Strategic Advocacy Manager, U.S. Chamber of Commerce
Director, Global Employment Policy & Special Initiatives, U.S. Chamber of Commerce
Graphic Designer, U.S. Chamber of Commerce
September 15, 2023
The state of Minnesota has a favorable landscape for businesses and individuals, with a diverse economy, strong labor market recovery, and a robust small business ecosystem. Immigrants contribute meaningfully to the state's workforce and economy, while educational attainment, quality of life, and cost of living factors remain promising.
The Worker Shortage Across America
Explore the interactive map below to see the impact of the worker shortage crisis in each state.
The Chamber’s Worker Shortage Index ratio indicates the number of available workers for every job opening. A ratio above 1.0 indicates a surplus of available workers compared to job openings.
Minnesota’s Labor Market
Prior to the pandemic, Minnesota’s labor market was stable. The state had nearly enough workers to fill every open job and more workers were being hired into jobs than leaving them. The state's unemployment rate stood on par with the national figure at 3.5% and its labor force participation rate was higher than the national rate of 63.4%.
Minnesota's current labor market has largely rebounded and is exhibiting robust signs of improvement. While the state's labor force participation rate is still a little behind its pre-pandemic levels, it is still six full percentage points higher than the national rate.
Minnesota’s hiring rate continues to surpass its quit rate, and its unemployment rate remains lower than it was before the pandemic. These trends are particularly promising for employers, who have a surplus of 73,000 job openings compared to February 2020. On the downside, Minnesota is grappling with a severe workforce shortage, evident by the fact that there are only 60 available workers for every 100 open job positions in the North Star State.
Minnesota’s Business Environment
Minnesota's business landscape is diverse, featuring a vibrant tourism sector centered around its "Land of 10,000 Lakes," the renowned Mall of America – the largest shopping mall in the United States, and a wide array of winter activities. The state is also home to several major corporations, world-class healthcare facilities, and a large university.
The majority of Minnesotans find employment in the education and health services sectors, as well as in trade, transportation, and utilities industries, while the construction sector employment is relatively low. Minnesota's employment scene reflects its status as a hub for leading healthcare, insurance, and technology companies.
Minnesota boasts a thriving small business ecosystem, with 99.5% of all Minnesota businesses falling into this category. Nearly half of Minnesota's workforce works within small businesses. Within this dynamic landscape, women own 41.1% of small businesses, 9.6% are minority-owned, 2.5% are owned by Hispanics, and 2.5% are veteran-owned.
Minnesota’s Educational Attainment
Twenty-three percent of Minnesota’s population has obtained their high school diploma or its equivalent, which is less than the U.S. average of 26.1% in 2022. However, 25.4% of the population in Minnesota has earned a bachelor's degree, surpassing the national average, while 13.7% have achieved graduate degrees, on par with the national average.
Over half of Minnesota college freshmen are remaining in the state for their higher education, where the average in-state tuition is $11,748. Out-of-state tuition in the North Star state is $24,442, below the national average out-of-state tuition of $28,000. Nearly 396,000 undergraduate students are enrolled in a Minnesota college for the 2022-2023 school year. These students supply a rich talent pool from which local employers can recruit talent.
Quality of Life
Minnesota's median household income of $90,390 ranks higher than the national average of $70,000 which places the state at the 8th rank among all states. Minnesota has a graduated tax rate system, ranging from 5.35% to 9.85%, which places the state among those with some of the highest tax rates.
A third of Minnesota’s workforce are remote workers. For those commuting into an office, the average commute time is 24 minutes. The Council for Community and Economic Research measures states’ costs of living compared to the national average of 100. Minnesota’s cost of living index falls at 91.50, meaning the state is more affordable in comparison to the national cost of living. The median rent settles at $1010, while the median home cost is $336,279, both falling beneath the national average. Nearly 70% of the population owned their housing unit in 2021. The state experienced a very minimal growth rate of 0.13% from 2020 to 2022.
In the U.S., immigrants tend to be of working age in comparison to native-born individuals. Consequently, they are more actively engaged in the labor force, playing a dual role as both consumers and taxpayers, contributing to help fund programs like Medicare and Social Security.
Looking at Minnesota in particular, immigrants comprise 8.5% of the state's population, totaling 476,566 individuals. Their collective spending power amounts to $12.9 billion, while their tax contributions reach $4.6 billion.