Workforce Shortage

Workforce is vital to Minnesota’s continued economic prosperity. One of the markers of economic health is the job vacancy rate which measures the demand for workers in the state. A higher job vacancy rate indicates a higher need for workers. When we examine the trends in recent years, we find that across industries employers are seeking workers at an unprecedented intensity.

At the same time as employers are reporting a high demand for workers, Minnesota saw historically low unemployment rates. In 2022, Minnesota’s unemployment rate fell to an average of 2.7 percent—a historic low for the state and one of the lowest in the country. Since mid-2024 there has been a slight increase, but Minnesota remains below the country average. However, labor force participation has decreased among white Minnesotans, while increasing among Black, Hispanic, and Asian Minnesotans. This is due in large part to an older white population.¹ Overall labor force trends amounted to two job openings for every one unemployed worker in October of 2024, suggesting that there are not enough workers to fill open positions. In addition, the labor force participation rate has been slowly declining since 2001 and demographic shifts such as an aging population, accelerated retirements, and declining immigration may also contribute to the high job vacancy rate.

Minnesota’s economy is expected to grow over the next decade and will need a larger and better aligned workforce to fully support its advancement and benefit Minnesotans. This is especially true for the Drive for Five sectors—Business & Technology, Health Care & Social Assistance, Manufacturing, Trades & Construction, and Educational Services—which were identified in 2021 as critical industries to focus on based on their family-sustaining wages, size, and job vacancy projections, as well as the priorities of the Walz-Flanagan administration.

Goal: Minnesota has a diverse and skilled workforce that meets the needs of our advancing economy.

Measurable goal for 2027: Achieve a balanced and sustainable job vacancy rate of 4.4 percent overall and in the Drive for Five sectors.

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Source: Overall Job Vacancy Rate—US Bureau of Labor Statistics (BLS) Job Openings and Labor Turnover Survey (JOLTS); Job Vacancy Rate for the Drive for Five Sectors—Minnesota Department of Employment and Economic Development (DEED) Job Vacancy Survey (JVS).

Technical notes: The BLS JOLTS program produces monthly state-level estimates of the total nonfarm job openings (i.e., job vacancies). Note that these data are not disaggregated by industry. For more information on the JOLTS data and methodology, see the JOLTS website. The DEED JVS program is a Minnesota-specific survey of job vacancies administered twice a year; it does allow for disaggregation by industry. For more information on the DEED JVS data and methodology, see the DEED JVS website. While these two datasets use slightly different definitions and formulas for calculating the job vacancy rate, they do have a high degree of correlation. The 4.4 percent target is based on the overall job vacancy rate's pre-pandemic five-year average (March 2015 to February 2020).