by Rachel Vilsack and Brent Pearson
February 2014
Southeast Minnesota has the second-highest median wage of any economic development region statewide according to Occupational Employment Statistics (OES) estimates. With an abundance of high-paying health care occupations, the region had a median hourly wage of $16.94 per hour ranking behind only the Twin Cities Metro region at $19.82. This article will address a two-part question: What are the regions' distinguishing occupations and is the workforce compensated well for these occupations?
Location quotients, generally used to analyze industry concentration, can help identify highly concentrated occupations in Southeast Minnesota. An analysis of median hourly wages paid to Southeast Minnesota occupations will determine whether the workforce is well compensated. Finally, we'll look at how these regionally significant occupations in Southeast Minnesota compare to the state.
Location quotients (LQ) are calculated to determine the concentration of each occupation in Southeast Minnesota compared to the concentration of each occupation statewide and nationally. An example:
There are an estimated 380 occupational therapists in Southeast Minnesota and 237,490 total estimated jobs in the region. At the national level, there are an estimated 105,540 occupational therapists and 130,287,700 total jobs. The region's LQ would be:
A one-to-one relationship, or an LQ of 1.0, means that the occupation is equally concentrated in the region and the state or nation. In the example above, the concentration of occupational therapists in Southeast Minnesota is just about equal to the national concentration of jobs for this occupation. A ratio of one to two, or an LQ of 0.5, means that the occupation is only half as concentrated in the region as in the state or nation. A ratio of two to one, or an LQ of 2, means that the occupation is twice as concentrated in the region as in the state or nation.
Typically, a location quotient of 1.2 or higher is considered distinguishing and more than meeting local demand. Future growth in that occupation or industry could indicate a significant export of goods or services from the region. Anything less than 1:1 may be an opportunity for growth. Of course, some occupations with high LQs may not present an opportunity for growth. Blacksmiths would be an example; the occupation may be highly concentrated in Southeast Minnesota, but it is extremely small and not likely to grow in any significant way.
Table 1 lists the top 20 occupations with the highest location quotients. First place goes to fiberglass laminators and fabricators, an occupation that is 54 times more concentrated in Southeast Minnesota than in the nation. Other highly concentrated occupations - particularly related to food manufacturing and health care - show the significance of these industries on the region as well.
| Southeast Minnesota Occupation with Highest Location Quotients | |||
|---|---|---|---|
| Southeast MN (EDR 10) | SE/U.S. | ||
| Occupation | Estimated Employment | Median Hourly Wage | Location Quotient |
| Total, All Occupations | 237,490 | $16.94 | 1.00 |
| Fiberglass Laminators and Fabricators | 1,730 | $14.33 | 53.99 |
| Fabric and Apparel Patternmakers | 400 | $10.84 | 33.76 |
| Slaughterers and Meat Packers | 4,640 | $12.92 | 32.07 |
| Life Scientists, All Other | 290 | $28.23 | 17.80 |
| Gaming Change Persons and Booth Cashiers | 440 | $9.39 | 10.99 |
| Medical Equipment Preparers | 660 | $18.02 | 7.21 |
| Agricultural Workers, All Other | 70 | $11.07 | 6.85 |
| Religious Workers, All Other | 100 | $11.05 | 6.76 |
| Model Makers, Metal and Plastic | 70 | $23.75 | 6.74 |
| Healthcare Support Workers, All Other | 1,150 | $18.37 | 6.07 |
| Biomedical Engineers | 160 | $46.54 | 4.67 |
| Industrial Engineering Technicians | 570 | $20.45 | 4.64 |
| Farm Equipment Mechanics | 280 | $17.67 | 4.50 |
| Medical Transcriptionists | 590 | $19.90 | 4.33 |
| Medical Equipment Repairers | 270 | $24.26 | 4.14 |
| Athletic Trainers | 140 | n/a | 3.70 |
| Medical and Clinical Laboratory Technologists | 1,080 | $30.09 | 3.69 |
| Nurse Practitioners | 700 | $46.63 | 3.63 |
| Stationary Engineers and Boiler Operators | 230 | $25.82 | 3.47 |
| Cleaning, Washing, and Metal Pickling Equipment Operators and Tenders | 100 | $13.92 | 3.42 |
| Source: DEED, Labor Market Information Office, Occupational Employment Statistics. | |||
Southeast Minnesota has a number of occupations that are highly concentrated in the region. These jobs also tend to pay well; 12 out of the 20 occupations listed in Table 1 pay above the regional median wage of $16.94 per hour. However, the 13,670 estimated jobs in these 20 occupations represent only 5.8 percent of all estimated employment in Southeast Minnesota.
Expanding the analysis to all 560 jobs with disclosable employment and wages in Southeast Minnesota presents a more complete picture of regionally significant occupations. About 30 percent of jobs in Southeast Minnesota had a location quotient exceeding 1.2, considered a regionally significant occupation in this analysis. Those occupations accounted for a combined 107,540 jobs, or 45.2 percent of total employment in Southeast Minnesota.
Among these regionally significant occupations, more than half (57.3 percent) paid a median hourly wage above the region's average of $16.94 and the nation's average of $17.03. Fewer than half (48.8 percent) of the regionally significant occupations had a wage that exceeded the statewide median hourly wage ($18.08), and four out of 10 paid an median wage higher than $19.82, the median hourly wage for all jobs in the Twin Cities region.
To this point we've calculated the regionally significant occupations against the nation. To see how these regionally significant occupations compare to the state, we can compute new LQs using Minnesota as the comparison point for only those occupations with an LQ above 1.2 and a median hourly wage rate higher than the region's average.
Table 2 lists 18 regionally significant occupations in Southeast Minnesota that also have a statewide significance, or occupation whose statewide employment concentration exceeded the national employment concentration. In other words, these 18 occupations contributed significantly more to Southeast Minnesota much closer to home (statewide) than nationally. Not surprisingly, nearly all of these occupations were in health care.
All these indicators - a high concentration of regionally significant occupations with higher than average wages and large percentages of employment compared to the state and nation - suggest that Southeast Minnesota benefits from its concentration of jobs in manufacturing and health care, both high wage sectors of the economy.
| Minnesota Significance | ||||||
|---|---|---|---|---|---|---|
| Southeast EDR 10 | Location Quotients | LQ Difference | ||||
| SOC | SOC Title | Estimated Employment | Median Hourly Wage | SE/MN | SE/ U.S. | |
| 515113 | Metal-Refining Furnace Operators and Tenders | 50 | $17.37 | 4.28 | 1.34 | 2.94 |
| 512023 | Biological Technicians | 320 | $33.87 | 3.33 | 2.41 | 0.92 |
| 537064 | Police, Fire, and Ambulance Dispatchers | 320 | $20.67 | 2.66 | 1.84 | 0.82 |
| 291128 | Medical Secretaries | 1,830 | $19.47 | 2.70 | 1.97 | 0.73 |
| 299091 | Nuclear Medicine Technologists | 80 | $40.62 | 2.87 | 2.14 | 0.73 |
| 519111 | Psychologists, All Other | 50 | $25.00 | 3.27 | 2.65 | 0.62 |
| 519022 | Respiratory Therapists | 270 | $31.99 | 1.87 | 1.27 | 0.60 |
| 272041 | Health Technologists and Technicians, All Other | 500 | $29.45 | 3.76 | 3.25 | 0.51 |
| 452091 | Cardiovascular Technologists and Technicians | 210 | $25.11 | 2.57 | 2.28 | 0.29 |
| 514012 | Separating, Filtering, Clarifying, Precipitating, and Still Machine Setters, Operators, and Tenders | 130 | $18.52 | 1.98 | 1.72 | 0.26 |
| 514023 | Surgical Technologists | 290 | $26.62 | 1.82 | 1.64 | 0.18 |
| 514032 | Library Technicians | 300 | $19.16 | 1.79 | 1.64 | 0.15 |
| 519032 | Medical Records and Health Information Technicians | 430 | $21.65 | 1.41 | 1.29 | 0.12 |
| 516092 | Physician Assistants | 300 | $52.17 | 2.06 | 1.97 | 0.09 |
| 393012 | Recreational Therapists | 50 | $22.07 | 1.50 | 1.43 | 0.07 |
| 514122 | Radiologic Technologists and Technicians | 570 | $32.91 | 1.68 | 1.61 | 0.07 |
| 412012 | Medical and Health Services Managers | 650 | $48.09 | 1.23 | 1.22 | 0.01 |
| 131131 | Medical and Clinical Laboratory Technicians | 380 | $22.05 | 1.32 | 1.32 | 0.00 |
| Source: DEED Labor Market Information Office, Occupational Employment Statistics. | ||||||
1Of 560 occupations in Southeast Minnesota, 166 had a LQ of 1.2 or above.
2Specifically 95 out of 166 regionally significant occupations had a median hourly wage above the region's average.
