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They came. They saw. They stayed.

by Brent Pearson
July 2013

Commuting the Corridor

The commuter corridor from the Twin Cities to Rochester is the pipeline for a shared workforce between the two communities. Commute times from the Twin Cities to Rochester and vice versa range from approximately one hour in parts of the southern metro to approximately one and a half hours to and from downtown Saint Paul or Minneapolis. In recent years this commute has been streamlined by commuter bus lines transporting workers from various stops in the Twin Cities to Rochester, particularly downtown and into the Mayo Clinic Campus. The U.S. Highway 52 corridor runs approximately 90 miles from the Twin Cities to I-90 near Rochester and serves as many as 74,000 vehicles daily, based on 2009 MnDOT estimates.1 This corridor also connects commuters to U.S. Highways 14, 61, and 63 and cities located along the corridor between the two metropolitan areas - cities such as Cannon Falls, Zumbrota, and Pine Island.

This article uses the U.S. Census Bureau's OnTheMap labor market analysis data tool. This tool uses 2011 American Community Survey (ACS) data as a baseline. While more recent data to assess regional labor markets exists, OnTheMap is an incredibly useful tool for analyzing commuter and labor shed patterns. Effectively using OnTheMap allows us to gain a better understanding of where some of Rochester's residents are commuting to and where Rochester is drawing workers from.

Commute and Labor Sheds

Using the OnTheMap tool, a labor shed counts jobs by places where workers live. Typically, labor sheds in southeast Minnesota expand into Rochester and the Twin Cities, as well as communities surrounding the given area. According to the ACS estimates, approximately 46.4 percent of Rochester workers actually live within the city limits (Table 1). This means that 53.6 percent of Rochester workers are commuting from outside the city. This should not be confused with Rochester's commute shed (Table 2). The commute shed estimates the percentage of Rochester residents commuting out of Rochester for work.

Table 1
Rochester Labor Shed: Primary Jobs Counts by Places Where Workers Live
City 2011
Count Share
Rochester, MN 39,129 46.4%
Stewartville, MN 1,747 2.1%
Byron, MN 1,716 2.0%
Kasson, MN 1,453 1.7%
Minneapolis, MN 1,274 1.5%
Saint Paul, MN 1,268 1.5%
Pine Island, MN 756 0.9%
St. Charles, MN 683 0.8%
Austin, MN 641 0.8%
Plainview, MN 593 0.7%
Source: U.S. Census Bureau Local Employment Dynamics OnTheMap
Table 2
Rochester Commute Shed: Primary Jobs Counts by Places Where Workers are Employed
City 2011
Count Share
Rochester, MN 39,129 76.10%
Saint Paul, MN 618 1.20%
Minneapolis, MN 532 1.00%
Winona, MN 441 0.90%
Bloomington, MN 401 0.80%
Dodge Center, MN 367 0.70%
Stewartville, MN 344 0.70%
Edina, MN 341 0.70%
Austin, MN 306 0.60%
Plymouth, MN 304 0.60%
Source: U.S. Census Bureau Local Employment Dynamics OnTheMap

Essentially the labor shed tells us that in 2011, based on ACS estimates, less than half of workers in Rochester were Rochester residents. Typically, larger cities draw residents from surrounding areas for higher paying wages and more jobs within more industries from which to choose. Additionally, workers in larger cities often live outside of the city limits for many reasons ranging from more affordable housing and more space to less traffic congestion and an overall lower cost of living. But that two major metropolitan areas are swapping workers in such large numbers from many miles away makes the Rochester-Twin Cities connection unique for Minnesota. While nearby cities of Stewartville, Byron, and Kasson are the top choice communities of Rochester workers who do not live in Rochester, Minneapolis and St. Paul are a close second - aided by the U.S. 52 corridor, greater transportation options, and the wealth of health care jobs located in Rochester.

While Rochester pulls approximately 2,542 workers from the cities of Minneapolis and St. Paul, overall it draws 11,935 workers (approximately 14.1 percent of all workers in the Rochester MSA) from the Minneapolis-St. Paul-Bloomington, MN-WI Metropolitan Statistical Area (MSA) as a whole. By contrast, Rochester exports approximately 4,952 workers to the Minneapolis-St. Paul, MN-WI MSA. Collectively, this mutual exchange of workers encompasses more than 16,000 workers commuting between the two metropolitan areas.2

But, as valuable as it is to know where Rochester is pulling workers from, it is equally as valuable to know how many residents the city of Rochester is retaining for work. Approximately 76.1 percent of Rochester's workforce is homegrown Rochester talent (Table 2). Essentially, Rochester draws in more than twice as many workers as it exports to the Twin Cities and surrounding areas, and it retains the talent it has, too. Clearly health care occupations are a key draw for workers and the top strength of the Rochester workforce. But if we take health care out of the equation, how do these two markets stack up?

Mirror Labor Economies, Except...

Wouldn't it seem logical to assume that all things being equal, the outlier tips the scales? Well, when the outlier is nearly 47 percent of a city's total workforce, probably. A comparison of major sector employment between Rochester and the seven-county Twin Cities Economic Development Region (EDR), based on 2012 annual employment averages using the Quarterly Census of Employment and Wages (QCEW), shows similar labor market economies. While the top five industries, based on percentage of employment, are the same, with only minor difference in rankings, the key difference is that Rochester has more than three times the concentration of health care and social assistance than the seven-county Twin Cities EDR (Table 3).

Table 3
2012 Annual Employment
Industry Rochester Industry 7-County Twin Cities
2012 Annual Employment Percentage of 2012 Annual Employment 2012 Annual Employment Percentage of 2012 Annual Employment
Health Care and Social Assistance 39,910 46.9% Health Care and Social Assistance 227,624 14.3%
Retail Trade 9,389 11.0% Manufacturing 162,161 10.2%
Manufacturing 6,761 7.9% Retail Trade 155,651 9.8%
Accommodation and Food Services 6,638 7.8% Educational Services 126,261 7.9%
Educational Services 3,852 4.5% Accommodation and Food Services 125,489 7.9%
Public Administration 2,759 3.2% Finance and Insurance 105,156 6.6%
Administrative and Support and Waste Management and Remediation Services 2,318 2.7% Professional, Scientific, and Technical Services 101,405 6.4%
Construction 2,067 2.4% Administrative and Support and Waste Management and Remediation Services 97,749 6.2%
Other Services (except Public Administration) 2,018 2.4% Management of Companies and Enterprises 66,368 4.2%
Transportation and Warehousing 1,672 2.0% Public Administration 65,583 4.1%
Professional, Scientific, and Technical Services 1,473 1.7% Transportation and Warehousing 60,723 3.8%
Finance and Insurance 1,223 1.4% Other Services (except Public Administration) 53,882 3.4%
Arts, Entertainment, and Recreation 813 1.0% Construction 53,110 3.3%
Management of Companies and Enterprises 650 0.8% Real Estate and Rental and Leasing 30,563 1.9%
Real Estate and Rental and Leasing 641 0.8% Arts, Entertainment, and Recreation 29,403 1.9%
Source: Minnesota Department of Employment and Economic Development Quarterly Census of Employment and Wages

This is no secret as Rochester is one of the global leaders in health care. But perhaps Rochester's competitive advantage represents a key component of the Rochester commute and labor sheds. While many Twin Cities workers commute to and from Rochester daily to work for Mayo, a comparison of salaries of key health care occupations might explain why.

The difference is remarkable (Chart 1). Very few other places in the state offer wages that rank above the Twin Cities so consistently across an entire industry. For workers commuting into Rochester from the Twin Cities, health care occupations represent the greatest potential for higher wages. Based on salary survey data produced by DEED, hourly wages for both technical and support occupations in health care were almost exclusively higher in the Rochester MSA than the Minneapolis-Saint Paul, MN-WI MSA during the second quarter of 2012. The few exceptions were massage therapists, dental hygienists, and veterinarians.

Chart 1

It is important to note that health care is a very split industry. On one hand, there is a very technical side in which surgeons and practitioners exceed median wages of $80.00 per hour. On the other hand, health care support occupations, such as dental and nurse assistants, sometimes earn a mere fraction of that amount. While certifications and licenses matter, the chasm is vast enough to make the distinction: Health care support workers often earn less than $20.00 an hour. While data on which industries workers are commuting to and from and more specifically which occupations offer the greater draw is not available, it is hardly an intuitive leap to declare that health care occupations - especially health care technical occupations - are at least a key component in the commute and labor shed data.

Clearly the Twin Cities and Rochester workforce are swapping residents. But what about our neighbors to the south and east? Might interstate poaching be significant as well?

Being More Neighborly

The Twin Cities and Rochester inter-connected commute and labor sheds are significant primarily because of the distance between the two. The two regions share one other aspect of their sheds - they pull from other states as well. While 97.5 percent of all workers who work in Rochester live in Minnesota, some live in Wisconsin (1,353 workers, 1.6 percent) and Iowa (448, 0.5 percent). On the other hand, 98 percent of workers who live in Rochester work in Minnesota. There were 377 commuters who live in Rochester and commute to Wisconsin, and 258 commuters who live in Rochester and commute to Iowa for work in 2011. Those numbers pale in comparison to the Twin Cities-Rochester corridor.

The Three Pillars: Health Care, Sharing, and Transport

While cities and communities often compete for skilled workers, much in the same way businesses do, sometimes one industry is simply too strong to compete with. The Twin Cities has many industry and workforce strengths, and health care is one of them. But Rochester is a global destination for health care patients. Rochester both retains its own workers and pulls workers in significant numbers from other regions.

2U.S. Census Bureau Local Employment Dynamics OnTheMap mapping tool.

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