By Erik White
April 2021
What makes Northwest Minnesota unique? The land of two Paul Bunyan statues or the headwaters of the Mississippi River might be the answer for some, but I will argue that it's how important the Educational Services industry is in the region. Home to multiple universities and colleges, numerous technical trade schools, and even three of the four tribal colleges in the state, post-secondary education institutions populate the region. Local government-controlled Elementary and Secondary Schools make up most of the employment in this billion-dollar wage providing industry which was greatly impacted by COVID-19 but looks to rebound from employment losses and delivery disruption.
One technique to determine a region's economic specialty is that of location quotients. An analytical statistic that measures a region's industrial specialization relative to a larger geographic unit, a location quotient can show how concentrated an industry is. When we look at Educational Services across the state, Northwest Minnesota stands head and shoulders above the rest of the regions with a location quotient of 1.24. A score greater than 1.00 indicates an industry that is more concentrated in the region than it is for the state, therefore the region specializes in it. The location quotient for Educational Services in Northwest Minnesota is considerably greater than any other region.
| Northwest Minnesota | 1.24 |
| Central Minnesota | 1.07 |
| Northeast Minnesota | 1.06 |
| Seven County Mpls-St Paul, MN | 0.97 |
| Southeast Minnesota | 0.99 |
| Southwest Minnesota | 1.11 |
| Source: DEED's Quarterly Census of Employment and Wages (QCEW) | |
Another comparison of location quotient shows how the Educational Services industry ranks in concentration of employment by industries in Northwest Minnesota. With a score of 1.24, Educational Services is the fifth most concentrated industry in Northwest Minnesota. While it shouldn't come as a surprise that Agriculture, Forestry, Fishing, and Hunting is the most concentrated sector when compared to statewide employment within that sector, Public Administration, Accommodation and Food Services, and Retail Trade also had greater location quotients than Educational Services. Meanwhile, 10 of 20 industry sectors recorded location quotients greater than 1.00, indicating a specialized sector in the region.
| Total, All Industries | 1.00 |
| Agriculture, Forestry, Fishing, and Hunting | 2.97 |
| Public Administration | 1.56 |
| Accommodation and Food Services | 1.29 |
| Retail Trade | 1.25 |
| Educational Services | 1.24 |
| Utilities | 1.21 |
| Manufacturing | 1.16 |
| Construction | 1.13 |
| Wholesale Trade | 1.13 |
| Health Care and Social Assistance | 1.01 |
| Other Services (except Public Administration) | 0.97 |
| Arts, Entertainment, and Recreation | 0.96 |
| Transportation and Warehousing | 0.74 |
| Information | 0.67 |
| Real Estate and Rental and Leasing | 0.57 |
| Finance and Insurance | 0.52 |
| Mining | 0.51 |
| Administrative and Support and Waste Management and Remediation Services | 0.40 |
| Professional, Scientific, and Technical Services | 0.38 |
| Management of Companies and Enterprises | 0.10 |
| Source: DEED's Quarterly Census of Employment and Wages (QCEW) | |
The Quarterly Census of Employment and Wages data tool breaks down the Educational Services by level of ownership. The majority of employment In education occurs through local governments in Northwest Minnesota as there are 272 establishments that employ 15,741 people or 75% of all employment in the sector. Next are 17 state-owned Educational Services establishments in the region with 3,067 jobs. Average annual wages, however, are $64,324 for this ownership group as many, if not all, establishments are post-secondary education institutions, and wages are typically higher for professors than they are for teachers. Private Educational Services employs 2,240 people in the region, but average annual wages are over $12,000 less than the total for all Educational Services (Table 2).
| Ownership | Number of Employees | Number of Establishments | Total Wages | Avg. Annual Wage | 2019-2020 Change | 2015-2020 Change | ||
|---|---|---|---|---|---|---|---|---|
| Number | Percent | Number | Percent | |||||
| Total, All Ownerships | 21,048 | 384 | $1,000,151,769 | $47,840 | 1,635 | 7.2% | 405 | 1.9% |
| Total Government | 18,808 | 289 | $921,659,481 | $49,296 | 1,241 | 6.2% | 523 | 2.7% |
| State Government | 3,067 | 17 | $196,811,951 | $64,324 | 65 | 2.1% | 276 | 8.3% |
| Local Government | 15,741 | 272 | $724,847,530 | $46,332 | 1,175 | 6.9% | 246 | 1.5% |
| Private | 2,240 | 95 | $78,492,288 | $35,360 | 394 | 5.0% | 118 | 5.6% |
| Source: DEED's Quarterly Census of Employment and Wages (QCEW) | ||||||||
Another way QCEW can categorize the Educational Services industry is through North American Industry Classification System or NAICS code (pronounced so it rhymes with SNAKES). At the 4-digit level, Elementary and Secondary Schools make up the lion share of employment in the 2-digit level Educational Services industry with 15,853 jobs, a similar amount that is categorized as Local Government employment. State government ownership corresponds to the 4-digit (6113) Colleges, Universities, and Professional Schools, and higher average annual wages than the total for all Educational Services. Other Schools and Instruction have 47 firms in the region and offers 676 jobs. However, the $25,896 average annual wage for this subsector is about $22,000 less than it is for the whole industry of Educational Services in the region and more than $41,000 lower than the highest paying subsector, Educational Support Services, which has 367 jobs in the region.
| NAICS Code | Industry Title | 2020 Annual Average | 2019-2020 Change | |||
|---|---|---|---|---|---|---|
| Number of Employees | Number of Firms | Avg. Annual Wage | Number | Percent | ||
| 61 | Educational Services | 21,048 | 384 | $47,840 | 1,635 | 7.2% |
| 6111 | Elementary and Secondary Schools | 15,853 | 291 | $45,448 | 994 | 5.9% |
| 6113 | Colleges, Universities, and Professional Schools | 2,923 | 12 | $56,888 | 286 | 8.9% |
| 6114 | Business Schools and Computer and Mgmt Training | 14 | 4 | $28,808 | 1 | 6.7% |
| 6116 | Other Schools and Instruction | 676 | 47 | $25,896 | 271 | -8.6% |
| 6117 | Educational Support Services | 367 | 13 | $67,600 | 25 | 6.4% |
| Source: DEED's Quarterly Census of Employment and Wages (QCEW) | ||||||
At all levels of ownership in the Educational Services industry the overall trend is that this sector was significantly impacted by the COVID-19 pandemic. Annual average employment in 2020 dropped by 7.2% with the loss of 1,635 jobs from the 2019 annual average estimates. Elementary and Secondary Schools experienced the greatest drop in jobs with nearly 1,000 lost in the region while Other Schools and Instruction lost more than a quarter of its employment with a 271 job decrease over the year. Even Colleges, Universities, and Professional Schools were not immune to job losses with a nearly 9% reduction in employment or a loss of 286 jobs.
Prior to the pandemic, the employment trend for the Northeast Minnesota Educational Services sector was increasing. From 2001 until 2015, employment hovered between 21,000 and 21,500 but increased by 1,230 jobs from 2016 to 2019, a 5.7% increase. Employment plateaued at 22,683 in 2019 before the losses caused by the pandemic in 2020 (Figure 1).
The pandemic impacted the day-to-day service of education as schools participated in distance and hybrid models of learning. Unemployment insurance applications show which education occupations were most impacted and how the impacts were not evenly distributed amongst them. Postsecondary Teachers had only 65 UI applications compared to 871 Preschool, Primary, Secondary and Special Education Teachers indicating that post-secondary institutions in the region were better insulated from job losses. However, Other Teachers and Instructors and Other Education, Training and Library Occupations had 1,833 UI applications and indicate that more than just students and teachers in Educational Services were impacted by the effects of COVID-19.
| Occupation | UI Applications |
|---|---|
| Postsecondary Teachers | 65 |
| Preschool, Primary, Secondary and Special Education Teachers | 871 |
| Other Teachers and Instructors | 354 |
| Other Education, Training and Library Occupations | 1,479 |
| Source: DEED's Unemployment Insurance Application Data Tool | |
"Return to normal" has been a common mantra as we combat the impacts of COVID-19, and it might be best applied to the Educational Services industry. Not only is returning students to the classroom a priority, but many of those who support the education endeavor are looking to come back as well. The sooner the better for the well-being of this important industry in Northwest Minnesota.
Education is a powerful tool that can transform individuals and communities, and Northwest Minnesota can take pride in the fact that it specializes in this industry. With great power, however, comes greater responsibility, so it's time to concentrate on seeing that everyone gets to participate in the pursuit of education. The Red Lake Tribal Council made history in 2017 by declaring a resolution that supports a 100% graduation rate for all Red Lake youth. A local initiative has been built around this premise for all students in Beltrami county called "Project Graduate 100%." A return to normal is a good place to start, but at the same time, work remains to connect people to the ample education opportunities in the region that can create meaningful experiences and provide knowledge, skills, and abilities that will help the region's students navigate life.
