A strong 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.
In January 2022, Minnesota’s job vacancy rate peaked at 8.3 percent. Although the job vacancy rate had decreased to 5.7 percent by March 2023, it still remains higher than any previous pre-pandemic rate. 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. These trends amounted to five job openings for every one unemployed worker in July of 2022, 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.