Job vacancies soar in Minnesota, but not wage offers

Minnesota hit a 12-year high for job openings over the summer, an encouraging sign for an economy that's soured by a deterioration in the quality of available work.

A growing share of openings are for part-time jobs, according to data the state released Wednesday, and the median pay offered to job candidates fell to $12.50 per hour in the past year.

"It's good for families to be able to find work, but at the same time that's not necessarily going to be enough," said Christina Wessel, deputy director for the Minnesota Budget Project, which recently released a report on wage inequality in Minnesota. "I hope it's an early indicator that things are turning around, but the reality for families facing this situation is that there just aren't enough opportunities."

Employers reported 72,570 vacancies in the second quarter, the most since 2001 and a 15.2 percent increase over the same period a year ago, according to the Minnesota Department of Employment and Economic Development (DEED).

But there are still a lot more people looking for work than available positions. About 153,000 people were unemployed in Minnesota at the end of July.

Jobs with the most openings include waiters and waitresses, retail salespeople, cashiers and landscapers, positions that all offer a median wage of less than $8.50 per hour. Nearly half the openings are part-time, and the median wage offer for all openings fell 50 cents an hour compared with a year ago.

Still, DEED Commissioner Katie Clark Sieben said the fact that there are more openings is evidence that the economy is recovering from the recession.

"Minnesota employers are feeling confident about the economy and are looking for people to fill their open positions," Clark Sieben said.

Firms are offering better pay this year than last year for full-time workers, the survey showed. The median wage for full-time work rose to $18.26 per hour, an increase of $1.43 over a year ago led by health care, computer-related industries and finance.

But overall wages fell because of the growth in part-time openings, which typically don't pay as well as full-time jobs, said Laura Kalambokidis, the Minnesota state economist.

"It's not so much a low-wage phenomenon as it is a part-time phenomenon," she said.

The reasons for the phenomenon are difficult to pinpoint, Kalambokidis said, but likely have to do with lingering anxiety from the recession and slow recovery.

"Businesses that are in an economy that is growing modestly and for whom there's still some uncertainties and risks on the horizon, maybe aren't ready to invest in full-time workers," she said. "They want the flexibility, perhaps, of hiring people on a part-time basis."

The Twin Cities and small businesses were the engines creating job openings in the second quarter, the state's analysis found. Job vacancies increased 22.3 percent in the seven-county metropolitan area, which accounted for three in five openings, compared with 6.7 percent growth in the rest of the state.

Companies with between 10 and 250 employees accounted for 68 percent of the openings, while large firms had 18.6 percent and small firms 13.3 percent.

Jobs in health care and social assistance accounted for almost one in five of the vacancies. Other major categories were retail, hotels and restaurants and manufacturing.

The Job Vacancy Survey is conducted twice a year to measure hiring demand by industry, occupation and firm size in Minnesota. More than 10,000 firms were surveyed in the latest study, with a 72 percent response rate.

Employers were also asked about their future hiring plans. The share of firms that said they plan to hire people over the next six months rose to 18.1 percent, compared with 11.5 percent last year. Some 76.3 percent said they plan to maintain their current payroll, while 5.6 percent said they plan to lay people off.

The increase in available part-time jobs squares with a national picture in which lower-paid employees are working fewer hours. The trend compounds the problem of stagnant earnings for lower-paid workers, according to a new report on the labor market from Wells Fargo.

Workers in the bottom fifth for wages still work fewer hours than they did before the recession, while higher-paid employees are working more hours.

"It's most pronounced when you look at the lower-paying jobs," said Jay Bryson, the Wells economist who wrote the report. "Not only are these guys seeing their real wages going down, … you couple that with lower hours worked in those industries."

Meanwhile, lower-paying industries have accounted for a disproportionate share of U.S. employment gains over the past three years.

"The income distribution in this country has become more skewed over the last 30-some years," Bryson said. "That's a fact.

Adam Belz • 612-673-4405 witter: @adambelz