Job vacancies in Minnesota rise to highest level since 2001

The Twin Cities area now has one job vacancy for every unemployed worker, new state data show, and Minnesota has only slightly fewer openings than unemployed people.

The number of vacancies in the state rose to 88,900 at the end of 2014, a 47 percent increase from a year earlier and the highest level since the summer of 2001, according to figures released Tuesday by the Minnesota Department of Employment and Economic Development.

"The increase in job vacancies is another sign that labor markets continue to tighten in Minnesota," said Rob Grunewald, an economist at the Federal Reserve Bank of Minneapolis. "However, the report also shows that the median wage offer increased just over 2 percent from a year earlier, which is mild growth."

Wages have remained stubbornly stagnant for the average American worker in recent years. In Minnesota, low-wage offers are making it more difficult for hiring managers to fill open positions.

More than half of the new vacancies in the past 12 months are in occupations that pay less than $12 per hour. Retail openings skyrocketed in 2014, as did vacancies in food service and personal care jobs.

Workers don't want jobs that pay so little and they're starting to vote with their feet, said Oriane Casale, a labor market economist for the state.

"Retail establishments have such low wages that they're having a hard time finding workers these days," Casale said. "Part of the reason that there are so many retail, food service, low-wage job openings is that they're just sitting out there unfilled. Employers just aren't able to find people at that wage."

Firms with 10 to 249 workers accounted for the lion's share of vacancies — 63.7 percent. Large firms with 250 employees or more accounted for 19.6 percent, while small firms with fewer than 10 workers had 16.7 percent of the vacancies.

With tens of thousands of boomers retiring each year and the unemployment rate down to 3.7 percent, the number of job openings should be expected to rise. But economists are still waiting for significant growth in high-wage occupations. Also, two in five openings in the state is for a part-time job.

"What's scary about this is this structural change in the job market itself," said Kevin Ristau, education director for the Jobs Now Coalition, a St. Paul-based research and policy group. "I guess we're just supposed to accept the fact that the growth is going to be in low-wage occupations."

The median wage offer for Minnesota openings at the end of 2014 was $13.29 per hour, a 29 cent increase over 2013. But wages adjusted for inflation between 2006 and 2014 are actually down 5 percent, Casale said.

"Wages really are not responding to the labor market yet," she said.

"The labor market is expected to continue tightening as more baby boomers retire and companies hunt for workers to replace them," he said.

The state's Job Vacancy Survey is a twice-annual look at the number of openings statewide, the wages offered, and the education and experience required for each job. The state has conducted the survey and published the results since 2001.

The study found that 55.4 percent of the vacancies — 49,300 — were in the seven-county area of the Twin Cities. The remaining 39,600 vacancies were in the rest of Minnesota. Vacancies were up 48.6 percent from a year earlier in the Twin Cities and up 45.6 percent in Minnesota outside the Minneapolis-St. Paul metropolitan area.