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Will Cook County’s economy continue to grow following the pandemic? And will there be enough workers to sustain more growth? Two folks who have their fingers on the region’s economic pulse made presentations via zoom Tuesday, February 22, and attempted to answer questions posed by the public.
The meeting was hosted by the Cook County Chamber and moderated by Jim Boyd.
Before introducing the two speakers, Boyd pointed out that the last two years of record business in the county during the pandemic was nothing foreseen; in fact, the pandemic was cause for concern that there would be “A serious and prolonged downturn for Cook County.”
However, after a three- or four-month slump, the economy came roaring back, and many business owners found they were busier and stayed busier far later than they had in the past. Moreover, a look at lodging taxes over the last two years showed the increase was real.
But now that the pandemic is wearing down will people still visit the county in large numbers? Boyd said many investment decisions will be made based on visitor projections, although he added “no one has a crystal ball.”
Speakers
On hand was Carson Gorecki: Northeast Regional Labor Market Analyst with the Minnesota Department of Employment and Economic Development (DEED), and Monica Haynes, Director of the Bureau of Business and Economic Research and Adjunct Professor of Economics at the University of Minnesota-Duluth.
Gorecki was up first. He explained that in the seven-county Arrowhead region he worked in, DEED used strategic planning to help the regions workforce, businesses, and communities. He supplied a lot of data, labor force characteristics, unemployment statistics, unemployment rates, populations, wages and salaries, job projections and more. This data is used for market-responsive planning so a business can make data-informed decisions.
He also used data to show how Cook County’s economy has been doing pre-pandemic, during the pandemic, and how the Northland workforce might look in the future.
Some takeaways:
Between 2010 and 2020, Cook County gained 424 people, bringing the population to about 5,600. Gorecki said by percentages Cook County was the 15th fasted growing county in the state, and he added that Cook County’s racial make-up is becoming more diverse.
There are 8.2 percent more births here than deaths, he said, noting, “People moving here tend to be younger than the people living here.”
Cook County’s median age is 52.7 versus the state’s median age of 38.3 percent, and 47.4 percent of the county is 55 or older, compared to 30 percent for the rest of Minnesota.
Recent labor force trends show that participation in the county’s labor force fell and has remained suppressed since mid-2020.
As of 2021, Cook County had 50 percent of its labor force working in leisure and hospitality, the most significant percentage in the State. Accommodations (lodging) and food service were the largest employers in the leisure and hospitality sector.
The pandemic accelerated the shrinking labor force. As a result, more young workers are leaving the labor force while workers 65 and older who have retired aren’t returning at least part-time to the labor pool in the numbers they once were.
More women than men have left the labor force, said Gorecki. The thought was because, during the pandemic, women opted to stay home and provide child care/school for their children while the men continued to work.
Job vacancies have skyrocketed across North Eastern Minnesota, with 13,000 job openings in North Eastern Minnesota in quarter 2 (Q2), which is 32 percent higher than the next highest quarter (Q2) 2017.
Cook County has an unemployment rate of 4.7 percent, returning to pre-pandemic levels.
The decrease in employment started in 2018, with the most significant decline in young workers seeking jobs in the leisure and hospitality industry, which Gorecki found surprising.
Temporary foreign workers, those holding J-1 or H2B visas, play a massive role in the county’s labor force, explained Gorecki. But because of the pandemic, J-1 workers were few and far between last year and non-existent the year before.
With the pandemic abating—at least for now— it looks like foreign workers will be able to return and fill openings so businesses can return to providing regular services.
Next, Monica Haynes used graphs to lay out what future economic trends might be in the county and throughout the Northland.
Citing an Explore Minnesota Business Conditions Survey conducted in the fall of 2021, Haynes said Northeast Minnesota business owners were asked to compare 2021 fall revenue to fall 2019 revenue, and 66 percent reported a significant increase in revenue.
While revenue was up, a shortage of workers made running tourism-related businesses tough. Locally, Gorecki said the county was short about 250 workers to fill job openings.
And Haynes noted,
According to an Explore Minnesota Winter Travel Survey, folks indicated they are willing and ready to travel in the next six months, and the Northeast Region was the most popular destination among those potential Minnesota travelers.
Visitors coming here expect COVID-19 protocols to be in place along with pre-pandemic levels of customer service and pricing.
Haynes said the national outlook is for domestic leisure travel to surpass 2019 levels in 2022 and beyond. In addition, trips across the U.S. taken by non-U.S. residents are forecast to increase 22.7 percent.
Caveats and Considerations
Inflation is projected to ease late in 2022. At least that was the projection before Vladimir Putin sent Russian troops into Ukraine. A gradual rebound in the workforce is also predicted, and folks who had been used to traveling abroad are now picking domestic travel over foreign travel.
According to a 2021 Business Conditions Survey conducted by Explore Minnesota, Greater Minnesota is recovering better than the Metro area.
That same survey found that overnight accommodations are recovering faster than food and drink businesses, and resorts are seeing their best revenues overall.
But these forecasts were developed before the Omicron surge.
Haynes ended with a quote by a representative from the Federal Reserve Bank of Minneapolis. “If you can tell me whether there are additional COVID variants on the horizon, how many, how contagious, and how damaging to individuals, then I might have a way to guess. But without that information, projections beyond one to three months are a fool’s game.”
Questions from the audience included housing, or the lack of workforce housing. That’s not just a problem in Cook County but exits statewide. Jim Boyd took that question and said there were people working hard to solve that issue in the county.
For now, all we can do is plan for a busy summer. Higher gas prices might mean even more people come north rather than taking long trips across the country.
And with Canada someday in the near future opening their borders to non-essential travel, the leisure and lodging business will surely flourish if we can get enough help to service all of the visitors.
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