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Wholesale Trade in the Northwest

by Chet Bodin and Cameron Macht
April 2015

In the Middle

Although it often operates behind the scenes, Wholesale Trade has been one of the fastest growing and most important industries in Northwest Minnesota. Unlike the ubiquitous advertisements and store fronts in the closely related Retail Trade industry, wholesalers serve as an intermediate step in the distribution of merchandise, buying and selling products to other businesses and typically operating from a warehouse or office.1

The two main sectors in wholesale trade involve merchant wholesalers of durable goods, such as motor vehicles, machinery and equipment, construction materials, and more, and merchant wholesalers of nondurable goods, such as paper, chemicals, groceries and alcoholic beverages, farm products, petroleum products, and consumer products like apparel, footwear, books, and more. The region also has a small concentration of employment in wholesale electronic markets and agents and brokers, which arranges the sale of goods on behalf of the buyers and sellers.

Through the third quarter of 2014 wholesale trade provided just over 11,700 jobs at just under 650 business establishments in Northwest Minnesota, accounting for about 5.3 percent of total employment in the region. These businesses added 1,850 net new jobs over the last four years, a significant 18.8 percent increase, which was more than four times as fast as the total of all industries in the 26-county planning region grew (see Table 1).


Table 1: Northwest Minnesota Planning Region Industry Employment Statistics

NAICS Code

NAICS Industry Title

Third Quarter 2014 Data

3Q 2010 - 3Q 2014

Number
of Firms

Number
of Jobs

Quarterly 
Payroll

Average
Weekly Wages

Numeric
Change
in Jobs

Percent
Change
in Jobs

0

Total, All Industries

16,604

220,983

$1,960,479,773

$682

9,060

4.3%

42

Wholesale Trade

649

11,706

$140,811,963

$925

1,850

18.8%

423

Merchant Wholesalers,
Durable Goods

261

6,508

$79,222,807

$936

1,621

33.2%

424

Merchant Wholesalers,
Nondurable Goods

332

4,726

$56,208,408

$914

215

4.8%

425

Wholesale Electronic Markets,
Agents and Brokers

56

472

$5,380,748

$876

14

3.1%

Source: DEED Quarterly Census of Employment & Wages (QCEW) program


Much of this recent job growth was concentrated in the durable goods sector which added over 1,600 jobs and jumped 33 percent from the third quarter of 2010 to the third quarter of 2014. The largest subsector was electrical and electronic goods merchant wholesalers, but the machinery, equipment, and supplies subsector also saw strong employment gains. Merchant wholesalers of nondurable goods also saw slower but steady job growth, gaining 215 net new jobs during that timeframe, particularly in farm products and miscellaneous nondurable goods.

Economic Impact

Not only does Northwest Minnesota have a high percentage of jobs in wholesale trade, the industry also provides a high percentage of the region’s total payroll. As shown in Table 1, average weekly wages were over 35 percent higher in wholesale trade than the total of all industries, a difference of about $240 per week. For the average worker that would add up to more than $12,000 in additional wages over the course of a year.

Average weekly wages in the wholesale trade industry improved from $820 per week in the third quarter of 2010 to $925 in the third quarter of 2014, a 12.8 percent increase. That was right in line with wage growth in the total of all industries, but since wholesale trade was also adding a large number of jobs, its contribution to total payroll has been increasing much faster.

From that perspective, total payroll is a helpful indicator of the industry’s economic impact on the region. Total payroll in wholesale trade increased over 30 percent over the past five years, twice as fast as the total of all industries, and now accounts for more than $550 million in wages (see Figure 1).


 Figure 1: Wholesale Trade Employment and Wage Trends


Occupations in Demand

DEED’s staffing matrix provides a list of occupations in wholesale trade, showing which jobs are most likely to be in demand in the industry in the Northwest Minnesota planning region. Wholesale trade firms reported employment in more than 300 different occupations, ranging from obvious ones like customer service representatives and truck drivers to less common jobs like multimedia artists and printing press operators.

In Minnesota one of the most prevalent careers in wholesale trade is sales representatives. Two of the important subsectors involve one track that is involved in sales of technical and scientific products and one that is not. Both occupational subsectors are in high demand among wholesalers and earn high wages, but they have very different educational requirements. Positions that sell technical and scientific products generally require a bachelor’s degree and earn median wages of nearly $27 an hour. Sales representatives excluding technical and scientific products earn median hourly wages just over $25 an hour at the median but typically need just a high school diploma to get started.

Educational requirements vary widely in wholesale trade, offering opportunities for job seekers of all backgrounds. The majority (57.1 percent) of occupations in wholesale trade require a high school diploma or equivalent. Fifteen percent can be gained with less education than that. In contrast, about one-fifth (20.4 percent) require a bachelor’s degree or higher, and about 7 percent need a postsecondary vocational award, certificate, or associate’s degree (see Figure 2).


Figure 2: Education Requirements, Wholesale Trade Occupations 


Among the top 30 occupations in the wholesale trade industry, more than two-thirds can be acquired with a high school diploma or less, and less than one-third demanded some postsecondary training or bachelor’s degrees. Overall, wages for occupations in the wholesale trade industry were relatively high, but were commensurate with training — all but one of the jobs requiring a bachelor’s degree were earning median wages well over $25 an hour, while median hourly wages were below $15 for seven of the 21 occupations that needed a high school diploma or less (see Table 2).


Table 2: Top 30 Occupations in Demand in Wholesale Trade, Northwest Minnesota Planning Region

Occupational Title

Median
Hourly Wage
2014

Estimated
Employment
2012

Projected
Employment
2022

Percent
Change
2012-2022

Numeric
Change
2012-2022

Replacement
Hires
2012-2022

Total Hires
2012-2022

Jobs that require a high school diploma or equivalent

Sales Representatives, Wholesale and Manufacturing,
Exc. Technical and Scientific Products

$25.27

1,875

1,915

2.1%

40

360

400

Customer Service Representatives

$14.71

2,043

2,157

5.6%

114

560

670

Sales and Related Workers, All Other

$16.08

713

791

10.9%

78

140

220

Shipping, Receiving, and Traffic Clerks

$15.20

859

857

-0.2%

-2

230

230

Bookkeeping, Accounting, and Audit Clerks

$17.26

4,366

4,594

5.2%

228

400

630

Office Clerks, General

$13.23

5,096

5,152

1.1%

56

1,070

1,130

Light Truck or Delivery Services Drivers

$12.72

1,390

1,429

2.8%

39

220

260

Business Operations Specialists, All Other

$21.18

1,577

1,736

10.1%

159

220

380

Farm Equipment Mechanics and Technicians

$17.77

485

570

17.5%

85

140

220

First-Line Supervisors of Office and Administrative Workers

$20.36

1,470

1,572

6.9%

102

350

450

Executive Secretaries and Administrative Assistants

$20.72

1,318

1,279

-3.0%

-39

160

160

Installation, Maint., and Repair Workers

$19.99

438

435

-0.7%

-3

70

70

Mobile Heavy Equipment Mechanics

$21.75

324

351

8.3%

27

90

120

Driver/Sales Workers

$10.85

873

881

0.9%

8

140

150

Wholesale and Retail Buyers, Exc. Farm Prod.

$21.86

102

113

10.8%

11

20

30

Truck Mechanics and Diesel Engine Specialists

$21.87

652

674

3.4%

22

140

160

Order Clerks

$16.33

317

298

-6.0%

-19

80

80

Jobs that require less than high school diploma

Stock Clerks and Order Fillers

$11.15

2,679

2,618

-2.3%

-61

810

810

Parts Salespersons

$14.83

592

638

7.8%

46

150

200

Industrial Truck and Tractor Operators

$16.48

802

770

-4.0%

-32

180

180

Cashiers

$8.97

6,288

6,239

-0.8%

-49

2,720

2,720

Jobs that require a postsecondary non-degree award

Heavy and Tractor-Trailer Truck Drivers

$17.86

4,666

4,912

5.3%

246

750

1,000

Jobs that require a bachelor’s degree

General and Operations Managers

$33.08

2,761

2,986

8.1%

225

520

740

Sales Managers

$33.19

615

661

7.5%

46

130

180

Sales Representatives, Wholesale and Mfg., Technical and Scientific Products

$26.97

345

399

15.7%

54

70

120

Accountants and Auditors

$28.30

1,409

1,570

11.4%

161

420

580

Software Developers, Systems Software

$35.43

220

258

17.3%

38

30

70

Market Research Analysts and Specialists

$21.98

294

352

19.7%

58

40

100

Chief Executives

$52.49

663

694

4.7%

31

140

170

Financial Managers

$41.90

603

633

5.0%

30

110

140


Still Looking Up

After a period of solid job growth, wholesale trade is projected to continue adding employment in Northwest Minnesota through 2022. With an expected growth rate of 7.7 percent, the industry would outpace the total of all industries in the next decade as well, welcoming more than 850 net new jobs (see Table 3).


Table 3: Northwest Minnesota Wholesale Trade and Related Industries,
Employment Outlook, 2012-2022

NAICS Industry Title

Estimated
Employment
2012

Projected
Employment
2022

Percent
Change,
2012-2022

Numeric
Change,
2012-2022

Total, All industries

254,122

269,121

5.9%

14,999

Wholesale Trade

11,144

12,001

7.7%

857

Manufacturing

27,195

28,176

3.6%

981

Utilities

1,184

1,068

-9.8%

-116

Retail Trade

27,570

29,508

7.0%

1,938

Transportation and Warehousing

5,302

5,443

2.7%

141

Source: DEED Employment Outlook tool


However, wholesale trade is not the only industry expected to grow in the region that employs the occupations highlighted above. For example, both manufacturing and retail trade need similar workers, and are both anticipated to add more new jobs through 2022. Growth in all of these industries may lead to increased competition for job seekers and existing workers with the skills and experience that wholesalers desire.

In addition, as shown in Table 2 there will also be large numbers of replacement openings — jobs that become available as experienced workers leave an occupation or retire from the labor force — for new entrants to fill. These 30 occupations are projected to account for over 10 percent of total job growth in the region, with the fastest growth predicted in the jobs that require bachelor’s degrees.

As the region’s labor market conditions change, workers and job seekers with these skills will be sought after by many industries. Wholesale trade establishments looking to expand may need to market the job growth and high wages that make their industry attractive to work in and to partner with local secondary and postsecondary institutions to develop new interest in their firms, even as they continue to operate behind the scenes.


1Sector 42 — Wholesale Trade. www.census.gov/cgi-bin/sssd/naics/naicsrch

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