Minnesota Job Outlook to 2016
Total employment in Minnesota is projected to increase by 291,000 jobs between 2006 and 2016 reaching almost 3.3 million jobs by 2016 according to 2006-2016 Minnesota employment projections. The projected increase is slightly greater than the 280,000 jobs added during the previous 10-year period, 1996-2006. The rate of job growth, however, is expected to be a bit slower over the next 10 years compared to the previous 10 years. Minnesota's employment base increased by 10.4 percent over the 1996-2006 period. Employment expansion over the 2006-2016 period is expected to be 9.8 percent.
Minnesota, along with all the other states, customizes national projections to reflect the unique industrial, occupational, and demographic mix of the individual state. Historical employment trends for 290 industries in Minnesota are compared to corresponding national industry employment trends using both time series and regression models. The models are used along with BLS's projections of national industry employment to produce industry projections for Minnesota.
Minnesota's 10-year employment projections are based primarily on national projections updated every two years by the BLS. BLS projects gross domestic product (GDP) growth to average 2.8 percent annually during the 2006-2016 projection period, down from the 3.1 percent average annual increase realized during the 1996-2006 period.
Projected industry employment is converted into occupational employment projections based on industry staffing patterns-the distribution of industry employment across occupations. Staffing patterns for Minnesota industries are developed from estimates of occupational employment collected by the Minnesota Salary Survey, which is a product of the Occupational Employment Statistics (OES) Program. Projections on 10-year changes in industry staffing patterns are provided by the BLS projections research team.
The main goal of employment projections is to provide details on projected job growth and employment prospects for approximately 790 occupations in Minnesota. Projections of future job growth at the national, state, and substate level are widely used in career guidance, in planning education and training programs, and in workforce development efforts in the private and public sectors.
Changes in the demand for goods and services, productivity advances, technological innovations, and shifts in business practices combine to alter occupational employment demand and affect job prospects. The expected expansion of health care services over the next 10 years is an unswerving example of how changes in the demand for goods and services fuel demand for particular occupations. As the baby boom generation enters its senior years, demand for health care services will steadily increase.
BLS expects expenditures on health care and social assistance services to jump 3.6 percent each year through 2016 compared to the 2.8 percent annual growth of GDP. Increasing health care service expenditures will in turn boost the demand for workers in health-care-related jobs like registered nurses, pharmacists, dental assistants, and home health aides both nationally and in Minnesota.
While most occupations will experience varying rates of employment growth over the next 10 years, 21 percent of occupations, or 168 out of 790 occupations, are projected to decline. Declining occupations are concentrated primarily in production occupations and to a lesser extent in office and administrative support jobs. Occupations expected to see the most job decline over the next 10 years are stock clerks and order fillers, cashiers, hand packers, farmers, order clerks, and file clerks.
Employment projections attempt to incorporate all the demands, business practices, production methods, and technology trends, but trends can and do change unexpectedly. Offshoring, the practice of U.S. firms' sending service-related work overseas, is one such trend that will affect job opportunities in a number of occupations in the future. Occupations that are most likely to be at risk for offshoring have been identified by the BLS. Projected job growth rates for occupations likely to be offshored, such as information technology occupations, have been scaled back from previous projection rounds.
Minnesota's total employment is projected to increase 9.8 percent over the 2006-2016 period or a tad under the 10.4 percent projected increase for U.S. employment. Minnesota's employment growth also lagged the national pace over the previous 10 years, increasing 10.4 percent in Minnesota and 11.8 percent nationally between 1996 and 2006.
The two largest major occupational groups in Minnesota - professional and related occupations and service occupations - will increase the fastest and add the most jobs in Minnesota from 2006 to 2016. These two major occupational groups, which tend to have occupations at the opposite ends of the educational attainment and earnings range, are projected to account for more than two-thirds of all employment growth over the next 10 years. Employment in management, business, and financial occupations is also projected to grow faster than overall employment growth.
Even occupations that are expected to decline in numbers over the next 10 years will have replacement openings. There will be fewer file clerks employed in Minnesota in 2016 than in 2006 (2,400 vs. 4,000), but some of the file clerks in 2016 will be new to the occupation, having been hired to fill replacement openings. Just over 1,000 workers are projected to be needed to meet net replacement demand for file clerks over the next 10 years. Because of the importance of replacement needs, estimates of net replacement openings for each occupation over the next 10 years are included in the 2006-2016 employment projections for Minnesota. Net replacement openings, entrants minus separations, are based on nationwide census data that track the entrants and separations of an occupation by age cohorts. The net replacement opening estimates understate the total number of job openings in an occupation but are the best estimates of job openings available to new labor force entrants.
In addition to the 291,000 job openings projected to be created through employment growth over the next 10 years, 650,000 net replacement openings are projected. Occupations with a high number of net replacement openings tend to be occupations with large employment bases in 2006 and high turnover rates. About 70 percent of the occupations are projected to have more net replacement openings than openings from employment growth. Net replacement openings need to be included when exploring the future prospects of any occupation. The need to fill replacement openings will only increase over the next decade as the first wave of baby boomers begins to retire.
Detailed projections for Minnesota can be found at: http://mn.gov/deed/data/data-tools/employment-outlook.jsp
Source: Minnesota Employment Review, Dave Senf, 6/2008