Steven Hine

Steven Hine, of the Minnesota Department of Employment and Economic Development, speaks at a conference held Thursday, Jan. 9, at the Minneapolis Federal Reserve. Matthew Guerry / Forum News Service

ST. PAUL — Parts of the Upper Midwest will grapple with slow population growth and the spread of automation in the years ahead, economists said Thursday, Jan. 9.

Speaking at a morning Minneapolis Federal Reserve conference, experts from Minnesota, the Dakotas and northern Wisconsin — which together with Montana and portions of Michigan form the Fed's Ninth District — spoke about the current conditions that they believe signal a "softening" economy.

In Minnesota, foreign migration to remain strong

Minnesota Department of Employment and Economic Development economist Steven Hine said Thursday that the state's population is unlikely to benefit from domestic net migration in the near future. That is to say, he does not expect the number of people who relocate to Minnesota for work to offset the number of people who leave for that same reason.

Much of the state's labor force growth in recent years, he said, can however be directly attributed to foreign migration. Hine said that he and his colleagues anticipate that trend to continue, although he noted only the state's share of foreign-born workers grew by only 3,000 in 2018 compared to previous annual increases of around 12,000 on average.

Between 2007 and 2018, he said that "over two-thirds of our labor force growth has come from increases in our foreign-born labor force."

He added that people of color now make up a much larger part of the available workforce than in the past.

As for Minnesota's rate of labor force participation, Hine projected slower growth than what was observed in the 2000s and 2010s. He said participation is expected to increase only by about 55,000 workers over the next 10 years, compared to an annual average of about 15,000 workers a year between 2002 and 2018.

It is still to early to say what effect automation will have on Minnesota, Hine said, though it will likely affect all job sectors to some extent. Manufacturing and industrial workers are thought to be more easily replaced by machines than officers workers, he said, although the latter may have to augment their work with machines in the near future.

Leisure and hospitality jobs, he said, are also at risk of being automated.

Wet weather and trade wars will sink some North Dakota farms

Nancy Hodur, director of the Center for Social Research at North Dakota State University, said that some of the state's crop producers will inevitably go out of business in the near future. A historic year of heavy rain prevented 60% of corn grown in 2019 from being harvested, she said.

The state's agriculture industry did manage to generate a positive cash flow in 2018, she said, but that is largely due to the infusion of government subsidies meant to offset the effects of the trade war between the U.S. and China. What the future holds for North Dakota agriculture is not immediately clear, she said.

After nearly a decade of explosive growth, Hodur said the state's oil and gas sectors have stabilized. The number of active wells that are opened year-over-year will likely keep steady into the future rather than grow annually, she said. Some experts have said that the state could produce up to 2 million barrels of oil a day at some point throughout the next decade, although Hodur cast doubt on that estimate.

In terms of population, Hodur said that North Dakota is expected to grow steadily as the economy cools from the oil and gas boom, with counties in the northwest expected to grow the most. What's notable compared to many other states, she said, is that North Dakota's population appears to be getting younger.

"It's quite a baby boom," she said.

Wages growing, albeit slowly, in Wisconsin

Compared to Minnesotans, University of Wisconsin professor Taggert Brooks said that Wisconsinites average lower wages. That said, wages have been growing each year in the state's northern half for the past several years.

On whole, Taggert said that Wisconsin's economy is more dependent on manufacturing than Minnesota's. Most manufacturing activity, he said, though, occurs in the southeastern part of the state.

That region still employs more people in manufacturing than the north, Taggert said, but manufacturing jobs there still number fewer than they did before the 2008 recession. And while manufacturing — and Wisconsin as a whole — have largely recovered from that downturn, Taggert said that the more recent shedding of manufacturing jobs may indicate that an economic softening is inbound.

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