Jobs and Economic Development
Last session, the supplemental budget bill was vetoed by Governor Dayton because many proposals were included within the bill that he found objectionable. The issues that were left unresolved include broadband funding, and line item appropriations for businesses from the Minnesota Investment Fund. Additionally, policy changes that were approved by the Unemployment Insurance Advisory Council were not adopted.
What has happened in this issue area since last session?
A tightening labor market is the main challenges the business community is talking about relative to this budget area. The number of unemployed Minnesotans has reached its lowest level since the recession. The labor market is tight, proposals to help businesses fill positions will likely be the focus of this committee. Paid sick and family leave will also be an issue that will garner some attention as it has been made a priority by the Walz Administration.
What is expected to happen this session?
Funding for broadband will likely be provided, as well as resources for job training. The incoming administration will also make paid sick and family leave a priority.
Employers across the state are having difficult filling their vacancies. DEED has reported that job vacancies increased to about 142,000 in the second quarter of 2018, a 16% change over the second quarter of 2017. The November Forecast outlined the workforce conditions as follows, “…the tight labor market is being felt across Minnesota. For the first time in the data series, both the Twin Cities and Greater Minnesota have a ratio of less than one unemployed persons to every job vacancy. The ratio is 0.5 in the Twin Cities and 0.7 in Greater Minnesota.”
Additionally, paid sick and family leave is a priority for the incoming administration. As communities continue to age it will put more stress on families to meet the care demands that occurring within their families. Additionally, allowing parents to spend time with their newborns or adopted children is critical to their child’s development. The state has not been able to find agreement on this important issue, which is why many communities are developing their own rules regarding pay and benefits at the local level.
The inability of employers to find workers is hampering growth. Approximately 58% of the job vacancies were in the metropolitan area, leaving 42% in Greater Minnesota. The November Forecast states Minnesota labor participation rate is high, “As of October 2018 the proportion of the population age 16 and older that is employed was 68%, highest among U.S. states, and 7.4 age points above the national rate. Similarly, the overall labor force participation rate (the share of the over-16 population that is either working or looking for work) was 70%, 7.1 percentage points higher than the national average and also the highest among U.S. states.”
To meet the employment demands of businesses, Minnesota will need an all-hands-on-deck approach to the workforce shortage gap. To address this issue, bills may look to continue to address disparities and provide additional educational opportunities for Minnesotans, including retraining opportunities.
Nearly all workers need to take time away from work at some point to deal with a family illness or to care for a new child. Whether it is caring for a parent, grandparent, sibling, or newborn the pressure of care is increasingly falling on loved ones who need to care for their loved ones. This pressure will only continue to grow with the state’s ageing population.
Governor-elect Walz and Lt. Governor-elect Flanagan have made paid sick and family leave a priority. In talking to a statewide business group Lt. Governor-elect Flanagan highlighted paid leave as a priority for their administration and hoped to work with business groups in crafting a common-sense solution for the betterment of all Minnesotans.
While preemption has mostly been associated with some local units of government raising the minimum wage under its jurisdiction, has expanded to styrofoam food containers and local building regulations. A push to preempt local units of government from acting on proposals that impact businesses will likely continue as local units of government move forward with changes that create friction with local businesses.