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Welcome to the Third Dimension of Minnesota Jobs

by Dave Senf
November 2015

Job data are usually collected, analyzed, and published on either an industry or occupation basis. For example, there are roughly 26,000 accountants and auditors employed in Minnesota as reported by the Occupational Employment Statistics (OES) program. Those accountants and auditors are employed across 250 Minnesota industries with a quarter of them, around 6,200, tracking debits and credits at jobs in the accounting industry which is official known as the Accounting, Tax Preparation, Bookkeeping, and Payroll Services (NAICS 5412) industry.1. The Accounting industry's 6,200 accountants and auditors account for slightly less than 40 percent of the 17,000 employees in the Accounting industry payroll. Accounting industry jobs are tracked by the Current Employment Statistics (CES) and Quarterly Census of Employment and Wages (QCEW) programs.

A third job dimension that doesn't get much attention but is important for a complete picture of work in Minnesota is employment by Class of Worker (COW). COW data, collected by the American Community Survey (ACS) and published annually by the U.S. Census, categorize employment according to the type of organization where employment occurs. COW employment data include self-employed workers unlike OES, CES, and QCEW data and is estimated based on household surveys. Employers are surveyed to gather OES and CES data while QCEW data are compiled from unemployment compensation tax reports submitted by employers to the Department of Employment and Economic Development.

The Census Bureau currently uses eight basic classifications for Class of Worker: private for-profit and private not-for-profit among salaried workers, local government, state government, and federal government for government workers, and self-employed not incorporated, self-employed incorporated, and unpaid family workers for non-salaried workers. Table 1 displays Minnesota and U.S. COW data for 2014. Minnesota has a higher percentage of private sector workers compared to the nation (88.0 versus 86.1 percent) mainly from a sustainably higher percentage of private not-for-profit workers (11.2 versus 8.0 percent). Minnesota has a lower percent of total employment in local, state, and especially federal government employment as well as workers classifying themselves as self-employed in not-incorporated business compared to the U.S.

Table 1: Minnesota and U.S. Class of Worker Employment in 2014
Class of Worker 2014 Employment Percent of Total Employment Minnesota's Share of U.S. Employment
United States Minnesota United States Minnesota
Total 148,019,908 2,864,517 - - 1.94
Private workers 127,514,509 2,521,735 86.1 88.0 1.98
Private wage and salary workers 113,293,416 2,247,566 76.5 78.5 1.98
Private for-profit wage and salary workers 101,410,525 1,925,968 68.5 67.2 1.90
Private not-for-profit wage and salary workers 11,882,891 321,598 8.0 11.2 2.71
Self-employed workers 14,221,093 274,169 9.6 9.6 1.93
Self-employed in own incorporated business workers 5,102,824 112,130 3.4 3.9 2.20
Self-employed in own not incorporated business workers 9,118,269 162,039 6.2 5.7 1.78
Government workers 20,505,399 342,782 13.9 12.0 1.67
Local government workers 10,031,245 179,912 6.8 6.3 1.79
State government workers 6,782,009 122,430 4.6 4.3 1.81
Federal government workers 3,692,145 40,440 2.5 1.4 1.10
Source: 2014 American Community Survey 1-Year Estimates, Table B24080

Table 2 displays Minnesota's ranking among states for various COW combinations. Minnesota's 88 percent private sector employment share is the sixth highest. The remaining 12 percent of the state's employment is in the public sector with 6.3 percent local government employment (counties, cities, and school districts), 4.3 percent state government employment (University of Minnesota, Minnesota State Colleges and Universities, and various Minnesota state government agencies), and 1.4 percent federal government employment, including the U.S. Postal Service. Minnesota's 12 percent public sector share ranks as the sixth lowest, 46th when states are ordered from highest to lowest based on public sector share of employment.

Table 2
Class of Worker State Rankings
Rank State Total Workers
1 California 17,638,152
2 Texas 12,411,323
3 New York 9,354,155
4 Florida 8,738,970
5 Illinois 6,143,429
19 Arizona 2,866,629
20 Minnesota 2,864,517
21 Missouri 2,805,646
47 North Dakota 391,644
48 Alaska 352,531
49 District of Columbia 345,592
50 Vermont 325,211
51 Wyoming 299,225
Rank Private Workers Percent of Workers
- United States 86.1
1 Pennsylvania 89.7
2 Michigan 89.6
3 Indiana 89.3
4 Rhode Island 88.4
5 Nevada 88.2
5 Nevada 88.2
6 Minnesota 88.0
7 Florida 88.0
47 Virginia 79.7
48 New Mexico 78.6
49 Maryland 77.9
50 District of Columbia 76.3
51 Alaska 74.7
Rank Private Non-Profit Workers Percent of Workers
- United States 8.0
1 District of Columbia 19.5
2 Vermont 14.8
3 Massachusetts 12.5
4 Maine 12.0
5 Pennsylvania 11.6
6 South Dakota 11.5
7 Minnesota 11.2
8 Rhode Island 11.1
47 Florida 6.0
48 Georgia 5.9
49 Texas 5.7
50 Mississippi 5.6
51 Nevada 3.8
Rank Self-Employed Workers Percent of Workers
- United States 9.6
1 Montana 15.6
2 Vermont 14.0
3 Maine 13.2
4 South Dakota 12.4
5 Oregon 12.0
24 Arkansas 9.6
25 Minnesota 9.6
26 Tennessee 9.6
47 Ohio 7.7
48 District of Columbia 7.6
49 Delaware 7.5
50 Indiana 7.3
51 West Virginia 6.3
Rank Government Workers Percent of Workers
- United States 13.9
1 Alaska 25.3
2 District of Columbia 23.7
3 Maryland 22.1
4 New Mexico 21.4
5 Virginia 20.3
45 Florida 12.0
46 Minnesota 12.0
47 Nevada 11.8
47 Nevada 11.8
48 Rhode Island 11.6
49 Indiana 10.7
50 Michigan 10.4
51 Pennsylvania 10.3
Rank State and Local Government Workers Percent of Workers
- United States 11.4
1 Alaska 18.0
2 Wyoming 16.8
3 New Mexico 16.0
4 West Virginia 15.3
5 Mississippi 14.5
40 Massachusetts 10.7
41 Minnesota 10.6
42 Colorado 10.5
47 Indiana 9.2
48 Rhode Island 9.2
49 Michigan 9.1
50 Pennsylvania 8.5
51 District of Columbia 7.2
Source: 2014 American Community Survey 1-Year Estimates, Table B24080.

Minnesota's relative low share of public sector jobs is caused in part by having a relatively small federal government workforce. The state has 1.94 percent of all U.S. employment but only 1.10 percent of federal employment. Federal government employment accounts for only 1.4 percent of all jobs in Minnesota, fifth lowest behind Wisconsin, Connecticut, Michigan, and Indiana. States with larger public sector employment tend to have a higher share of federal government jobs. Federal government employment accounts for the highest share of total employment in the District of Columbia, Maryland, Virginia, Hawaii, and Alaska. These states' large federal workforce push them to the top of public sector employment ranking when state and local government jobs are included.

Minnesota's local and state government employment accounted for 10.6 percent of all jobs in 2014, the seventh lowest share. Alaska and Wyoming on the other hand topped all states with 18.0 and 16.8 percent of their workforce employed in local or state government while Pennsylvania and Michigan have the lowest share with 8.5 and 9.1 percent.2.

Minnesota ranks right in the middle when it comes to self-employed jobs. Minnesota has a higher share of workers self-employed in incorporated businesses than nationally but a lower share of workers self-employed in not incorporated businesses. When the two types of self-employed are combined, Minnesota's share of workers who are self-employed is the same as the U.S. share, 9.6 percent.

While nearly 10 percent of all workers in Minnesota are self-employed, more than half of the Agriculture industry workforce is self-employed (53.7 percent). Self-employment is also wide-spread in Construction (28.2 percent), Real Estate and Rental and Leasing (24.7), Other Services (23.0), and Professional, Scientific, and Technical Services (19.4) industries. More than half of the state's self-employed workers work in one of these industries.

When self-employed work is viewed occupationally, more than half of the following groups of Minnesota's self-employed work is in management (24.3 percent of self-employed), sales and related (12.0 percent), construction and extraction (11.1 percent), or personal care services occupations (10.5 percent). 3. Occupational groups with the highest share of self-employed are arts, design, entertainment, sports, and media (27.4 percent), personal care and service (24.7 percent), construction and extraction (24.5 percent), and management (20.7). The largest detailed occupations in each of these occupational groups are writers and authors, childcare workers, carpenters, and farmers, ranchers, and other agricultural managers, respectively.

Table 3 summarizes self-employed occupational numbers in Minnesota showing in the first column the share of employment that self-employed accounts for in each occupational group and in the second column what percent of all self-employment is accounted for across occupational groups. Other COW categories can be examined across industry and occupation as self-employed is in Table 3 to gain insight into the workings of Minnesota's job market.

Table 3: Occupational Self-Employed in Minnesota
Occupation Percent of Occupational Group that is Self-employed Percent of All Self-employed by Occupational Group
Total Employment 9.6 -
Management 20.7 24.3
Business and Financial Operations 8.1 4.7
Computer and Mathematical 4.5 1.6
Architecture and Engineering 3.3 0.7
Life, Physical, and Social Science 6.1 0.6
Community and Social Services 3.3 0.7
Legal 17.6 1.8
Education, Training, and Library 3.0 1.8
Arts, Design, Entertainment, Sports, and Media 27.4 5.9
Healthcare Practitioners and Technical 4.3 2.8
Healthcare Support 2.8 0.6
Protective Service 0.2 0.0
Food Preparation and Serving Related 1.9 1.1
Building and Grounds Cleaning and Maintenance 11.9 4.0
Personal Care and Service 24.7 10.5
Sales and Related 11.6 12.0
Office and Administrative Support 2.9 3.8
Farming, Fishing, and Forestry 14.1 1.2
Construction and Extraction 24.5 11.1
Installation, Maintenance, and Repair 11.2 3.1
Production 3.9 2.8
Transportation and Material Moving 7.9 4.8
Source: 2014 American Community Survey 1-Year Estimates, Table B24060

The percent of workers in private not-for-profit jobs is higher in Minnesota than in most states, with Minnesota having the seventh highest percent of private non-profit workers (see Table 2). Minnesota private not-for-profit workers totaled 322,000 in 2014 or 11.2 percent of the workforce. If Minnesota had the same private not-for-profit worker share as the U.S., 8.0 percent, there would have been 92,000 fewer private not-for-profit jobs in Minnesota last year.

One in five healthcare practitioners and technical workers is employed by a private not-for-profit employer in Minnesota. If you are looking for work in a community and social services occupation such as social and human service assistant or mental health counselor, then your best opportunities will be at private not-for-profit organizations since 51 percent of community and social service jobs are at private not-for-profit organizations. If you are a government employee then the odds are high that you hold an education, training, or library job since almost one-third of all public sector jobs are in education, training, and library occupations. If you're interested in working for a private for-profit company then your best bet is to get into a production occupation such as a tool and die maker or a numerical tool and process control programmer as 90 percent of production jobs are at private for-profit companies.

While Minnesota's ratio between private and public workers has changed little over the last decade, the percent of public workers bumped up slightly during the Great Recession. As shown is Figure 1, the private for-profit workforce took the brunt of the job decline 2008 through 2010 but has bounced back since. Government employment dropped only slightly in 2009 before returning to its pre-recession level. Minnesota's government workforce was 11.9 percent of all workers in 2007, climbed to 12.6 percent in 2010, and has fallen back to 12.0 percent in 2014 as private sector job growth has outpaced public sector job growth since the Great Recession.

Figure 1: COW Employment, 2005-2014

The number of Minnesotans employed, as estimated by the American Community Survey, has grown 7.6 percent between 2005 and 2014 with growth uneven across COWs. Private not-for-profit employment increased the fastest, 26 percent while self-employed not incorporated declined 16 percent. Private for-profit employment increased 7.7 percent, self-employed incorporated increased 10.9 percent, and government employment increased 5.9 percent.

Private not-for-profit employment growth occurred mainly in the health care and social assistance and educational services industries. Payroll expansion at non-profit health maintenance organizations (HMO) and hospitals and at Minnesota's non-profit private colleges accounted for most of the workforce expansion.

Self-employed in incorporated businesses has seen little change over the last decade while self-employed in unincorporated businesses has been gradually slipping. Neither self-employed worker group experienced a noticeable gain or loss during or after the Great Recession. The data challenge media stories claiming significant upticks in self-employment in response to surging unemployment during the recession. Self-employed work in unincorporated business has declined the most in Construction, Retail Trade, Agriculture, Real Estate, and Administrative and Support industries.

The share of Minnesota workers involved in self-employment work, when incorporated and unincorporated self-employed jobs are combined, has slipped to 9.6 percent in 2014 from 11.1 percent in 2005. The shrinking self-employed share contradicts another ever-changing popular media story, that of a booming freelance4. economy. Most freelance or gig economy workers are self-employed which means self-employed numbers should be increasing if the gig economy is racing ahead of the rest of the economy.

Analyzing employment through the Class of Worker dimension in addition to industry and occupation dimensions of work provides a comprehensive picture of Minnesota's job market that is useful in understanding how work in Minnesota is continuously changing.

1. OES data are used to create industry staffing patterns showing the distribution of occupational employment in an industry. The level of detail is 270 industries and 800 occupations. Because of confidentiality rules the 270 industries are aggregated to 30 industries, see for the staffing pattern of the 30 industries.

2. Some of the high local employment share in states like Alaska and New Mexico may be from high Native American tribal employment which is included in local government employment.

3. One of Minnesota's largest self-employed occupation is farmers, ranchers, and other agricultural managers which is included in the management occupational group.

4. Also called the gig economy, as in "we've got a gig on Thursday, Man."

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