Northland Navigates Sharp Ups and Downs of Pandemic Economy

The Northspan Group and NORTHFORCE (NF) have compiled data that gives insights into the area job market as the Northland continues to navigate the sharp economic ups and downs caused by COVID-19. 

This pandemic has presented a perfect storm for the ten northernmost counties of Minnesota and Wisconsin (the area covered by NF). Regional economic data through the Northspan Group’s Northland Connection Program, combined with workforce data through the northforce.org online talent portal, indicates that the area’s unique mix of industries has been especially hard-hit. Moreover, the road back to healthy employment rates and wage stabilization is likely to be long.

Data from Northland Connection and NF reveals the following key takeaways:

  • In the first four months of the pandemic, unemployment rates ran well under national trends in all ten of the counties served by NF. Compared to the rest of Minnesota, however, unemployment ran higher than the state average. In August and September, the Northland began to converge with the rest of the state, and is now closer to the state average than it was before the pandemic. The unemployment rate in Cook County, which had been the highest in Minnesota in the early days of the pandemic, is now back to being one of the lowest in the state.
  • On NF, job postings dropped by 25% from March to May 2020. Job numbers began to stabilize in June, growing 7% from the average of the previous three months. From June to July, new NF openings more than doubled, going from 116 to 234, a number well over pre-pandemic averages around 160. Since that early summer rush, openings have stabled around 126 per month, showing a slight slowdown in hiring activity but a considerable uptick from the early months of the pandemic.
  • Wages, meanwhile, have stagnated. Telecommute-friendly fields such as business, financial services, and civil service, have remained stable. A tight construction labor market shows continued wage increases, as does healthcare despite well-publicized layoffs, probably reflecting hazard pay. No sector shows a dramatic drop in average wages, although several (including manufacturing and marketing) have ticked downward.
  • Job postings by category reflect the wage pressure in certain industries. Healthcare and construction show the greatest need by significant margins, which reflects both the need for more healthcare workers amid the pandemic and ongoing construction projects. Other high demand fields, such as education and sales, reflect industries that have undergone significant disruption due to the pandemic, but are now finding ways to adjust to the new reality.

A large proportion of the Northland’s economic base is dependent on person-to-person contact or the whims of national demand. Newer and growing sectors including aviation, tourism, healthcare, and education are particularly vulnerable to this pandemic, along with longstanding regional staples such as the timber products industry and mining

According to Minnesota’s Department of Employment and Economic Development, the largest number of unemployment insurance claims in Northeast Minnesota in the early months of the pandemic came from three sectors: food service and preparation; construction and extraction; and sales. All three have made strides in hiring, with job growth of over 9% over the summer months. How these fields will continue to fare, however, remains to be seen.

The Census Bureau reports comparable levels of nationwide construction spending between 2019 and 2020. This continued demand is a promising sign for mining and regional mines that provide raw materials. A resurgence in tourism, while risking virus spread, has also led to a spike in the number of leisure and hospitality job posts.

Considerable efforts to diversify the Northland’s economy over the past several decades have clearly helped the area endure the pandemic better than many parts of the country. But compared to major metropolitan areas, as well as growing Midwestern and Western regional centers that have genuinely diverse economies, Northland economic growth still has far to go. 

Recovery will hinge on growing industries that are amenable to remote work, together with sectors such as healthcare and supply chains that are most vital to supporting a stable, healthy society. 

For more information please contact Karl Schuettler, Research Director & Consultant with the Northspan Group, Inc., at kschuettler@northspan.org.

NORTHFORCE connects career-minded individuals with professional opportunities in the Northland and is powered by Northspan. NORTHFORCE is funded in part by the Business Leaders Fund of the Duluth Superior Area Community Foundation and by the following partners: Department of Iron Range Resources & Rehabilitation; Duluth Economic Development Authority (DEDA); Duluth Seaway Port Authority; Northeast Minnesota Workforce Development Board; Minnesota Power; APEX; PolyMet; and JCC Services. Learn more at northforce.org 

The Northspan Group, Inc. specializes in creative thinking, enterprising strategies, and systematic approaches to help businesses, communities, regions, and organizations prosper in a global economy, working cooperatively with economic and community development partners to leverage resources for measurable, sustainable results. Learn more at northspan.org. 

Northland Connection is the premiere commercial real estate and economic development research program in the eight-county Northland region of Northeast Minnesota and Northwest Wisconsin. It provides economic development data and analysis to recruit, expand, and retain businesses across the region. It powers responsive data services with a human touch and hosts the most curated regional commercial real estate database in Minnesota. Learn more at northlandconnection.com.

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