Episode 12: Minnesota's changing workforce

Christy Kallevig: Welcome to Vital Connections On Air, a podcast brought to you by the University of Minnesota Extension Center for Community Vitality that explores the trends and topics important to communities and leaders throughout Minnesota. My name is Christy Kallevig, and I'm an Extension educator with the Center for Community Vitality, and today I am joined by Ryan Allen, who is an Associate Professor for the Humphrey School of Public Affairs. Welcome to Vital Connections On Air, Ryan.

Ryan Allen: Thanks, Christy. Thanks for having me.

Christy Kallevig: Great to have you with us to talk about this really interesting topic of immigrants and the workforce. Why don't you start by telling us a little bit about your work in the area of immigration and what you're seeing in Minnesota?

Ryan Allen: From a research perspective, I've been involved with immigration research since I was a graduate student. At first, I was doing research on how refugees resettle in the United States, and I've continued some of that research, but I've also looked into how immigrant households fare during the recent housing crisis and the recession. I've also been doing some recent research on how undocumented immigrants are experiencing the housing market and how they engage in transportation issues.

Most recently, I've been involved with research that focuses on the value of immigrants to Minnesota's workforce, and continuing in that vein, how rural Minnesota and the migration trends that are going on there involves immigration. In particular, refugees and economic migrants as well. So there's been a real variety of research that I've engaged in when it comes to immigration. Now, as I noted, some of that is national, but an awful lot of the work that I've done focuses right here in Minnesota.

So I suspect we'll talk a lot about that, but let me introduce a couple of topics. As I mentioned, the workforce issue in the State of Minnesota and in many states around the country is becoming pretty critical--a combination of an aging workforce, particularly in rural parts of America, and the need for continued economic vitality in these communities. There's some real question marks about where that additional labor is going to come from. Immigrants fit part of the answer there, and so I've been looking into that, and that's a big story here in Minnesota.

Christy Kallevig: Absolutely. And something that we have been talking about, workforce issues in general on the podcast, and that's why your participation here is so timely. Before we dig too deep into the research that you've done, maybe we can talk about terms and definitions, because everybody views things or understands things a little bit differently. So, when you take a look at the research that you're doing and you speak about immigration and migration, can you kind of talk to the difference between those two terms a bit?

Ryan Allen: Yeah, there can be a lot of confusion about some of the terminology, so it's important to get that clear. When I say the term "migration," what I mean is the study of the movement of people. Traditionally, that's been a study across some kind of boundary, right? It could be an international or a national boundary, like international migration would entail, but it could also just be as simple as looking at who moves from Willmar to the Twin Cities to go to college. Right? That's also an example of migration.

So if that's migration, the study of the movement of people, immigration is the study of migration that occurs in a transnational way,  [as] a person moving from one country to another. That's how I distinguish the two terms, but it can get even more complicated from there. So within immigration, there are a lot of ways of thinking about immigrants. You can think about a refugee, which is a kind of immigrant that comes to another country because they're fleeing some kind of persecution. You can think of an economic migrant, that's somebody who's going to a new country seeking economic opportunity. You can think about permanent immigration, somebody who comes and doesn't plan on leaving. You can think about circular immigration, somebody who may come for a temporary stay to work and then go back home and then do it all over again in future time periods. So, it's a big topic, but to get clarity on it, when I talk about migration, that's movement of any kind of people. When I talk about immigration, I'm specifically interested in people who cross a national boundary.

Christy Kallevig: The study that you did, Immigrants and Minnesota Workforce, how did you go about gathering the data and analyzing it, because you're certainly talking about past trends and future projections? So, you had to have dissected a lot of data to come to this.

Ryan Allen: One of the interesting things about writing this report is a lot of this information already exists. When I put the report together, I actually did very few of my own projections when it comes to understanding the workforce. Because we have such a good state demographer here in the state of Minnesota, a lot of this research has already been done. I think the contribution I made with this report was pulling data and information from a variety of reports that are out there from not only the state demographer's office, but the Department of Employment and Economic Development, State of Minnesota, as well as some data that came directly from the Census Bureau to really pull them all together in one report. And make a cohesive kind of story around what's happening with Minnesota's labor force today, how we anticipate it's going to change in the future, and what role immigrants are going to play in the future.

Ryan Allen: So, all the data--most of the data come from the Census Bureau and a lot of the projections were already completed and the analyses were already completed by the state demographer's office or the Department of Employment and Economic Development. What I did was pull them together. Now one area that was a direct contribution and new analysis were kind of estimates of what we should anticipate for the foreign-born population in the state of Minnesota. This is not a projection that the state demographer's office is able to do at this point. And so I took it upon myself to do that projection and what I'm anticipating is that in the next 30 or so years--30 or 40 years--we should expect approximately a doubling of our immigrant population. Such that, it will move from just under eight percent to about 13 and a half percent. I think it's useful to keep in mind, however, that [the] 13 and a half percent that I'm anticipating is where the U.S., the portion of the foreign born is today. So it is not 30 years from now; that's what the US looks like today. That's exactly how far behind really the state of Minnesota is from the nation overall in terms of having never been as a part of this residential base.

Christy Kallevig: What is leading you to that number, that sizable increase?

Ryan Allen: It's basically using projections at the national level and trying to extrapolate the national level projections to what the immigration flow as we experienced it here in Minnesota will mean going forward. It's easy to get bogged down in some of the details, and people who may be interested to read about it in the report, but essentially what I do is make some assumptions about immigrant flows that are more or less in line with what we've experienced in the recent past. And extrapolate from that going out. The only thing that we can really say about these kinds of projections is we know they're not a hundred percent accurate by any stretch of the imagination. We can never anticipate all the changes that will be coming in the decades to come and what that will mean for the immigrant, the immigration policy, and the immigrant population in the United States, advances in technology and healthcare that will extend life, etc., all those things we know are happening. We can't anticipate all the changes, but this represents our best guess as to what will happen in our state.

Christy Kallevig: And some people might be concerned that are we ready to see that level of growth, but your report also indicates that we at this point in time are really not even serving the number of immigrants or refugees that we have the capacity to. Correct?

Ryan Allen: Yeah, so, if you look at, particularly for refugee flows for the state of Minnesota, historically, we've had much larger arrival numbers in decades past. So, we know we have the nonprofit infrastructure in place that helps with the really specific work of refugee resettlement in the State of Minnesota. We definitely have that capacity. And so from a refugee perspective, we're not serving as many refugees as we have the capacity to serve. There's room here to welcome more people if the political winds and policies change in Washington. But it's also, I think--notably--it's such an interesting figure to come back to [that] over a third of the state's population was foreign born in 1900. We've had a much more dramatic immigrant presence in the state of Minnesota in the past than we have today, in terms of the proportion of our population. And so when you hear people say, this kind of immigration, these numbers never happened before.

It's just simply not true. The immigrants are coming from different countries. That's certain to be true, but it's just simply not true that we've never experienced this before in the state of Minnesota. We're just a shadow of what our immigrant population was in terms of the proportion of this day today, as we were over a hundred years ago.

Christy Kallevig: You know, as you discussed the changes in immigration into Minnesota, over the years, we're seeing a lot of population changes now just in general. How do the immigrants that are choosing to come to Minnesota or maybe placed here through refugee resettlement programs, how do they contribute to the changes within Minnesota's population?

Ryan Allen: Sure. So that's a big question, which I'm sure will impact some, but one thing to know before we get into the immigration issue is another trend that's going on in the state of Minnesota and in many other states, particularly in the Upper Midwest, but really all over the US is we're getting much older. On average, our state is just aging at a rate that many people are pointing to with increasing anxiety. And so, for example, there are a substantial number of counties in the State of Minnesota that have a large population is over 65, but it's poised to increase dramatically in the future. Such that, I don't think there'll be any counties in the state of Minnesota that don't have a really large portion of that population that's aged over 65 by the year 2045. Now that's just kind of a demographic fact. These things are going in that direction for our state.

So one of the questions becomes what will the influx of immigrants mean for some of those dynamics that are going on with the state? The answer is that the immigrants are going to have a really important effect on maintaining a more balanced distribution of age in our state, but they're likely not going to be enough to forestall that dramatic aging that we're anticipating. Another thing to note like on that topic, is that the effects on the state are going to be unequally distributed. So one of the things that we know is that the metro area going forward, is going to be relatively younger than most of the rest of the state. I don't have any reason to believe that won't continue. That's been a longstanding trend and is poised to increase in the future. We also know that most immigrants in the state of Minnesota live in metropolitan areas, but that too, can be misleading if you're not looking at specific communities and understanding how dramatically they are changing in terms of the immigrants that are arriving there. But it tends to be pockets and it's not equally distributed around the state. So those are a couple of trends that I'm keeping my eye on. Immigrants are poised to play a role in this kind of age conversation that we're having.

Christy Kallevig: As our communities change, either because of an aging population as well as changes in immigration patterns and new residents joining our communities. What types of things are you seeing when you look at how that contributes to the workforce?

Ryan Allen: There's an interesting relationship between population change and the workforce. So generally speaking, you see a population that's increasing in size. You also can anticipate an increase in the size of the workforce. That's important, because a growing workforce is an important component of economic growth, though economists tell us that about 25 percent of the economic growth experienced in the United States in recent history is due to increases in the labor force size. There are other factors that are important like productivity and logical change, a number of other things, but labor force change is an important component of economic growth. What the state demographer anticipates for the state of Minnesota and its labor force change over time is a dramatic slowing. In the 70's and 80's and even into the 90's, our labor force was growing at a very robust rate. The rate of growth in our labor force has shifted down significantly, such that, we're growing at about half a percent per year as opposed to about two percent about 30 years ago. So, the question becomes, what's going to happen when it comes to economic growth in the labor force? Well, again, the state demographer's anticipating that we're going to continue with this kind of historically low levels of growth in the labor force. And that's even when you include an understanding about immigrants and what they bring to the labor force. Such that, if we want to maintain a more robust kind of labor force growth, we're going to have to be much more successful at attracting migrants of all kinds. But certainly, recent history has told us the immigrants are an important stream of migrants coming to the state, if we want to kind of maintain a more robust labor force growth. Now, that's kind of the macro view, but what this looks like on the ground in different communities can really vary. So there'll be some communities, particularly in the southern part of the state, often times around meatpacking or poultry processing plants that are seeing their labor forces grow significantly. That's a function of a demand among those firms for labor and immigrant stream stepping in to fill that demand--increasing supply--and so that's an important conversation when it comes to local labor markets and what's going on with kind of the local scene on economic development. In another area where you see this as really important in the state of Minnesota is in a lot of the more recreation-oriented parts of the state, parts of the lakes areas is a good example. So, for that hospitality industry that's so vital for the economic stability and net growth in that part of the state, immigrants also played an important role. Oftentimes, they're here on temporary visas. I think many of us have been to different lodges and so on, in different parts of the state and see people speaking different languages and have name tags that tell us where they're from and they're here on a temporary visa. That is also a type of immigration, but it's a temporary immigration. I think that this, the vibrancy of our labor force is going to be directly affected by how many immigrants come, how welcoming we are to receiving those immigrants, and the kinds of industries where they work.

Christy Kallevig: Something that has been in the news quite a bit is immigration policy. Based upon our current policies and those that are proposed, what additional challenges do you see to Minnesota's workforce and engaging immigrants in that workforce?

Ryan Allen: The report that I wrote based on projections by the state demographer indicates that thinking about our immigration flow kind of more or less is a constant. We just assume for a minute that things aren't going to change, that we're going to continue to attract the rate of immigration that we've currently been attracting and that the aging of the state's population will continue, etc. The things we're going to go as they currently are, then we know it is pretty inescapable that our labor force growth is going to drop and we know that a sequel, unless we have a really dramatic increase in labor productivity, we should anticipate lower economic growth in the state. If we go now with immigration policy and whether we should be restricting immigration or increasing immigration, and this is very much up for debate, but my view of the conversation that's going on in Washington DC, is that the idea of expanding immigration is not likely anytime soon. A much more likely [scenario] is that we're going to be constraining immigration to the United States. There are a lot of different proposals that Congress is considering right now. We know the current president has taken a pretty hard line when it comes to immigration, has strongly signaled that he favors restricting it. We know he has some powerful allies in Congress who feel the same way. So let's assume for a moment that they're successful and we restrict immigration by half of what we're currently receiving. What can trace that out for the State of Minnesota, again, doing some kind of rough assumptions, that means that we should anticipate half of the immigrants that we're currently receiving.

Incidentally, it might be more significant restrictions for the state of Minnesota because such a large proportion of our immigrant stream comes from refugees, which the president has sought to curtail significantly, but if we just assume that our level of immigration is going to go down, perhaps significantly, that's going to have some real implications for our labor force. That is inescapable.

Based on the projections we can see even more significant declines in labor force growth than we're already anticipating. Well, why is that important? Why should we care? That's a reasonable question to ask. One of the reasons why we should care is that people in the labor force are the ones that support a pension system, like Social Security and Medicare. If we don't have people in the labor force paying in to those particular programs, then our people who are currently retired and are contemplating retirement should have less security and knowing that they're going to have those pensions waiting for them when they need them. That's one implication of cutting immigration. The second implication is that for the State of Minnesota in particular, is that what has been kind of a slight growth we've noticed in rural parts of the state could easily turned into negative growth. If we see more people leaving these communities then are moving there and that in combination with an aging population, it's not just going to be the labor force we're going to be concerned with, it is going to be a population levels in the communities. That may not happen next year, but if we continue down the path of restricting immigration, it becomes much more likely in the decades to come.

Christy Kallevig: Are there benefits to investing in bringing immigrants into the workforce?

Ryan Allen: One of the concerns I think that some employers may have (this occurred in some early research I did when I was a graduate student) was this fear that if we invest in an immigrant workforce and we hire people to come and teach English at our business, then aren't we just going to set ourselves up for some real problems, because then they'll just get better jobs and leave us?  So we will sink all this money and investment entities helping them learn English and then they'll go to a competitor or something like that. I certainly understand that concern. But if you look at the larger set of research around offering training within work sites, it's overwhelmingly positive, increases productivity of labor of the workforce, it increases retention of people or turnover. Again, I think it's largely around making sure people understand that there is a career path for them, that they have some kind of an upward trajectory within a business that it's going to be most beneficial. So, I think employers investing in an immigrant workforce can be really successful and I think increasingly it's going to be more and more important as the baby boomers retire, as some of the communities in Greater Minnesota start to face some real labor shortages. We're already hearing stories about this around the state--an inability to find people with the right skills to do the work and make sure that their business remains economically viable. We're already starting to hear it murmured around the state and that murmuring is going to increase in volume, I anticipate. That's not just me saying that, that's the Minnesota Chamber of Commerce, that's the state demographer, that's the Department of Employment and Economic Development. There are many entities that are looking at this aging labor force issue and see immigrants are increasingly going to be playing a vital role. So there certainly are things that employers can do to make sure that they're attracting and investing an immigrant workforce that's going to make them that much more productive.

You go back to a point you raised earlier though, that doesn't necessarily mean that that has to be an either/or for an immigrant workforce or a native-born workforce. These firms around the state are going to be looking for workers. And I think it's this kind of idea that we're in competition for one another, with one another, is going to gradually die away when people start to realize exactly how important having workers is for the economic vitality of the state.

Christy Kallevig: And I think that that's a great point and I'm glad that you stated it that way because in your report you discussed the fact that really, at our current rate of growth in the state, population wise, we won't be able to fill the jobs that are becoming available. Did I say that correctly?

Ryan Allen: Yeah, I mean, I think that's more or less correct. I think that there are some unknown variables that we don't know yet to what extent when a firm has a labor shortage they choose to invest in technology to make sure that they can continue to meet production goals that they have as a firm. There are trade-offs associated with that kind of investment, versus using labor. And there may be some industries where it's easier to do this than others. Alright. So, one example I would give is in home healthcare.

We know that's going to be a booming industry as the baby boomers start to retire and age in place and they're going to need more and more assistance from healthcare givers. That's not the kind of industry that is given to technological innovation that's going to replace labor in any kind of large scale way, not anytime soon at least.

And so that's an example where there's limited opportunity I think, to substitute technology or investments in machines for labor to get the job done. Now, not every industry is the same, but to take that one example, we know that we're already facing labor shortfalls there, and we're only poised to grow in the future. Who is going to take care of our elderly population is the pressing concern, frankly, and I think that, once again, immigrants are going to figure increasingly prominent in the answer to that question.

Christy Kallevig: That comment that you made about the vibrancy of our economy--I think that that could be somewhat controversial when you throw that out to communities. Because you may have people that say there aren't enough jobs to go around and we have new immigrants coming into our communities and there is, you know, this group of people who are unemployed over here. What would you say to that argument, because you've definitely pointed out some facts to needing a growing labor force to keep our communities vibrant?

Ryan Allen: Yeah, so, there's no denying this is a politically contentious issue and some things can get lost in this discussion when you keep it at a level of generality. When you talk about the state overall, or the nation overall, you can gloss over differences that are experienced on the ground and in smaller communities or in larger for that matter. However, with that said, I think one of the things to understand about immigrants is immigrants rarely go to communities where they don't see economic opportunities. They're not randomly distributed around this state and certainly around the United States.

And so, while I'm sympathetic to the concerns about economic insecurity what research tells us is that it's rarely immigrants that are causing that economic insecurity. Much more likely is other kind of longer term trends in the economy that are leading to some kind of economic insecurity people were experiencing. That could be the mechanization of farming. That can be the de-industrialization in many parts of the Rust Belt in the Upper Midwest, the weakening of labor unions. There are a variety of factors that have played into why people may feel less than confident in their local economies.

The other thing that I think is important to understand about immigrants is that they tend to be entrepreneurial at substantially higher rates than native-born folks. So one of the things that's always been true when it comes to immigrants in the United States is that they start businesses, they are oftentimes self-employed and in many cases they start businesses that employ others. So, the vibrancy of local labor markets and economies, while maybe bumpy and there are many factors that are benefiting small communities. From my position, I don't see immigrants as playing a negative role that many people often attribute to them. Now, I'm very interested in sympathetic or talking about how we increase economic development in Greater Minnesota, but I think that closing it off to immigration is probably not a winning proposition, at least that's my view. It's the view of many people who study this topic.

Christy Kallevig: As we think about immigrants coming into our communities and in joining the workforce, what are some things that we can do to make our state and our communities more welcoming, more appealing?

Ryan Allen: This is, I think, the million dollar question. It seems likely that states are going to be trying to attract a pool of immigrants that's more or less, either staying the same or getting smaller. In other words, it's going to be more imperative that we do a good job of recruiting new labor to the state in the future if policy goes the direction that I think any of us anticipated, but what can we do? I think there are some fundamentals that are attractive to people migrating anywhere. Minnesota does pretty well on it, but there's room to improve.

So what I mean by that is that when people are deciding where they want to live, it's not just the economy, it's not just the job opportunities that they're looking for. They're also looking for affordable, safe housing. They're looking for communities that they can feel a part of, that they're going to feel a social connection in and they're looking for good quality schools for their children. They're looking for transportation options that meet their needs, be that the quality of the roads or in more urban areas, the quality of the transit.

There are a variety of factors above and beyond the economy that we should be paying attention to when it comes to attracting people. These kinds of quality of life indicators, if you will, that loom large when people make decisions about where they're going to settle. Now that said, availability of jobs is also clearly an important issue, but people want to know that they're going to be able to find jobs that pay a reasonable salary, that offer competitive benefits. That can be really important for things like the Destination Medical Center in Rochester and other kind of economic activity that's targeting a high skilled workforce, immigrants or not.

But I think it's also true for other industries. We have to be much more mindful of the kinds of opportunities that businesses are able to offer their employees and future employees, not only in terms of salary, but also paths to working in a new administration or leadership positions.

In other words, is there a path of mobility that people see a career ladder for? I think those are the kinds of fundamental economic issues that we need to wrestle with as a state. There is quality of life issues. There's the economy and then I think above and beyond that there's a willingness to embrace differences, not just the state of Minnesota, but many states in the United States, need to think about. What does it mean to have people who dress differently, who speak different languages, who worship differently in our communities? Do we treat them fairly and with respect, are we welcoming, or does it cause anxiety? Existing research suggests that in many cases it causes anxiety, and that's something that we can be mindful of, and something that we can be reflective of. And it's something that we can improve on.

Christy Kallevig: So, asking to get to know someone rather than just assuming that we know everything about an individual because of what we may have seen in the news or read in an article will help us get much farther.

Ryan Allen: I think that's true. I mean, I think that the social connection is absolutely crucial for people feeling attached to a place. And that's true no matter where you live. People want to live in Greater Minnesota because of the quality of life. They want to live here because of the feeling of community. But if you're given the cold shoulder when you come to a new community, then it works in the exact opposite direction. And that can reinforce stereotypes.

As you were mentioning things we may have heard in the news, assumptions we make based on how someone dresses or the language that they speak, that's never a healthy thing. I think we always, you know, going back to kindergarten, are taught to give people the benefit of the doubt; [we] are taught to be welcoming and friendly. And I fully anticipate that that's how we'll operate as a state. That's not to suggest that there aren't struggles, but I think that if we have these kinds of important community-level conversations, what kinds of communities we want to be, and we get to know new immigrants in ways that are more than superficial, more than just passing on the street. The more we find that we have a lot more in common than we may realize. Again, we're all eager for the same things. We want safe streets, we want good quality housing, we want good schools, we want feelings of community support. That's a human condition, not any one nationality's perspective. I'm really optimistic that the state of Minnesota is going to be able to do that because I've seen how welcoming we can be.

Christy Kallevig: Well, thank you so much, Ryan, for joining me today. Hopefully, we can have you back again sometime soon and good luck with the research that you continue to do in this area and others.

Ryan Allen: Okay. Thank you very much, Christy.

Christy Kallevig: Thank you to Ryan Allen for joining us for this episode. A link to Ryan's study is available on our website at extension.umn.edu/community, where you can learn more about Extension Center for Community Vitality, as well as visiting our Leadership and Civic Engagement Alumni Blog to learn more information about this topic. Please follow us on Facebook and Twitter to stay up to date on new research and resources for communities and those who lead them. We hope that you will join us again for another episode of Vital Connections On Air.