Unemployment down as labor market keeps shrinking

Wednesday, November 23, 2016

The tables have turned on the local job market since the recession as too few people are around to take available jobs.

"After four straight months of the labor market dropping, that's a trend," said Erik White, the regional labor market analyst for the Department of Employment and Economic Development. "It's hard to create jobs if you don't have people to fill them."

An already-tight local labor market continued to shrink in October as the number of people working or looking for work in hit a 20-year low.

State data released Tuesday showed that in the Duluth metro area — St. Louis, Carlton and Douglas counties — 139,126 people are in the labor force, the lowest number since 1996.

White said that with a generation of workers entering retirement and few people moving to the region, a smaller labor force may continue to be the case.

"It's going to be really hard to expect job growth in the region just due to our population," he said. "We're not projecting much job growth in the region from 2014 to 2024."

The lower labor headcount helped bring unemployment down even as total employment also fell. The three-county region saw unemployment drop to 4.6 percent in October. That's a point lower than September but slightly above the October 2015 rate.

The biggest year-over-year growth came in the financial sector and professional and business services, while retail and mining, logging and construction employment is below last year's numbers.

Retail should see a bump from holiday hiring in the next few months. But what if there aren't enough people to work those jobs?

"I keep hearing from employers struggling with the needs of hiring right now," White said.

He added a tighter labor market means employers are competing with one another for workers, sending wages up in some cases.

"On the job-seeker side, there's opportunity out there to come up and continue, hopefully, to see those wages rise in low-paying industries as they compete for talent," White said.

The unemployment rate inside Duluth city limits sat at 3.6 percent last month, just above the state rate of 3.2 percent.

Iron Range cities saw a big drop in unemployment, with Hibbing falling to 6 percent after reaching 8.7 percent this time last year. Virginia dropped 1.7 percent in the past year as its rate fell to 4.9 percent in October.

This article originally appeared in the Duluth Tribune News. To view the original article, please click here