by Cameron Macht and Brent Pearson
April 2013
From Education to Health Care to Public Safety, the government provides a wide range of services - and jobs - to residents in Southwest Minnesota. Through the first three quarters of 2012, there were 1,280 government establishments providing 30,567 covered jobs in the 23-county Southwest Minnesota planning region.
According to data from DEED's Quarterly Census of Employment and Wages (QCEW) program, public sector employment accounts for approximately 18 percent of total employment in the region, with the private sector supplying the other 82 percent of jobs. That is higher than in the state of Minnesota as a whole, where less than 14 percent of jobs are in the public sector (see Table 1).
| Industry Employment Statistics, Q1-Q3 2012 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Ownership Level | Region 6W | Region 8 | Region 9 | Southwest Region | Minnesota | |||||
| # of Firms | # of Firms | # of Firms | # of Firms | # of Firms | # of Firms | # of Firms | # of Firms | # of Firms | # of Firms | |
| Total, All Ownerships | 1,611 | 17,894 | 4,054 | 53,383 | 6,677 | 101,030 | 12,342 | 172,307 | 168,853 | 2,631,519 |
| Total Government | 212 | 4,955 | 459 | 10,041 | 609 | 15,571 | 1,280 | 30,567 | 8,324 | 363,904 |
| Federal Government | 60 | 237 | 123 | 523 | 130 | 959 | 313 | 1,719 | 1,822 | 31,598 |
| State Government | 39 | 154 | 99 | 1,256 | 132 | 3,591 | 270 | 5,001 | 2,079 | 74,473 |
| Local Government | 113 | 4,563 | 237 | 8,261 | 346 | 11,020 | 696 | 23,844 | 4,422 | 257,832 |
| Private Sector | 1,399 | 12,939 | 3,596 | 43,342 | 6,069 | 85,459 | 11,064 | 141,740 | 160,529 | 2,267,615 |
| Source: DEED Quarterly Census of Employment and Wages (QCEW) program | ||||||||||
Instead, government locations are more dispersed in Southwest Minnesota to provide services to residents spread across the region. Government establishments accounted for just over 10 percent of firms in Southwest Minnesota, almost double the number in the state. While there are more locations, they are smaller offices. In Southwest Minnesota these government establishments average 24 employees per site, compared to 44 employees per site in the state.
Region 6W, which includes Big Stone, Chippewa, Lac qui Parle, Swift, and Yellow Medicine Counties, had the highest percentage of government employment with more than one-fourth of total jobs in the public sector. Approximately 13 percent of firms and 27.7 percent of jobs were government. About 19 percent of the jobs in the nine counties in Region 8- Cottonwood, Jackson, Lincoln, Lyon, Murray, Nobles, Pipestone, Redwood, and Rock - were public sector, accounting for about one in every five jobs. The largest number of businesses and jobs were located in Region 9 - which encompasses Blue Earth, Brown, Faribault, Le Sueur, Martin, Nicollet, Sibley, Waseca, and Watonwan counties, as well as the Mankato-North Mankato Metropolitan Statistical Area - but it had the lowest concentration of government employment at 15.4 percent.
When reported to the QCEW program, government ownership falls into three levels: federal, state, and local. In Minnesota just over 70 percent of government employment is local, about 20 percent is state, and about 10 percent is federal. In comparison, only 5.5 percent of Southwest Minnesota's government jobs were federal and only 16.5 percent were state. The remaining 78 percent of government employment in the region was local.
Almost three-fourths of government employment is concentrated in two industries: Educational Services and Public Administration. Through the first three quarters of 2012 Educational Services provided 13,049 jobs at 183 government-run institutions, primarily elementary and secondary schools, but also colleges and universities. Public Administration - which includes executive, legislative, and general government; justice, public order, and safety activities, and administration of human resources, environmental quality, economic, and housing, urban planning, and community development programs - provided an average of 9,457 jobs at 736 government agencies (see Table 2).
| Table 2. Government Employment in Southwest Minnesota, Q1-Q3 2012 | ||||
|---|---|---|---|---|
| Number of Firms | Number of Jobs | Q1-Q3 2012 Total Payroll | Average Annual Wages | |
| Total, All Government | 1,279 | 30,568 | $851,076,479 | $37,123 |
| Educational Services | 183 | 13,049 | $365,571,071 | $37,354 |
| Health Care and Social Assistance | 39 | 4,654 | $138,633,759 | $39,715 |
| Arts, Entertainment, and Recreation | 14 | 432 | $8,236,576 | $25,441 |
| Accommodation and Food Services | 4 | 733 | $13,171,049 | $23,947 |
| Public Administration | 736 | 9,457 | $252,202,749 | $35,557 |
| Source: DEED Quarterly Census of Employment and Wages (QCEW) program | ||||
The third largest public sector industry is Health Care and Social Assistance, which averaged 4,654 jobs at 39 government establishments. That included 3,671 jobs at city, county, or state-owned hospitals, which was nearly half (44.2%) of total employment at hospitals in the region (8,305 total jobs). Southwest Minnesota also had a small, but notable, amount of government employment in the arts, entertainment, and recreation and in the accommodation and food services industries, primarily at the region's tribal casino resorts.
Contrary to popular opinion, government has consistently comprised a smaller percentage of total employment over the last decade. While the private sector gained almost 3,600 net new jobs from 2002 to 2008, the government sector added just 210 net new jobs. The overall economy grew 2.2 percent, while government employment increased just 0.7 percent. Instead, government employment in the region hovered between a low of 31,368 jobs in 2004 and a high of 31,735 jobs in 2008 (see Figure 1).
Since then, government employment has declined each year, dropping more than 1,100 jobs in the last four years. While total employment fell about 3 percent from the peak in 2008 to the recovery in 2012, government employment is still down almost 4 percent. Private sector employment bottomed out in 2010 and has seen slow but steady net job gains in the last two years. Government employment saw a smaller drop from 2008 to 2010, but has been sliced in response to tight budgets the last two years.
Those cuts were not uniform across all regions. Region 8 and Region 9 both lost government employment during the first year of the recession, stabilized in 2009 and 2010, then sank further in 2011 and 2012, with Region 8 suffering the biggest losses each year. In contrast, Region 6W actually added government jobs in the last two years, with steady gains in local government.
Even though government employment has been shrinking since the recession, some occupations are still in demand and offer competitive wages across the region. Based on DEED's Occupations in Demand (OID) data tool, jobs with a high concentration of government employment (at least 70 percent of total jobs) range in demand from low (one star) to high (five stars), depending on current job vacancies, unemployment insurance claims, and regional employment (see Table 3).
| Table 3. Southwest Minnesota Government Occupations in Demand, 2012 | |||||||
|---|---|---|---|---|---|---|---|
| Occupation | Demand (1-5 Stars) | Median Annual Salary | Education | ||||
| 6W | 8 | 9 | 6W | 8 | 9 | ||
| Social and Human Service Assistants | **** | ***** | ***** | $23,703 | $24,716 | $35,449 | High School or Equivalent |
| Teacher Assistants | ***** | **** | *** | $22,897 | $25,227 | $24,235 | High School or Equivalent |
| First-line Managers of Correctional Officers | ** | ** | $67,227 | $52,193 | n/a | High School or Equivalent | |
| First-line Managers of Police and Detectives | ** | ** | ** | $57,856 | $66,655 | $69,214 | High School or Equivalent |
| Correctional Officers and Jailers | * | **** | ***** | $40,458 | $34,527 | $44,993 | High School or Equivalent |
| Detectives and Criminal Investigators | * | ** | n/a | $67,492 | $58,421 | High School or Equivalent | |
| Police and Sheriff's Patrol Officers | ***** | ***** | **** | $37,194 | $44,143 | $49,941 | High School or Equivalent |
| Gaming Surveillance Officers | ** | ** | $29,874 | $29,874 | n/a | High School or Equivalent | |
| Court, Municipal, and License Clerks | ** | ** | ** | $48,227 | $45,617 | $41,357 | High School or Equivalent |
| Highway Maintenance Workers | * | * | * | $40,006 | $39,148 | $42,538 | High School or Equivalent |
| Water and Wastewater Treatment Plant and Systems Operators | *** | * | ** | $38,754 | $45,762 | $47,855 | High School or Equivalent |
| Police, Fire, Ambulance Dispatchers | ** | ** | ** | $44,291 | $39,585 | $40,549 | High School or Equivalent |
| Library Technicians | * | * | * | $29,654 | $28,739 | $36,077 | Postsecondary, Non-Degree |
| Firefighters | * | * | * | $29,101 | $27,675 | $28,442 | Postsecondary, Non-Degree |
| Civil Engineering Technicians | **** | ***** | **** | $57,757 | $55,309 | $54,667 | Associate's Degree |
| Eligibility Interviewers, Government Programs | ** | ** | ** | $46,121 | $41,522 | $38,496 | Associate's Degree |
| Tax Examiners and Collectors | **** | **** | **** | n/a | $52,984 | n/a | Bachelor's Degree |
| Zoologists and Wildlife Biologists | * | n/a | $54,804 | n/a | Bachelor's Degree | ||
| Conservation Scientists | *** | *** | ** | $66,465 | $74,979 | $56,918 | Bachelor's Degree |
| Environmental Scientists | *** | *** | $59,178 | $58,629 | Bachelor's Degree | ||
| Child, Family, and School Social Workers | **** | ***** | ***** | $44,627 | $46,338 | $49,616 | Bachelor's Degree |
| Probation Officers and Correctional Treatment Specialists | *** | *** | $65,287 | $65,287 | n/a | Bachelor's Degree | |
| Kindergarten Teachers | * | * | * | $47,803 | $50,543 | $44,343 | Bachelor's Degree |
| Elementary School Teachers | ***** | ***** | * | $50,651 | $46,983 | $50,290 | Bachelor's Degree |
| Middle School Teachers | ** | ** | * | $50,707 | $43,890 | $47,323 | Bachelor's Degree |
| Secondary School Teachers | * | ** | * | $50,792 | $51,460 | $49,739 | Bachelor's Degree |
| Special Education Teachers | ** | ** | ** | $48,730 | $50,196 | $49,096 | Bachelor's Degree |
| Education Administrators | ** | ** | ** | $82,541 | $80,878 | $88,367 | Master's Degree |
| Postsecondary Vocational . Education Teachers | **** | ** | n/a | $52,638 | $64,878 | Master's Degree | |
| Librarians | * | * | * | $50,786 | $53,798 | $44,589 | Master's Degree |
|
Source: Minnesota Department of Employment and Economic Development Occupations in Demand (OID) tool n/a = Salary data not available |
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Not surprisingly, many of the occupations that were in the highest demand were in the Educational and Health Services and the Justice, Public Order, and Safety sectors. For example, social and human service assistants were in high demand in all three regions, although wages were relatively low. Likewise, police and sheriff's patrol officers, civil engineering technicians, tax examiners, and social workers were also in high demand across the region, but offered much higher wages.
Most of those occupations require postsecondary education or training, leading to higher salaries and lower unemployment rates. Of the top 30 government occupations, just 12 required a high school education or equivalency, while the other 18 required postsecondary education, including 14 that required a bachelor's degree or higher.
According to DEED's Quarterly Workforce Indicators program, less than 5 percent of jobs in the public sector are held by workers with less than a high school diploma, which is half the amount in the private sector (9.9%). In contrast, more than one-third of workers in the public sector had a bachelor's degree or higher (33.9%), compared to just one-fifth of workers in the private sector. In sum, almost 70 percent of jobs in the public sector were held by workers with some college, an associate degree, a bachelor's degree, or higher (see Figure 2).
The public sector workforce also has more older workers and fewer younger workers. In 2012 just over half (50.1%) of the public sector workforce in the region was 45 to 64 years of age, compared to 37 percent in the private sector. Almost 24 percent of public sector workers were 55 to 64 years of age, meaning one-fourth of the workforce is within 10 years of retirement age, although not all will retire, as demonstrated by the 6 percent of the government workforce that is already 65 years and older.
In contrast, only one-fourth of public sector workers are in the early stages of their careers, with 17.5 percent aged 25 to 34 years and less than 7 percent under 24 years of age. In comparison, almost 40 percent of private sector workers are in the youngest age groups, including 19 percent that are 14 to 24 years of age (see Table 4).
Southwest Minnesota Planning Region Total, All Ownerships| Table 4. Southwest Minnesota Workforce Demographics, 2012 | ||||||
|---|---|---|---|---|---|---|
| Percent | Private Sector | Percent | Public Sector | Percent | ||
| Total Workforce | 181,814 | 100% | 151,506 | 100% | 30,308 | 100% |
| 14-24 years | 31,348 | 17.2% | 29,278 | 19.3% | 2,070 | 6.8% |
| 25-34 years | 37,893 | 20.8% | 32,600 | 21.5% | 5,293 | 17.5% |
| 35-44 years | 31,903 | 17.5% | 25,926 | 17.1% | 5,977 | 19.7% |
| 45-54 years | 40,473 | 22.3% | 32,499 | 21.5% | 7,974 | 26.3% |
| 55-64 years | 30,781 | 16.9% | 23,574 | 15.6% | 7,207 | 23.8% |
| 65 years and over | 9,412 | 5.2% | 7,622 | 5.0% | 1,790 | 5.9% |
| Male | 86,794 | 47.7% | 75,923 | 50.1% | 10,871 | 35.9% |
| Female | 95,018 | 52.3% | 75,582 | 49.9% | 19,436 | 64.1% |
| Source: DEED LEHD Quarterly Workforce Indicators (QWI) program | ||||||
Still struggling with the impact of the Great Recession, Southwest Minnesota government is expected to lose about 550 jobs from 2010 to 2020 according to DEED's Employment Outlook tool. That includes declines in both federal and local government but a small increase in state government.
While local elementary and secondary schools will likely continue to cut back on staff, jobs in state colleges and universities in the region are expected to increase slightly. State and local hospitals are also expected to see measured job gains - about 3.5 to 5 percent - in the region, but pale in comparison to the almost 20 percent expansion expected at privately-owned hospitals.
In some instances the lower availability of government services conflicts with the higher value placed on them. For example, fires still need to be fought, yet communities have fewer dollars to pay firefighters after cuts to local government aid, less money in reserves, and lower tax bases. Instead, tight government budgets may compel volunteers to fill roles previously held by government-paid employees. As the data above shows there aren't many job openings for paid firefighters in the region, but many communities run volunteer fire departments.
The data show that government jobs are decreasing in the post-recessionary economy, and they aren't expected to grow in the long term either. But even with government employment shrinking, a need for services is still in place, and the remaining workforce must continue to do more with less. All levels of government will need to adapt and find new ways to provide much needed services and jobs to Southwest Minnesota.
