by James Spector-Bishop
james.spector-bishop@state.mn.us
December 2019
Agriculture holds a cultural importance here in Minnesota as well as in NAICS 333, and although it makes up a fairly small portion of the economy, Minnesota is still the 5th most agriculturally productive state according to the USDA. However, Minnesota's agriculture could not operate without the tools provided by the Agricultural Implement Manufacturing industry. The Census Bureau defines this industry as consisting of, "establishments primarily engaged in manufacturing farm machinery and equipment, powered mowing equipment, and other powered home lawn and garden equipment." This useful and entirely privately owned industry was comprised of 105 establishments and supported 4,009 jobs, with an average of 38 jobs per establishment as of Quarter 2, 2019. It was also reasonably well paying, with an average weekly wage of $1,099.
The industry is mostly comprised of Farm Machinery and Equipment Manufacturing (333111), which made up 71% of the jobs and 88.6% of the establishments as of Q2, 2019. The remainder of the industry consists of Lawn and Garden Tractor and Home Lawn and Garden Equipment Manufacturing (333112). The later subindustry tends to have larger facilities, with an average of approximately 96 employees per establishment. In comparison, Farm Machinery and Equipment Manufacturing has an average of only about 31 employees per establishment. Over the past few years, average wages have tended to be pretty similar between these two subindustries, though they are often slightly higher in Lawn and Garden Tractor and Home Lawn and Garden Equipment Manufacturing.
Since the second quarter of 2016, the number of establishments and jobs have changed little in Agricultural Implement Manufacturing, and the same can be said of its subindustries. This can be seen in the table below. Wages, however, are another story. Between Q2 2016 and Q2 2019, industry wages grew by a total of 15.3%, while wages in farm machinery manufacturing and garden equipment manufacturing grew by 17.4% and 10% respectively. This greatly exceeds the rate of inflation, which was approximately 4.7% over this time period, indicating that workers are seeing real increases in their take-home pay.
| Sub-Industry | Quarter 2, 2019 | Percent Change Since Q2, 2016 | ||||
|---|---|---|---|---|---|---|
| Employment | Establishments | Average Weekly Wages | Employment | Establishments | Average Weekly Wages | |
| Agricultural Implement Manufacturing NAICS 33311 | 4,009 | 105 | $1,099 | -2.4% | -0.9% | 15.3% |
| Farm Machinery and Equipment Manufacturing NAICS 333111 | 2,858 | 93 | $1,091 | -3.7% | -1.1% | 17.4% |
| Lawn and Garden Tractor and Home Lawn and Garden Equipment Manufacturing NAICS 333112 | 1,151 | 12 | $1,120 | 1.1% | 0.0% | 10.0% |
According to the Census Bureau establishments in this subsector manufacture leather and leather substitutes, and fabricate these into final products. Examples of leather substitutes include "rubber plastics, or textiles" used in products such as "rubber footwear, textile luggage, and plastics purses or wallets", but would exclude apparel. Leather and Allied Product Manufacturing is a small, growing, and entirely privately owned sector, with 1,193 jobs in 21 establishments or about 57 jobs per establishment as of Q2 2019. It is a moderately well-paying industry, with an average weekly wage of $1,068 in 2018.
The industry has only one subdivision: Leather and Hide Tanning and Finishing (3161), which in Q2 2019 had 295 jobs and four establishments, collectively making up less than a quarter of the leather industry in Minnesota. The number of establishments in this subindustry has not changed since before 2016.
Leather and Allied Product Manufacturing has grown significantly in the past few years. As can be seen in the table below, between Q2 of 2016 and Q2 of 2019, the number of establishments in Minnesota has grown 10.5% (though this is a change of only two additional establishments) while employment has grown 8.6%. By comparison, the scale of the tanning subindustry has changed little over this time period. The most dramatic growth has been in average weekly wages, which more than doubled for Leather and Allied Product Manufacturing. This is primary caused, however, by establishments being reclassified in the first half of 2019 and does not represent a real economic change in the industry. Weekly wages also increased by 27.9% for Leather and Hide Tanning and Finishing, although it should be noted that these wages have increased and decreased several times over the last few years. Both of these pay increases far outstrip the total cumulative inflation rate between Q2 of 2016 and Q2 of 2019, which was about 4.7% for urban or clerical workers in the Midwest.
| Sub-Industry | Quarter 2, 2019 | Percent Change since Q2, 2016 | ||||
|---|---|---|---|---|---|---|
| Employment | Establishments | Average Weekly Wages | Employment | Establishments | Average Weekly Wages | |
| Leather and Allied Product Manufacturing NAICS 316 | 1,193 | 21 | $1,672 | 8.6% | 10.5% | 101.0% |
| Leather and Hide Tanning and Finishing NAICS 3161 | 295 | 4 | $1,151 | -4.2% | 0.0% | 27.9% |
In addition to discussing trends in the major industries, it is also important to draw attention to parts of the economy that are less well known. One such sectors is Lessors of Nonfinancial Intangible Assets (except Copyrighted Works). Although its name isn't very instructive about what it involves, "Industries in the Lessors of Nonfinancial Intangible Assets (except Copyrighted Works) subsector include establishments primarily engaged in assigning rights to assets, such as patents, trademarks, brand names, and/or franchise agreements, for which a royalty payment or licensing fee is paid to the asset holder. Establishments in this subsector own the patents, trademarks, and/or franchise agreements that they allow others to use or reproduce for a fee and may or may not have created those assets." (The definition isn't very instructive either.) This industry is small and exclusively privately owned. With 758 jobs and 86 establishments in Minnesota in Q2 2019, it tends to have a small number of employees per establishment. It tends to be pretty high paying, with an average weekly wage of $1,801, which translates to an annual income of over $93,000 a year.
| - | Employment | Establishments | Average Employees per Establishment | Average Weekly Wages |
|---|---|---|---|---|
| % change from Q2 2016 to Q2 2019 | -16.1% | 14.7% | -26.8% | 7.1% |
| Q2 2019 | 758 | 86 | 8.8 | $1,801 |
| Q2 2018 | 865 | 78 | 11.1 | $1,776 |
| Q2 2017 | 878 | 75 | 11.7 | $1,851 |
| Q2 2016 | 903 | 75 | 12.0 | $1,681 |
As can be seen in the graph below, employment in this industry in Minnesota has declined in recent years. In spite of this, the number of establishments has paradoxically grown by 14.7% while average wages have grown by 7.1%, which is a few points more than inflation for the Midwest.
Firms in every industry of Minnesota's economy need to be managed in some form. However, the managing of businesses and other organizations can be thought of an industry in and of itself, and Management of Companies and Enterprises represents just this. The Census Bureau defines this as, "Industries in the Management of Companies and Enterprises subsector include three main types of establishments: (1) those that hold the securities of (or other equity interests in) companies and enterprises; (2) those (except government establishments) that administer, oversee, and manage other establishments of the company or enterprise but do not hold the securities of these establishments; and (3) those that both administer, oversee, and manage other establishments of the company or enterprise and hold the securities of (or other equity interests in) these establishments. Those establishments that administer, oversee, and manage normally undertake the strategic or organizational planning and decision-making role of the company or enterprise." This private industry is large, with 1,585 establishments. Its 89,359 jobs represent almost 3% of all employment in Minnesota. It is also very high paying, with an average weekly pay of $2,564. However, it should be noted that pay appears to experience a great deal of seasonality, being at least 20% higher in Quarter 1 than it is during the rest of the year. This may also be when most bonuses are paid in this industry.
Although it has three sub-industries, almost 98% of the industry's employment and about 85% of its establishments can be found in just one of them, Corporate, Subsidiary, and Regional Managing Offices (551114). This sub-industry consists of establishments of type 2 in the definition given above.
The industry has experienced significant growth in recent years, expanding employment and establishments by 13.9% and 18.3% respectively between Q2 2016 and Q2 2019. This is mostly caused, however, by non-economic reclassification of establishments which occurred in the first quarter of 2019. All the change in employment, and most of the change in establishments is attributable to Corporate, Subsidiary, and Regional Managing Offices. Employment in Offices of Bank Holding Companies (551111) in Minnesota has declined by more than a third over this timespan. Wages in the industry have also increased significantly during this time. However, as mentioned previously, wages in this industry go up and down a great deal from quarter to quarter, and comparing the yearly averages between 2015 and 2018 shows only an approximately 5% increase in average weekly pay, which is close to the cumulative rate of inflation over this time period.
| - | Quarter 2, 2019 | Percent Change since Q2, 2016 | ||||
|---|---|---|---|---|---|---|
| Employment | Establishments | Average Weekly Wages | Employment | Establishments | Average Weekly Wages | |
| Management of Companies and Enterprises (551) | 89,359 | 1,585 | $2,564 | 13.9% | 18.3% | 18.2% |
| Offices of Bank Holding Companies (551111) | 268 | 22 | $2,677 | -33.8% | -21.4% | 28.2% |
| Offices of Other Holding Companies (551112) | 1,678 | 216 | $2,374 | -0.1% | 20.0% | 1.3% |
| Corporate, Subsidiary, and Regional Managing Offices (551114) | 87,412 | 1,347 | $2,567 | 14.5% | 19.0% | 18.5% |
