Unemployed Minnesotans face longer job searches in ‘no hire, no fire’ market

Rachel Kuzma remembers the moment the email arrived.

After more than a year and hundreds of unsuccessful job applications, yet another rejection — for an entry-level job she was overqualified for — had landed in her inbox. It was too much.

“I haven’t really been applying to jobs since then, especially since the market has gotten even worse,” the 31-year-old Mankato native said. “Why would you keep banging your head against a wall?”

Kuzma, who is living in St. Louis after earning a Ph.D. from Washington University, is among a growing group of Americans who have spent more than six months looking for work.

In Minnesota alone, the number of those in “long-term” unemployment nearly doubled since last year, reaching more than 21,000, according to the state Department of Employment and Economic Development (DEED).

It’s a symptom of a “no hire, no fire” job market: Economic uncertainty has kept employers from hiring, but the recent memory of struggling to rehire after mass pandemic layoffs has so far prevented large-scale cuts.

“In a nutshell, the story is that it’s a good time to hold on to the job you have,” said Nancy Vanden Houten, lead U.S. economist at Oxford Economics, “but if you’ve lost a job or you’re looking for your first job, it’s a very difficult environment.”

“Despite the strong economic growth we saw in the second quarter, this month’s release further validates what we’ve been seeing in the labor market: that U.S. employers have been cautious with hiring,” ADP Chief Economist Nela Richardson said in a statement.

In August, a quarter of unemployed Americans, or 1.9 million people, had been jobless since at least February, data from the U.S. Bureau of Labor Statistics (BLS) showed. That’s 385,000 more than the prior year.

Minnesota’s 3.6% seasonally adjusted unemployment rate has edged up but is still lower than the national rate, which reached 4.3% in August after hitting a 50-year low in 2023.

When unemployment rises, long-term unemployment generally does, too, said Angelina Nguyễn, director of DEED’s labor market information office, in an email.

State unemployment insurance data showed permanent layoff continuing claims are rising in sectors that tend to be higher paying.

In August, occupations with the greatest number of permanent layoff continuing claims included management; office and administrative support; and sales.

Nguyễn also noted a recent DEED job counselor survey found jobseekers overall are struggling more than last year, with positions in management, IT and creative fields especially hard to find.

Minneapolis resident Brandon Vasquez, 44, lost his marketing director job around Christmas. After months of applying to multiple jobs a day without success, he joined his family’s construction business at the end of June.

The job market felt tougher this year than it did after a previous layoff in 2023, Vasquez said.

“Every 100 applications I put in, I’d maybe get three to five interviews,” he said of his 2023 search. “This time, I had to put in 100, 120 to get one interview.”

The 30-year-old of Brooklyn Park recently retrained to work in IT, choosing a course that offered a laptop and, she thought, an internship.

When that turned out to not to be the case, she again found herself on her own. She’s back on LinkedIn after a hiatus, networking and applying for cybersecurity jobs.