by Mark Schultz
February 2017
Meeting the monetary threshold to afford the basic cost of living needs is not always easy, especially when it comes to the high price tags on things such as housing, food, and transportation. Southeast Minnesota is no different than other areas in the state when it comes to those financial realities.
As seen in Table 1, a two-parent household with one child and one parent working full-time while the other works part-time needs to make an annual wage of $48,828 in order to meet these basic cost of living needs in Southeast Minnesota. There is, of course, variation when looking at this at the county level.
In theory the highest annual cost would be for those living in Olmsted County, the center of the Rochester Metropolitan Statistical Area. However, the highest cost of living is surprisingly found in Rice County. In fact, Olmsted County ranks fourth highest in the Southeast Region, behind Rice, Goodhue, and Dodge counties.
| Table 1. Cost of Living by County, Southeast Minnesota | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Area | Yearly Cost | Hourly Wage | Child Care | Food | Health Care | Housing | Transportation | Other | Taxes |
| Southeast Minnesota | $48,828 | $15.65 | $280 | $760 | $408 | $817 | $762 | $493 | $549 |
| Rice | $52,762 | $16.91 | $280 | $754 | $408 | $910 | $883 | $521 | $641 |
| Goodhue | $51,465 | $16.50 | $344 | $757 | $408 | $783 | $897 | $482 | $618 |
| Dodge | $51,303 | $16.44 | $255 | $752 | $408 | $909 | $821 | $520 | $610 |
| Olmsted | $50,078 | $16.05 | $335 | $764 | $408 | $909 | $657 | $523 | $577 |
| Houston | $48,110 | $15.42 | $223 | $761 | $408 | $829 | $760 | $497 | $531 |
| Fillmore | $47,746 | $15.30 | $215 | $758 | $408 | $659 | $966 | $444 | $529 |
| Steele | $46,456 | $14.89 | $225 | $761 | $408 | $773 | $732 | $480 | $492 |
| Wabasha | $46,449 | $14.89 | $265 | $755 | $408 | $694 | $801 | $453 | $495 |
| Mower | $45,502 | $14.58 | $225 | $761 | $408 | $736 | $725 | $469 | $468 |
| Winona | $45,237 | $14.50 | $238 | $759 | $408 | $721 | $719 | $463 | $462 |
| Freeborn | $44,413 | $14.23 | $224 | $761 | $408 | $659 | $760 | $445 | $444 |
| Source: DEED Cost of Living | |||||||||
Within the region as a whole, housing is the most expensive cost of living need, followed by transportation and food. While the data in Table 1 show that child care is relatively modest in cost, this is because of the assumption that the parent that is working part-time cares for the child(ren) when not at work, thus decreasing the need for full-time child care. The cost of child care almost doubles in the region when both parents are working full-time.
However, even as child care costs increase, the average hourly wage each parent needs to earn drops from $15.65 per hour to $12.83 because of the additional earnings from another 20 hours of work per week. DEED's Cost of Living database calculates results for 24 different family compositions, ranging from a single person working part-time to a partnered household with four or more children having both partners working full-time. It is worth noting that wage needs vary depending on the composition and work status of the family members (see Table 2).
| Table 2. Cost of Living With One Child, Southeast Minnesota | ||
|---|---|---|
| Family Composition | Annual Cost | Hourly Wage |
| Single | $43,404 | $20.87 |
| Partnered - 1 Full-Time Worker | $42,732 | $20.54 |
| Partnered - 1 Full-Time, One Part-Time Worker | $48,828 | $15.65 |
| Partnered - 2 Full-Time Workers | $53,388 | $12.83 |
| Source: DEED Cost of Living | ||
As seen in Table 3, the median hourly wage across nearly all occupations is greater than needed to meet the basic cost of living needs for a typical family in the Southeast region. In fact, when we break it down by occupational group, only seven of the 22 categories — healthcare support, food preparation and serving related, building and grounds cleaning and maintenance, personal care and service, sales and related, farming, fishing and forestry, and transportation and material moving occupation — have median wages that do not meet the cost of living hourly wage needed. Additionally, there are some occupational groups whose median hourly wage greatly exceeds the $15.65 needed, including management ($42.07), computer and mathematical ($39.39), and architecture and engineering occupations ($33.34).
| Table 3. Occupational Employment Statistics, Southeast Minnesota | |||
|---|---|---|---|
| Occupational Title | Employment | 10th Percentile Hourly Wage | Median Hourly Wage |
| Total, All Occupations | 228,960 | $9.28 | $17.77 |
| Management Occupations | 11,080 | $21.79 | $42.07 |
| Business and Financial Operations Occupations | 7,700 | $16.94 | $27.23 |
| Computer and Mathematical Occupations | 6,210 | $21.60 | $39.39 |
| Architecture and Engineering Occupations | 3,200 | $19.62 | $33.34 |
| Life, Physical, and Social Science Occupations | 2,130 | $18.94 | $28.37 |
| Community and Social Services Occupations | 4,440 | $12.13 | $21.48 |
| Legal Occupations | 740 | $17.04 | $28.98 |
| Education, Training, and Library Occupations | 14,410 | $11.29 | $22.72 |
| Arts, Design, Entertainment, Sports, and Media Occupations | 2,810 | $10.41 | $19.68 |
| Healthcare Practitioners and Technical Occupations | 25,350 | $17.14 | $29.45 |
| Healthcare Support Occupations | 11,570 | $9.98 | $13.56 |
| Protective Service Occupations | 4,010 | $11.16 | $21.41 |
| Food Preparation and Serving Related Occupations | 12,370 | $8.36 | $9.29 |
| Building and Grounds Cleaning and Maintenance Occupations | 6,160 | $8.84 | $12.26 |
| Personal Care and Service Occupations | 7,920 | $8.62 | $10.83 |
| Sales and Related Occupations | 18,050 | $8.54 | $11.41 |
| Office and Administrative Support Occupations | 31,200 | $9.90 | $16.50 |
| Farming, Fishing, and Forestry Occupations | 450 | $9.93 | $14.20 |
| Construction and Extraction Occupations | 5,870 | $13.30 | $22.87 |
| Installation, Maintenance, and Repair Occupations | 7,660 | $12.75 | $20.62 |
| Production Occupations | 28,830 | $10.82 | $16.11 |
| Transportation and Material Moving Occupations | 16,790 | $9.18 | $15.54 |
| Dark Highlight: 10th percentile wages that exceed that needed to meet basic cost of living needs
Light Highlight: Median wages that do not meet that needed to meet basic cost of living needs |
|||
| Source: DEED Occupational Employment Statistics (OES) | |||
Unfortunately, the 10th percentile wages — usually considered entry-level — see far fewer of these occupational groups making the cut to meet the basic cost of living needs. In fact, the numbers reverse from those of the median wages and only seven of the 22 occupational categories have 10th percentile hourly wages above $15.65. These are in management, business and financial operations, computer and mathematical, architecture and engineering, life, physical and social science, legal, and healthcare practitioners and technical occupations.
The good news is that there are over 8,000 current vacancies in the region. However, many of them have median wage offers that fall below what is needed to meet the basic cost of living needs for a typical family in the region. As seen in Figure 1, there are only seven occupational groups that have vacancies with median wage offers that meet the cost of living threshold, while the remaining 15 fall below, including the groups with the largest number of current job openings.
The recent vacancy data show other issues with the characteristics of the job postings. As seen in Table 4, many of the occupational groups with the most openings do not pay the hourly wage needed to meet the basic cost of living needs for a typical family. However, it is possible that those wages may meet the needs of other household compositions, such as a single person or a partnered couple without children.
| Table 4. Job Vacancy Characteristics, Southeast Minnesota | ||||
|---|---|---|---|---|
| Occupational Title | Vacancies | Percent Part-Time | Percent Temporary or Seasonal | Median Wage Offer |
| Total, All | 8,174 | 42 | 14 | $12.32 |
| Food Preparation and Serving Related | 1,458 | 64 | 11 | $9.87 |
| Sales and Related | 931 | 57 | 3 | $10.89 |
| Personal Care and Service | 914 | 72 | 18 | $10.29 |
| Education, Training, and Library | 861 | 16 | 51 | $14.98 |
| Office and Administrative Support | 537 | 36 | 1 | $13.63 |
| Healthcare Support | 514 | 46 | 17 | $12.72 |
| Healthcare Practitioners and Technical | 488 | 28 | 1 | $23.65 |
| Construction and Extraction | 488 | 3 | 28 | $13.29 |
| Transportation and Material Moving | 461 | 35 | 0 | $13.98 |
| Production | 358 | 15 | 1 | $13.62 |
| Building and Grounds Cleaning and Maintenance | 219 | 65 | 29 | $10.49 |
| Management | 160 | 3 | 0 | $25.20 |
| Community and Social Service | 135 | 52 | 3 | $13.82 |
| Installation, Maintenance, and Repair | 119 | 19 | 11 | $15.34 |
| Architecture and Engineering | 111 | 1 | 0 | $29.86 |
| Arts, Design, Entertainment, Sports, and Media | 98 | 77 | 4 | $14.18 |
| Life, Physical, and Social Science | 87 | 1 | 3 | $32.31 |
| Business and Financial Operations | 60 | 7 | 0 | $19.69 |
| Legal | 59 | 0 | 1 | $19.00 |
| Computer and Mathematical | 57 | 5 | 0 | $25.38 |
| Protective Service | 36 | 43 | 18 | $12.27 |
| Source: DEED Job Vacancy Survey (JVS) | ||||
Not only are the median wage offers across all vacancies below $15.65, the top six groups with the most vacancies share this characteristic, and it's not until healthcare practitioners and technical occupation, with 488 vacancies, that we see the first median wage offers that make the cut. To put it into context, that's almost one-third of the current vacancies (5,215) that don't fit the bill.
Some of these low-paying vacancies have high percentages that are part-time, temporary, or seasonal, leading to a double whammy of low hourly wage offers and part-time hours. These lead to lower earnings from fewer hours in general, jobs that only last for a certain period of time, or jobs that have seasonal layoffs. For example, of the 1,458 vacancies in food preparation and serving related occupations, which had the most openings in the region, 64 percent (933 vacancies) are part-time. As shown in the above figure, this set of occupations has a median wage offer of only $9.87 per hour. Likewise, about two-thirds of the openings for sales and related and personal care and service occupations were part-time, and wage offers were below $11.00 per hour.
Education, training, and library openings, which have a median wage offer that is slightly below what needs to be earned to meet the basic cost of living needs for a typical family, also see a high number of vacancies (861), but of those 51 percent (439 vacancies) are temporary or seasonal. Thus, earning potential is affected by a lack of full-time year-round employment.
While the cost of living in Southeast Minnesota is lower than some other regions, and there are indeed people employed in jobs that pay enough or more than enough to cover the basic cost of living needs for a typical family, there are other families that aren't earning enough to meet those needs. While cost of living needs vary depending on family composition and how many hours one or both parents work each week, Southeast Minnesota has its work cut out for itself to help fill the gap between what workers are being paid and what they need to be able to afford to live in the region.
