The forgotten workers in our economic recovery work long hours, facing erratic scheduling and low wages. (PHOTO: jpmatthw, Flickr Creative Commons license)
For the last year I’ve written fairly consistent economic observations of living and working on Northern Minnesota’s Iron Range: There are jobs here, but most of them pay low wages and are found in the service sector, not in mining. An overwhelming majority of the region’s workforce is found outside the “traditional” blue collar careers typically associated with our area, primarily in health care and hospitality.
Contrary to the stereotype of the “lazy poor,” people working in these lower-end jobs work like dogs, week after week, with a very difficult path into the middle class. Their hours are long, their schedules unpredictable. Add child care woes, bad health or a blown head gasket and it can all come tumbling down. I count among these people close family and friends, and most of the people I teach in class every day at the community college. This is not hypothetical. It is plainly seen.
Now, new data from the Minnesota Department of Employment and Economic Development shows these points exactly. (I’ve included a Jobs Now Coalition fact sheet on this topic at the bottom of this post). Jobs are coming back to the region after the recession six years ago, but the median wage for these new jobs is below $10, which puts them more than three dollars below what’s deemed a “living” wage (something Jobs Now pegs at about $13.60 per hour for this area). The new state minimum wage of $9.50 for large employers helps, in that it will push some wage growth up from the bottom, but making the leap from minimum wage to living wage is still tough sledding.
It’s true that hiring has been somewhat brisk in the mining sector as well, and those are much better-paying jobs. But it’s important to remember that those jobs circulate within a higher-educated, more highly-experienced slice of the workforce. The same is true even in the economically diversifying city of Duluth, where the new problem isn’t recession, but stratification. People in the working poor would need a college degree or several years in a trade to have a shot at those jobs, something that can be hard to do with a family, rent and transportation issues. True, nothing worthwhile is free or easy, but when larger and larger portions of the population are succumbing to the same economic conditions, all of society stands to lose in the long run.
Further, when the most stable jobs in your economy are tied to a volatile industry like mining, you run the risk of localized economic depressions when the market falls out, which — in case anyone has forgotten — happens here every 10-20 years or so.
So what do we do with this information? Clearly, paying all workers a living wage is one possible solution, but one that would be politically difficult and require a new attitude about how we think about our economy and prices for the goods and services we buy (and where we buy them). It stands no particular chance of passing the state legislature. Such a proposal would require voters to maintain commitment to a cause for more than two years, something they haven’t done in recent memory. So let’s work this from the micro level, rather than the macro.
My pat answer this year has been “economic diversification,” and, sure, I still think that’s the solution. Those words alone, however, don’t mean much. How do we diversify? This requires a level of public sector and private sector cooperation that has been lacking here in Northern Minnesota. First, “we the people” must decide we want comfortable, modern communities with reasonable expectations of public services and healthy private investment and employment. We already *say* we want this, but we tend to behave as though the most important thing is keeping everything the same. That’s a holy disaster in waiting. Actually, it’s not waiting. It already happened.
Again, there might be hundreds of possible ideas that would address diversification. The three I tend to favor are the ones I spend my time working on: higher education/workforce development, broadband infrastructure, and community “vibrancy” — arts, aesthetics and programs that make people want to live here, not somewhere else.
The reason I spend so much time on those issues is because they are necessary to create a culture of entrepreneurship, which could include any manner of ideas from many different kinds of people — here in the region, or from somewhere else.
That’s a lot to glean from one little snapshot of jobs and wages in Northeastern Minnesota, but we stand to gain nothing letting information like this wash over us without response.
Here is the JOBS NOW Coalition press release that I referenced earlier:
Job openings in Northeast Minnesota are up 254 percent compared with five years ago, according to the updated Job Vacancy Survey from the Minnesota Department of Employment and Economic Development.* As the Great Recession ended in 2009, Northeast Minnesota had just 1,500 openings; the current survey shows the region with 5,400 openings.**
But job quality remains a big problem. The median wage for all openings is $9.99 per hour—the lowest median wage for any of the state’s six planning regions.***
Two-thirds of all openings are in six low-wage occupations—food preparation and serving, healthcare support, transportation and material moving, sales, janitorial, and personal care and service. For openings in these occupations the combined median wage is $8.73 per hour.
- Other major findings for Northeast Minnesota include:
- Only 36 percent of all openings require education or training beyond high school; only 20 percent require a four-year degree.
- More than 40 percent of all openings are part-time.
- Nearly 30 percent of all openings are temporary or seasonal.
- With 10,200 job seekers competing for only 3,100 full-time job openings, job seekers outnumber full-time openings by more than 3-to-1.
According to DEED’s new Cost of Living in Minnesota research, the Northeast Minnesota average for a family-supporting wage is $13.60 per hour. To see the updated Cost of Living research by county, use DEED’s Cost of Living Calculator at http://mn.gov/deed/data /data-tools/col/index.jsp
* The Northeast Minnesota Planning Region consists of the following counties: Aitkin, Carlton, Cook, Itasca, Koochiching, Lake and St. Louis.
** Figures for job seekers and job openings are from second quarter 2014. https://apps.deed.state.mn.us/lmi/jvs/ChooseAreaMap.aspx
*** A median is a midway point; half of the jobs are above it, half below.
**** The average family size in Minnesota is three persons; the average workweek is less than 35 hours. Partnered, 1 full-time and 1 part-time worker, 1 child, provides a standard yearly cost and hourly wage need for a typical family, regardless of how the weekly work hours are distributed between the two adults.
This piece was cross-posted with my “Up North Report” blog at the StarTribune.com.
I agree with higher education. At the very least, it’s a ticket out of the area. It’s also a ticket to stay and prosper in the area. The right education is important. There are plenty of art history majors. What we’re lacking is people who can actually do something useful with their education, Doctors, lawyers, engineers, carpenters, plumbers, mechanics, to name just a few. As you state in the article, the problem with education is to take at least two years off life to get it.
We have the schools here and in Duluth. We aren’t using them to their full potential. There should be a way to get a meaningful education without putting the rest of life on hold.
Universal high speed internet service is a pipe dream for rural Minnesota. How unfortunate that someone like Northern Power couldn’t bite the bullet and start stringing fiber on their poles like Paul Bunyan is doing in Itasca County. They have the infrastructure to start and they have good financing available from the government. Instead they chose to become a franchise sales agent for a crappy satellite internet service.
Ultimately this is as important to rural Minnesota as railroads and roads were to previous generations.
We are little more than a cold Appalachia facing most of the same problems they do. They are doing no better. Like Appalachia, we have a lot of social problems, drugs, alcoholism, unwed pregnancy, crime. We have to get a handle on that to move ahead too. We are loosing a generation of young people to this.
Arts and attractions are a pump priming proposition at best. They need to be funded to be supported. They need to be supported to be funded. Catch 22. Grand Rapids is more supportive of this than the rest of the Range towns. It seems to be working for them to at least a limited extent. Bemidji with its college is very vibrant. Maybe that’s what we need for a foundation, a 4 year college. Small towns with them are much more vibrant than ones without.
I agree most of the Range towns are pretty dumpy looking. The downtowns look like a meth addict’s teeth, full of decay and gaps.
Our politicians have been way too willing to try to lead us to the Super Bowl of economic development, Endotronics, Chopstick Plants, Jeno Palucci’s plant, the clean coal power plant. Our record there is no better than the Vikings in the Super Bowl. It stems from the old days when the mining companies always came through with the big fix just in the nick of time, like washing plants, taconite, other things. Big fixes that worked for a while.
We aren’t Packers fans that need a Super Bowl fix every few years. We are Vikings fans that are happy and grateful for a first down once in a while. A Magnetation plant here, a sawmill there, maybe a few call centers thrown in, after a while it adds up.
Finally, there will always be jobs at the low end of the spectrum, like gas station cashiers and the people behind the counter at McDonalds. These are supposed to be stepping stones on the way up, not careers. This is the only place I know of where someone can and will work as a cashier at McDonalds for 30 years.
Right now, less than half of the steel used in this country is made from iron ore pellets produced in Minnesota and Michigan, and this market is shrinking. Iron mining being the economic backbone of the area is also in jeopardy. The prime example of why is the new Ford F-150 pickup, the highest selling vehicle in America, with its aluminum body and box.
We have a resource that goes on forever, but the taconite industry’s only customer right now is blast furnaces inside the United States and Canada. The biggest use for blast furnace iron is making sheet steel for car bodies.
In one fell swoop the use of steel made from pellets for F150 bodies and boxes has been eliminated. Not only does Ford sell a lot of them, they are relatively heavy vehicles. They used to use a lot more body steel than smaller cars. Now they use none.
The aluminum F 150 is a major hit to taconite production by itself. If this becomes common for other vehicles it will take out two or three of the taconite plants in Minnesota and Michigan before the dust settles.
First, any local iron miner that buys an aluminum F150 is hurting himself and other miners.
Second, the number of operating blast furnaces in the United States and Canada has been decreasing steadily since the 1970’s. This trend will continue, accelerated if aluminum becomes more common in car building. Without this customer for our pellets our main industry is dead. Taconite has no other use.
In 20 years, maybe less, taconite will be a much smaller industry than it is now.
We have to diversify if we are to remain as a viable community. Otherwise we will wither on the vine like Calumet, Michigan or Atikokan, Ontario.
The odds are against us. Like Aaron said elsewhere, no mining area anywhere has survived economically when mining ceased unless a nearby city enveloped them.