The State of Working Minnesota 2001
Executive Summary
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Wage Growth in Minnesota
Minnesota’s workers have benefited from hourly wage
increases from 1989 to 2000, with low wages growing 17.0%, median wages up
16.6%, and high wages rising 10.7% after adjusting for inflation.[1] In this respect, the 1990s differed from the
1980s, in which low and median wage workers suffered declining hourly wages
while high wages increased. Strong
growth at all wage levels in the second half of the 1990s also meant that
Minnesota’s workers earned higher wages than their U.S. counterparts.
Data on wages do not show how well workers can meet their
needs unless they are compared to the cost of necessary goods and
services. This report uses the Family
Budgets prepared by the JOBS NOW Coalition to measure whether a worker is able
to support a family through full-time, year-round work. Analysis by JOBS NOW finds that in 1999,
more than one-third of Minnesota’s workers made less than $10.38 an hour, the
wage needed to cover the Family Budget for a family of four with two parents
working. In addition, 62.1% of female
workers made less than $13.94, the amount needed for a single parent family of
two.
Workers in Greater Minnesota have an even harder time making
ends meet: while the cost of living in Greater Minnesota is 16% lower than in
the Metro Area, average wages are 31% lower.
Over the last twenty years, Minnesota’s workers have put in
longer hours. Married couple with
children families have increased their average annual work hours by 7.6% since
the late 1970s, adding an additional 275 hours, or nearly seven additional
weeks of work, during the year. Single
parent families increased their work hours by 7.3% over the same time
period. But Minnesota’s workers may no
longer be able to respond to wage declines by increasing their hours — the
average single parent family works 38 hours a week year round, and the average
married couple with children family works close to the equivalent of two
full-time, year-round jobs.
Job Trends in Minnesota
Whether Minnesota’s workers can earn family-supporting wages
depends in part on the types of job opportunities available. The service industry is the largest industry
in Minnesota and its share of all jobs is growing. Services, agriculture, and retail trade have the three lowest average
annual wages in Minnesota, and together made up 47.6% of all jobs in Minnesota
in 1999. High-paying industries, on the
other hand, have seen their share of total jobs in Minnesota decline, with
mining suffering net job losses.
Workers not only want wages that can support their families,
but also quality jobs with benefits.
Little progress has been made since the late 1970s in providing
Minnesota’s workforce with employer-based health insurance and pensions. In the late 1990s, 58.6% of private-sector
employees had employer-provided pensions and 64.6% had health insurance provided
by their employer or the employer of a family member. This reflects a gradual decline in the percent with
employer-based health insurance since the late 1970s. Pension coverage has increased from the 1970s, but this may be
due to the trend away from defined benefit pensions and toward defined
contribution plans, which shift much of the risk to the employee.
Workers Without Work
Unemployment in Minnesota dropped significantly in the
1990s, reaching 2.5% in 1998. Since
then rates have started to increase, but remain at historically low
levels. Minnesota has been fortunate to
have had a lower unemployment rate than the U.S. as a whole for the past twenty
years, although the recent increases have brought Minnesota closer to the
national figure.
Regional Disparities in Unemployment and Job Vacancies
Many of the state’s urban hubs, including the Twin Cities,
Rochester, Mankato, and Moorhead areas, have benefited from unemployment rates
below the state average. In contrast,
most of the northern half of the state has unemployment rates higher than the
national average, with three northwestern counties exceeding 11%. Since the state’s unemployment rate began
increasing in 1998, northwestern Minnesota has also seen the largest increases
in unemployment. Adding to the
difficulties faced in areas of high unemployment is that the majority of job
vacancies are in the Twin Cities. The
job vacancies in Greater Minnesota offer lower median wages and are less likely
to offer health insurance.
Unemployment has been creeping up, and certain parts of the
state have not equally shared in the strong economic growth of the 1990s. This raises the question of whether adequate
supports exist to help Minnesota’s workers ride out economic ups and
downs.
[1] In this
analysis, a low wage worker earns a lower hourly wage than 80% of all workers;
a median wage worker is exactly in the middle, with half of workers making more
and half making less; and a high wage worker makes a higher hourly wage than
80% of all workers. All wages are
adjusted for inflation. Back to text.
Updated August 28, 2001
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