Minnesota's unemployment hits record low, but wages don’t keep pace with inflation
(FOX 9) - While many businesses throughout Minnesota struggle to find workers, unemployment claims throughout the state have fallen to record lows as wages struggle to keep pace with inflation.
According to the Minnesota Department of Employment and Economic Development (DEED), in April the unemployment rate fell to 2.2% – down from 2.5% in March. Minnesota gained 11,900 jobs in the month, up 0.4% from March, and continuing a streak of growth that has lasted seven consecutive months.
"Our economy remains strong, job growth continues, and more people continue to return to work," DEED Commissioner Steve Grove said in a statement. "However, racial disparities in employment remain."
The good news is Minnesota’s unemployment rate is the lowest on record since the state started recording data in 1976.
The bad is that hourly wage gains year-over-year are not keeping pace with the rest of the U.S., let alone inflation.
According to the announcement, the leisure and hospitality industry continued to post the highest year-over-year growth in Minnesota, up 12.9%, or 27,585 jobs. The arts, entertainment and recreation industry increased 22.8%, or 7,848 jobs.
However, two sectors saw negative annual growth in Minnesota – construction was down 4%, or 4,988 jobs, and mining and logging was down 1.3%, or 85 jobs.
In total, Minnesota lost 417,600 jobs from February through April 2020, but has since gained 329,500 jobs as of April 2022, or 79% of the jobs lost, according to the announcement. The private sector has regained 322,700 jobs, or 83% of its jobs lost.
"Minnesota workers made history today. A lot has changed in our state since 1976, but the work ethic of Minnesotans and our resilience through the most challenging of times has not," Gov. Tim Walz said in a statement.
Despite job growth and low unemployment, wages in Minnesota and across the nation continue to pace behind the rate of inflation.
The average hourly wage rose 70 cents, up 2.2%, year-over-year in Minnesota. Over two years, average hourly earnings in the state increased 79 cents, or 2.4%.
Meanwhile, national private sector wages increased 5.8%, and 6.1%, respectively.
But the CPI inflation index for all urban consumers rose 8.3% over the year, and 12.8% over two years.