Mankato has the lowest unemployment rate of any city in the country — and it’s one of six cities in the state or on its border that ranked in the top 20 for jobs this fall.
The entire state of Minnesota came in an unemployment rate of 2.1% for OctoberBond with Utah for that #1 among States. Minnesota held the top spot for a month after recording in June lowest state unemployment rate in US history of 1.8%.
The low rates are marked by strong hiring since the coronavirus pandemic was brought under control and a shrinking overall workforce. The state’s 3 million+ workers are still about 90,000 fewer than before the pandemic.
Labor experts have pointed to accelerated retirements in the state’s aging population and ongoing challenges in caring for children or the elderly as some of the reasons some workers have not returned to the labor market.
In September, Rochester had the fourth lowest unemployment rate in the US, tied with Sioux Falls, SD, and Jefferson City, Mo, with an unemployment rate of 1.5%. St. Cloud came in 11th with an unemployment rate of 1.7%.
The Twin Cities are also on the list. With an unemployment rate of 1.9%, it was ranked 19th in a tie of six.
Fargo (1.4%) and Grand Forks (1.6%) — cities in neighboring North Dakota whose metro regions include cities in Minnesota — are also in the top 10.
So what is going on in these Minnesota cities that has lowered their unemployment rates so low?
“We know Rochester has a strong healthcare sector,” Alicia Cordes-Mayo, a spokeswoman for the Minnesota Department of Employment and Economic Development, wrote in an email. “And Mankato and St. Cloud have universities and significant manufacturing capabilities.”
All of these elements can contribute to low unemployment rates, she added.
Healthcare and manufacturing are, of course, some of the sectors that will feel the hardest from labor shortages.
Mankato has always had a very low unemployment rate — often below 3% during the busiest times of the year — and a very high labor force participation rate, said Ryan Vesey, manager of economic development and research at Greater Mankato Growth, the region’s chamber of commerce.
But 1.3% is an all-time low, he said.
Vesey said employers in Mankato are hiring more workers, recruiting more people with disabilities or those who are reintegrating after incarceration, and are more accommodating of immigrants. He gave a recent example of a manufacturer setting up foot washing stations and prayer rooms for East African workers.
Employers are also looking to automation and robotics to fill the gaps, he said.
“I think sometimes people look at this low unemployment rate and say, man, it’s really hard to be an employer right now,” Vesey said. “But what is sometimes overlooked is that unemployment is so low only because companies are doing so well. Otherwise they wouldn’t need all these people.”
Sean O’Neil, director of economic research at the Minnesota Chamber of Commerce, noted that Minnesota often has a much lower unemployment rate compared to the US as a whole. In October, the US unemployment rate was 3.7%.
He said the difference between the two is about the same now as it has been for decades since the federal government began tracking state unemployment rates in 1976.
But during the pandemic, Minnesota has lost more people from its workforce than some other states that also have low unemployment rates, he said.
“And we haven’t seen a great recovery from these workers,” O’Neil said. “So that’s a compounding factor that’s contributing to these really historically low unemployment rates.”