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Public Sector Employment in Southwest Minnesota

I'm from the Government, and I'm here to help - Public Sector Employment in Southwest Minnesota

by Cameron Macht and Brent Pearson

April 2013

From Education to Health Care to Public Safety, the government provides a wide range of services - and jobs - to residents in Southwest Minnesota. Through the first three quarters of 2012, there were 1,280 government establishments providing 30,567 covered jobs in the 23-county Southwest Minnesota planning region.

According to data from DEED's Quarterly Census of Employment and Wages (QCEW) program, public sector employment accounts for approximately 18 percent of total employment in the region, with the private sector supplying the other 82 percent of jobs. That is higher than in the state of Minnesota as a whole, where less than 14 percent of jobs are in the public sector (see Table 1).

Table 1
Industry Employment Statistics, Q1-Q3 2012
Ownership Level Region 6W Region 8 Region 9 Southwest Region Minnesota
# of Firms # of Firms # of Firms # of Firms # of Firms # of Firms # of Firms # of Firms # of Firms # of Firms
Total, All Ownerships 1,611 17,894 4,054 53,383 6,677 101,030 12,342 172,307 168,853 2,631,519
Total Government 212 4,955 459 10,041 609 15,571 1,280 30,567 8,324 363,904
Federal Government 60 237 123 523 130 959 313 1,719 1,822 31,598
State Government 39 154 99 1,256 132 3,591 270 5,001 2,079 74,473
Local Government 113 4,563 237 8,261 346 11,020 696 23,844 4,422 257,832
Private Sector 1,399 12,939 3,596 43,342 6,069 85,459 11,064 141,740 160,529 2,267,615
Source: DEED Quarterly Census of Employment and Wages (QCEW) program

Instead, government locations are more dispersed in Southwest Minnesota to provide services to residents spread across the region. Government establishments accounted for just over 10 percent of firms in Southwest Minnesota, almost double the number in the state. While there are more locations, they are smaller offices. In Southwest Minnesota these government establishments average 24 employees per site, compared to 44 employees per site in the state.

Region 6W, which includes Big Stone, Chippewa, Lac qui Parle, Swift, and Yellow Medicine Counties, had the highest percentage of government employment with more than one-fourth of total jobs in the public sector. Approximately 13 percent of firms and 27.7 percent of jobs were government. About 19 percent of the jobs in the nine counties in Region 8- Cottonwood, Jackson, Lincoln, Lyon, Murray, Nobles, Pipestone, Redwood, and Rock - were public sector, accounting for about one in every five jobs. The largest number of businesses and jobs were located in Region 9 - which encompasses Blue Earth, Brown, Faribault, Le Sueur, Martin, Nicollet, Sibley, Waseca, and Watonwan counties, as well as the Mankato-North Mankato Metropolitan Statistical Area - but it had the lowest concentration of government employment at 15.4 percent.

Government Ownership: Keeping it Local

When reported to the QCEW program, government ownership falls into three levels: federal, state, and local. In Minnesota just over 70 percent of government employment is local, about 20 percent is state, and about 10 percent is federal. In comparison, only 5.5 percent of Southwest Minnesota's government jobs were federal and only 16.5 percent were state. The remaining 78 percent of government employment in the region was local.

Almost three-fourths of government employment is concentrated in two industries: Educational Services and Public Administration. Through the first three quarters of 2012 Educational Services provided 13,049 jobs at 183 government-run institutions, primarily elementary and secondary schools, but also colleges and universities. Public Administration - which includes executive, legislative, and general government; justice, public order, and safety activities, and administration of human resources, environmental quality, economic, and housing, urban planning, and community development programs - provided an average of 9,457 jobs at 736 government agencies (see Table 2).

Table 2
Table 2. Government Employment in Southwest Minnesota, Q1-Q3 2012
Number of Firms Number of Jobs Q1-Q3 2012 Total Payroll Average Annual Wages
Total, All Government 1,279 30,568 $851,076,479 $37,123
Educational Services 183 13,049 $365,571,071 $37,354
Health Care and Social Assistance 39 4,654 $138,633,759 $39,715
Arts, Entertainment, and Recreation 14 432 $8,236,576 $25,441
Accommodation and Food Services 4 733 $13,171,049 $23,947
Public Administration 736 9,457 $252,202,749 $35,557
Source: DEED Quarterly Census of Employment and Wages (QCEW) program

The third largest public sector industry is Health Care and Social Assistance, which averaged 4,654 jobs at 39 government establishments. That included 3,671 jobs at city, county, or state-owned hospitals, which was nearly half (44.2%) of total employment at hospitals in the region (8,305 total jobs). Southwest Minnesota also had a small, but notable, amount of government employment in the arts, entertainment, and recreation and in the accommodation and food services industries, primarily at the region's tribal casino resorts.

Shrinking Big Government

Contrary to popular opinion, government has consistently comprised a smaller percentage of total employment over the last decade. While the private sector gained almost 3,600 net new jobs from 2002 to 2008, the government sector added just 210 net new jobs. The overall economy grew 2.2 percent, while government employment increased just 0.7 percent. Instead, government employment in the region hovered between a low of 31,368 jobs in 2004 and a high of 31,735 jobs in 2008 (see Figure 1).

Figure 1: SE Minnesota Employment Trends

Since then, government employment has declined each year, dropping more than 1,100 jobs in the last four years. While total employment fell about 3 percent from the peak in 2008 to the recovery in 2012, government employment is still down almost 4 percent. Private sector employment bottomed out in 2010 and has seen slow but steady net job gains in the last two years. Government employment saw a smaller drop from 2008 to 2010, but has been sliced in response to tight budgets the last two years.

Those cuts were not uniform across all regions. Region 8 and Region 9 both lost government employment during the first year of the recession, stabilized in 2009 and 2010, then sank further in 2011 and 2012, with Region 8 suffering the biggest losses each year. In contrast, Region 6W actually added government jobs in the last two years, with steady gains in local government.

By the People, For the People

Even though government employment has been shrinking since the recession, some occupations are still in demand and offer competitive wages across the region. Based on DEED's Occupations in Demand (OID) data tool, jobs with a high concentration of government employment (at least 70 percent of total jobs) range in demand from low (one star) to high (five stars), depending on current job vacancies, unemployment insurance claims, and regional employment (see Table 3).

Table 3
Table 3. Southwest Minnesota Government Occupations in Demand, 2012
Occupation Demand (1-5 Stars) Median Annual Salary Education
6W 8 9 6W 8 9
Social and Human Service Assistants **** ***** ***** $23,703 $24,716 $35,449 High School or Equivalent
Teacher Assistants ***** **** *** $22,897 $25,227 $24,235 High School or Equivalent
First-line Managers of Correctional Officers ** ** $67,227 $52,193 n/a High School or Equivalent
First-line Managers of Police and Detectives ** ** ** $57,856 $66,655 $69,214 High School or Equivalent
Correctional Officers and Jailers * **** ***** $40,458 $34,527 $44,993 High School or Equivalent
Detectives and Criminal Investigators * ** n/a $67,492 $58,421 High School or Equivalent
Police and Sheriff's Patrol Officers ***** ***** **** $37,194 $44,143 $49,941 High School or Equivalent
Gaming Surveillance Officers ** ** $29,874 $29,874 n/a High School or Equivalent
Court, Municipal, and License Clerks ** ** ** $48,227 $45,617 $41,357 High School or Equivalent
Highway Maintenance Workers * * * $40,006 $39,148 $42,538 High School or Equivalent
Water and Wastewater Treatment Plant and Systems Operators *** * ** $38,754 $45,762 $47,855 High School or Equivalent
Police, Fire, Ambulance Dispatchers ** ** ** $44,291 $39,585 $40,549 High School or Equivalent
Library Technicians * * * $29,654 $28,739 $36,077 Postsecondary, Non-Degree
Firefighters * * * $29,101 $27,675 $28,442 Postsecondary, Non-Degree
Civil Engineering Technicians **** ***** **** $57,757 $55,309 $54,667 Associate's Degree
Eligibility Interviewers, Government Programs ** ** ** $46,121 $41,522 $38,496 Associate's Degree
Tax Examiners and Collectors **** **** **** n/a $52,984 n/a Bachelor's Degree
Zoologists and Wildlife Biologists * n/a $54,804 n/a Bachelor's Degree
Conservation Scientists *** *** ** $66,465 $74,979 $56,918 Bachelor's Degree
Environmental Scientists *** *** $59,178 $58,629 Bachelor's Degree
Child, Family, and School Social Workers **** ***** ***** $44,627 $46,338 $49,616 Bachelor's Degree
Probation Officers and Correctional Treatment Specialists *** *** $65,287 $65,287 n/a Bachelor's Degree
Kindergarten Teachers * * * $47,803 $50,543 $44,343 Bachelor's Degree
Elementary School Teachers ***** ***** * $50,651 $46,983 $50,290 Bachelor's Degree
Middle School Teachers ** ** * $50,707 $43,890 $47,323 Bachelor's Degree
Secondary School Teachers * ** * $50,792 $51,460 $49,739 Bachelor's Degree
Special Education Teachers ** ** ** $48,730 $50,196 $49,096 Bachelor's Degree
Education Administrators ** ** ** $82,541 $80,878 $88,367 Master's Degree
Postsecondary Vocational . Education Teachers **** ** n/a $52,638 $64,878 Master's Degree
Librarians * * * $50,786 $53,798 $44,589 Master's Degree

Source: Minnesota Department of Employment and Economic Development Occupations in Demand (OID) tool

n/a = Salary data not available

Not surprisingly, many of the occupations that were in the highest demand were in the Educational and Health Services and the Justice, Public Order, and Safety sectors. For example, social and human service assistants were in high demand in all three regions, although wages were relatively low. Likewise, police and sheriff's patrol officers, civil engineering technicians, tax examiners, and social workers were also in high demand across the region, but offered much higher wages.

Most of those occupations require postsecondary education or training, leading to higher salaries and lower unemployment rates. Of the top 30 government occupations, just 12 required a high school education or equivalency, while the other 18 required postsecondary education, including 14 that required a bachelor's degree or higher.

Educational Services

According to DEED's Quarterly Workforce Indicators program, less than 5 percent of jobs in the public sector are held by workers with less than a high school diploma, which is half the amount in the private sector (9.9%). In contrast, more than one-third of workers in the public sector had a bachelor's degree or higher (33.9%), compared to just one-fifth of workers in the private sector. In sum, almost 70 percent of jobs in the public sector were held by workers with some college, an associate degree, a bachelor's degree, or higher (see Figure 2).

Figure 2: SW Minnesota Workforce Demographics

The public sector workforce also has more older workers and fewer younger workers. In 2012 just over half (50.1%) of the public sector workforce in the region was 45 to 64 years of age, compared to 37 percent in the private sector. Almost 24 percent of public sector workers were 55 to 64 years of age, meaning one-fourth of the workforce is within 10 years of retirement age, although not all will retire, as demonstrated by the 6 percent of the government workforce that is already 65 years and older.

In contrast, only one-fourth of public sector workers are in the early stages of their careers, with 17.5 percent aged 25 to 34 years and less than 7 percent under 24 years of age. In comparison, almost 40 percent of private sector workers are in the youngest age groups, including 19 percent that are 14 to 24 years of age (see Table 4).

Southwest Minnesota Planning Region Total, All Ownerships
Table 4
Table 4. Southwest Minnesota Workforce Demographics, 2012
Percent Private Sector Percent Public Sector Percent
Total Workforce 181,814 100% 151,506 100% 30,308 100%
14-24 years 31,348 17.2% 29,278 19.3% 2,070 6.8%
25-34 years 37,893 20.8% 32,600 21.5% 5,293 17.5%
35-44 years 31,903 17.5% 25,926 17.1% 5,977 19.7%
45-54 years 40,473 22.3% 32,499 21.5% 7,974 26.3%
55-64 years 30,781 16.9% 23,574 15.6% 7,207 23.8%
65 years and over 9,412 5.2% 7,622 5.0% 1,790 5.9%
Male 86,794 47.7% 75,923 50.1% 10,871 35.9%
Female 95,018 52.3% 75,582 49.9% 19,436 64.1%
Source: DEED LEHD Quarterly Workforce Indicators (QWI) program

Long-Term Belt-Tightening

Still struggling with the impact of the Great Recession, Southwest Minnesota government is expected to lose about 550 jobs from 2010 to 2020 according to DEED's Employment Outlook tool. That includes declines in both federal and local government but a small increase in state government.

While local elementary and secondary schools will likely continue to cut back on staff, jobs in state colleges and universities in the region are expected to increase slightly. State and local hospitals are also expected to see measured job gains - about 3.5 to 5 percent - in the region, but pale in comparison to the almost 20 percent expansion expected at privately-owned hospitals.

In some instances the lower availability of government services conflicts with the higher value placed on them. For example, fires still need to be fought, yet communities have fewer dollars to pay firefighters after cuts to local government aid, less money in reserves, and lower tax bases. Instead, tight government budgets may compel volunteers to fill roles previously held by government-paid employees. As the data above shows there aren't many job openings for paid firefighters in the region, but many communities run volunteer fire departments.

The data show that government jobs are decreasing in the post-recessionary economy, and they aren't expected to grow in the long term either. But even with government employment shrinking, a need for services is still in place, and the remaining workforce must continue to do more with less. All levels of government will need to adapt and find new ways to provide much needed services and jobs to Southwest Minnesota.

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