010- 2020 (%) Replace ment Hires Total Hires Hourly Median Median Annual Southeast Minnesota Total, All Occupations3638414.35962097350$16.99$35,340.39 Southeast Minnesota Home Health Aides245461.85102960$11.01$22,892.01 Southeast Minnesota Registered Nurses*209724.515503650$37.13$77,230.41 Southeast Minnesota Personal Care Aides149669.41701670$10.54$21,920.29 Southeast Minnesota Retail Salespersons145618.223503810$9.74$20,265.11 Southeast Minnesota Heavy and Tractor-Trailer Truck Drivers102627.17501780$18.40$38,273.31 Southeast Minnesota Office Clerks, General87815.99801860$13.30$27,668.77 Southeast Minnesota Medical Secretaries71434.1280990$19.66$40,879.33 Southeast Minnesota Nursing Aides, Orderlies, and Attendants*64515.35401180$12.69$26,398.36 Southeast Minnesota Childcare Workers61023.98001410$10.28$21,376.93

18. 4. Outlook (projections) Projections use an advanced statistical model (BLS) Done every two years – 10 years out (using most recent LMI surveys) Projections – caveat - we can never really know what the future will hold (Rochester $500-million infrastructure – 40,000 jobs? How do you project an event like that?)

19. SE Projections forecast projected job growth and replacement hires

20. SE Outlook…. 26,384 new jobs + 59,620 replacement = over 96,000 projected openings by 2020! Sales, Office, Production, Food Prep, Health Care, Production all project well Arts, farming, architecture, and legal project smallest growth

21. DMC Projections….

22. DEED Projections for Similar (HC TECHNICAL)

23. DEED Projections for Similar (HC SUPPORT) – LOWER PAYING than TECH/PRACTITIONER Southeast Minnesota Employment Projections OccupationPercent Change Total Change 2010-2020 Replacement Hires 2010-2020 Total Hires 2010-2020 Total, All Occupations14.336,38459,62097,350

24. Similar Occs. In all, our message is that the projected job growth due to DMC is not unprecedented. Reasonably attainable, but a few notable differences… (next slide)

25. Differences… But similar message We also show strong growth in health care, service sector, commercial/professional, many of the industries that will be added by DMC. We project to 2020 across all industries, DMC projects growth for their project to 2030 We project for 11 Counties in SE MN, DMC projects for “Rochester Area” Our projections do not include DMC, using 2010 as baseline… (here’s why)

26. Keep in mind (projections) It’s only math Not self-fulfilling prophecy Movement of a major employer into a region cannot be accurately projected –Reason we refine every 2 years, 10 years out Projections merely measure point A results with point B results (not spread uniformly across all ten years – some industry or occupation growth may happen closer to front end of cycle, some later) Useful as a measure gauge of growth/decline, not intended to pinpoint precise number.

27. For more on DMC-related occupational growth measured by DEED Go to: www.positivelyminnesota.com Search: Brent Pearson (or June 2013, TRENDS – for PDF of article, request a copy) Most recent article in my bio: http://www.positivelyminnesota.com/Data_Publications/Economic_Trends_Mag azine/June_2013_Edition/The_Mayo_Clinic_Jobs.aspx

28. 5. Demographics

29. Projected Labor Force 2035 SC 2015 to 2035 labor force shifting into 65+ (upcoming slide) Blue, Earth, Nicollet and Le Sueur projected to increase by 2015

30. Projected Labor Force 2035 SE Projected increase in 8 of 11 counties Projections highest near MSAs (TC and Roch) MSA affect, region includes one MSA, borders another (TC), and near a 3 rd (MKTO- NMKTO)

31. Projected Age of Labor Force Changes by 2035 More workers still in 25 to 44 and 45 to 64 cohort Percentage in 16 to 24 and 25 to 44 down Percentage of 65+ up

32. MN Unemployment Rate by Educational Attainment More education = lower unemp. Rate 58% unemployed (90,000 MN had SOME college) MN UnempRate for college grads – below 4% BLS

33. Commute Corridor Rochester retains significant (76.1%) part of its workforce – workers that live in Rochester, work here! Shares some workforce with Twin Cities Highway 52, key commuter corridor

34. We know where we’re exporting workers to, but where are we pulling from? Last slide shows where people that LIVE in Rochester go for work. This shows where people that WORK in Rochester LIVE. Rochester pulls 53.7 of workforce from rural SE and Twin Cities

35. Summary – Recovery Continues In our 3 rd year of measurable data since recession’s peak Statewide, we’re back to pre-recessionary levels of employment – Roch and SE MN still in waiting for data to catch up (as of 2012, still needed 323 jobs for Roch and 1,100 for SE but private sector was already showing recovery) Some industries are not recovering (public administration, construction, finance) May continue to decline, could be shift, may recover at some point – next few years will tell Unemployment continues to drop as job vacancies rise Manufacturing and health care still dominates the landscape, but other industries such as retail trade, health care, and educational services still high SE needs to maintain industry diversification By 2035, the workforce for aged 65+ will nearly double across the state and parts of SC MN DMC will open more jobs between now and 2030

36. Q & A session later Brent Pearson South Central & Southeast Regional Analyst Minnesota Department of Employment & Economic Development  507-389-1896 (Mankato)  brent.pearson@state.mn.us brent.pearson@state.mn.us Regional Analysis Unit RAO Manager, Twin Cities Rachel Vilsack 651-259-7403 (St. Paul) Central, Southwest Cameron Macht 320-441-6567 (Willmar) Northwest Tim O’Neill 218-825-2183 (Brainerd) Northeast Jan Saxhaug 218-302-8413 (Duluth) Regional Analysis Unit RAO Manager, Twin Cities Rachel Vilsack 651-259-7403 (St. Paul) Central, Southwest Cameron Macht 320-441-6567 (Willmar) Northwest Tim O’Neill 218-825-2183 (Brainerd) Northeast Jan Saxhaug 218-302-8413 (Duluth) Thank You!