Job vacancies rise, median wage offers fall

The number of job openings in Minnesota is rising, but the wages offered by employers are not.

The number of vacancies in Minnesota rose 16.7 percent over 12 months to 84,696 at the end of the second quarter, according to the state's twice-annual Job Vacancy Survey, released Thursday. Vacancies have doubled since 2010 and now have hit their highest total in 13 years, the Minnesota Department of Employment and Economic Development said.

With the number of officially unemployed Minnesotans dropping below 128,000 in August, the news is reason for encouragement. Three years ago, the ratio of unemployed workers to openings was 4 to 1. At the end of June the ratio was less than 2 to 1.

"The ratio of unemployed people to vacancies now is the lowest it's been since the fourth quarter of 2001," said Steve Hine, the state labor market economist.

But wage offers for available jobs are not rising as the labor market tightens. The median wage offer for all openings at the end of June was $12.05 per hour, compared with $13 per hour at the end of 2013, and $12.50 at the end of June 2013.

Nearly half of the openings are in retail trade, health care and social assistance, and hotels and restaurants. Those three industries — in which the median wage offers are $9.99, $12.83 and $8 per hour — accounted for 39,389 of the openings.

While health care is an expanding industry and many health care jobs pay quite well, a growing share of health care jobs in Minnesota and across the country are low-wage positions. Retail, hotels and restaurants are high-turnover industries and usually have high numbers of openings.

This is not necessarily bad news, said Hine.

While a high number of job vacancies in an industry may show that sector is growing, it also can reflect churn in the workforce. Job vacancies reflect the need for replacement more than job growth. Fewer openings in high-skill, high-wage industries may simply reveal the movement of high-skill workers out of low-wage jobs and into higher-wage jobs.

"People are more interested now in looking for better alternatives, because it's worth your while to do so now," Hine said. "When an individual quits their bartending job to go fill an IT position, you close a vacancy in the IT sector and you open a vacancy in the leisure and hospitality sector."

More than half of the state's vacancies — 47,100 — are in the seven-county Twin Cities metro area. The remaining 37,600 vacancies were in the rest of the state. But Minnesota outside the Twin Cities is generating job vacancies faster than the metro area is. Job vacancies were up 24.3 percent over the past 12 months in Greater Minnesota, compared with 11.3 percent growth in the Twin Cities.

Middle-sized firms with 10 to 249 employees accounted for 64.5 percent of the openings. Large firms with 250 workers or more had 22.8 percent of the vacancies. Firms with fewer than 10 workers had 12.7 percent of the vacancies.

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