What’s Minnesota’s Silver Bullet?

​Before I get into it, I need a minute. Tell me you aren’t feeling batted about with the horrific killings this year already.  The most recent heinous acts of 5 Memphis police officers; killings in LA during the Lunar New Year celebrations; St. Paul’s own shooting at a rec center. And more. CNN tells us, “there have been more mass shootings than days in 2023” thus far. As of the 22d day of the year, there already had been at least 36 mass shootings in the U.S. There are no words to convey adequately our community horror, united sympathy for families. I don’t have any answers; I simply have to pause, with you, in a moment of shared grief.
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I do have one ask for you: we want your feedback on the City of St. Paul's proposal to increase the sales tax by 1% to fund street and park improvements. You can access the short survey here.  Your response will inform our thinking so please let us know what you think!
 
Bottom line for my thoughts this week: despite the pressure of high interest rates and fears of recession, the U.S. economy ended 2022 on solid footing. Economic growth remains solid, if slow, largely on the hiring within our amazing small business sector (remember, they’re our economic engine!). We certainly are seeing inconsistency, with select large tech companies laying off, but small companies definitely are still hiring, and both GDP/consumer spending remain in modestly positive growth mode. What remains uncertain is ongoing inflation, with wage growth alongside a job market that is still too tight.
 
Ok then. So let’s look at some data points to fill in:

• In general terms, the labor market is cooling somewhat, but the slowing has been uneven. Some highly visible companies are laying off (3M = 2000; Google’s parent Alphabet= 12,000; Microsoft = 10,000; Goldman Sachs = 3200; Dow Chemical = 2000; Lam Research = 1300; Lyft = 700; Meta; Spotify = 600; Shutterfly = almost 100).  While others, Walmart and Chipotle among them, are investing in more employees and higher wages. And, again, small businesses are still hiring, protecting us from that feared recession.
• US GDP grew at a rate of 2.9% in Q4 2022, slightly ahead of expectations, and 2.1% for the year overall. For context: China finished 2022 at 3%, and Ireland, the world’s economic darling, finished 2022 at a ridiculous GDP growth of 11.3%.
• Consumer spending in Q4 2022 grew by 2.1%, a slight slowdown from Q3.
• The Fed is expected to raise interest rates this week by a quarter percentage point to a range between 4.5% and 4.75%, slowing increases for the second consecutive meeting.
• National unemployment rate fell to a seasonally adjusted 3.5% in December, matching the lowest reading in a half century.  Minnesota is at 2.5% for December.

 
Our issue in Minnesota? Simply and painfully put, we have a lot of jobs, but not enough workers. As it stands today, the U.S. Chamber’s Worker Shortage Index tells us that, in Minnesota, for every 100 open jobs, we have 43 workers.  We’ve got an aging population, and one of Minnesota’s most important sources of new workers, immigrants, largely was cut off by pandemic-related curbs on immigration.
 
Minnesota’s silver bullet? Welcoming more workers. To do so we absolutely are supporting policies and practices that attract workers from out of state and remove barriers to employment for those already here, such as affordable housing and childcare.
 
We also are investing where we can have great impact: our Career Connect Day for youth career exploration as well as adult job seekers; and our first Small Business Summit, to provide hands on resources and training to help our small businesses grow.
 
See you in the trenches.
B