The challenge of finding employees continues to grow in rural Minnesota, but average earnings have risen.
A recent State of Rural 2024 report by the Center for Rural Policy and Development found many differences in the economies of rural areas and the Twin Cities metro, but one thing was similar.
“The education and health services sector is the largest employer in a majority of Minnesota counties, whether it’s rural or the metro,” said Kelly Asche, senior researcher at the center, which is based in Mankato.
Rural counties have a higher percentage of people employed in agriculture and government jobs or who are self-employed, while the Twin Cities area has a significant share of people employed in the professional and business services sector, which includes jobs like management of companies, legal advice and representation, and accounting.
“In some rural areas like yours, manufacturing, the trades and utilities are big. And the wages are going up in those sectors.”
He said the big story in rural Minnesota remains the talent challenge.
“We are at an all-time low in our unemployment rate, and we’ve had some people drop out of the labor force during the pandemic. That’s recovered some, but it’s not back to where we were pre-pandemic.”
He said the job vacancy rate in rural areas is at 8½-9%, which is higher than the metro. “A rate of 3 to 4% is normal. Anything higher than that is a problem,” Asche said.
He said the worker shortage is occurring as we are in the center of the baby boom generation leaving the workforce and as the economy keeps growing stronger.
The worker shortage has caused rural earnings to go up.
“There’s still a gap between rural and the Twin Cities, but the highest growth in earnings has occurred outside the metro area.”
While earnings remain higher in the seven-county metro, a lower cost of living in outstate narrows the gap.
The study looks at earnings, not just wages. Asche said that better represents rural Minnesota where farming is big and where there are more self-employed business owners.
After a rollercoaster decade, farmers are getting some relief, according to the study.
After a decline in land values from their peak in 2014, values again have increased to historic highest in 2022. Land along the western side of the state has increased in value as much as 1,000% since 2000.
Ag markets have improved over the last few years. Average incomes are exceeding expenses, resulting in some of the highest net incomes farms have seen recently.
The study and other research can be found at ruralmn.org.