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A Closer Look at Area's Wage Growth

northwest-minnesota-mapApril 16, 2015 - Last month's Local Look post showed that average hourly earnings increased faster than inflation in Northeast Minnesota, resulting in real wage growth. Despite recent headlines of major companies in low-paying industries (such as Retail Trade and Accommodation and Food Services) increasing wages, the rise in average earnings per hour for private employees in Northeast Minnesota has more to do with job gains in high-paying industries. This month, we used DEED's Quarterly Census of Employment and Wages data tool to analyze wages for the industries that have added jobs in the region since the recession.

Table 1 shows the industries that gained the largest number of jobs in Northeast Minnesota from the 3rd quarter of 2009 to the 3rd quarter of 2014. Since 2009, when the effects of the recession were the greatest, the region has added 6,032 new jobs in the total of all industries. The region's highest-paying industry - Mining - saw the greatest increase in jobs during this time frame and accounted for more than a third of the region's net new jobs with more than 2,050 added. The Construction, Educational Services, Accommodation and Food Services, and Professional, Scientific, and Technical Services industries also had considerable growth over this five-year period. The Health Care and Social Assistance industry had more modest growth, but it is important to note that the industry has gained more than 1,000 jobs total since the 3rd quarter of 2008.

NE MN employment statistics, 3rd quarter 2009 - 2014

Table 2, which shows the average weekly wages associated with the different industries, demonstrates that mining's average weekly wage of $1,727 is more than double the average weekly wage for all industries in Northeast Minnesota. Other high paying industries that have also gained jobs since the recession include those mentioned above. The Professional, Scientific, and Technical Services industry is right behind Mining with an average weekly wage of $1,104. It is followed by Construction ($1,074), Health Care and Social Assistance ($912), and Education Services ($865).

NE MN employment statistics, 3rd quarter 2014

Of course, Northeast Minnesota also saw job growth in lower-paying industries such as Accommodation and Food Services, which had an average weekly wage of $286, but the impact was dwarfed by the gains in high-paying industries. As we've seen through job gains and average weekly wages, Mining was the clear driver of wage growth in the region during the recovery.

Unfortunately, recent events will impact the future of the mining industry and the regional economy, so we will continue to monitor effects here at the Local Look.

For More Information

Contact Erik White at 218-302-8413.

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