Job openings decreased throughout Minnesota in July, leaving University of Minnesota students and recent graduates to enter a more competitive job market.

Minnesota’s job market has largely recovered from the pandemic, which means fewer job openings and less hiring, according to Assistant Director of Minnesota’s Labor Market Information Office Oriane Casale. 

In March 2022, there were more than 12 million job openings nationwide — the peak of pandemic recovery in the labor market, according to data from the U.S. Bureau of Labor Statistics. Job openings have steadily decreased over the past two years, hitting just over 7.6 million non-farming job openings in July.

Minnesota lost about 41,000 job openings between June and July, a notable decrease in opportunities, according to Bureau of Labor Statistics data. 

Casale said Minnesota’s labor market is still strong with unemployment ticking up at a lower and slower rate and more job openings per worker compared to the U.S. overall. 

“We have been hearing more and more that it is harder to get those sorts of first professional jobs which may be a sign of the labor market slowing a bit,” Casale said. “Employers are possibly a little bit anxious about hiring new folks that they know they're going to have to maybe spend some resources training.”

Minnesota’s seasonally-adjusted unemployment rate was 3.3% in August, below the national rate of 4.2%, according to data from the Minnesota Department of Employment and Economic Development (DEED). Although full-time University students do not count toward the unemployment rate, they are still affected by employment troubles.

Casale said slowing employment rates and higher ratios lead to a more competitive job market as more people vie for fewer jobs.

“It's kind of easy for us to, big picture, say you want that one-to-one ratio,” Casale said. “But for you as a job seeker, that might be less than ideal.” 

Students are feeling the effects

Joseph Nelson, a first-year University student and St. Paul native, said he switched summer jobs because he was being scheduled for fewer hours than the amount promised by his employer. 

“A ton of my friends had job issues and the majority of the cases were they were stuck at their, I don't want to say bad jobs, but more challenging jobs, either not getting enough hours or not getting close to enough pay,” Nelson said. “Some that did look for other jobs weren't able to get any.”

Casale said many older workers were attracted to wage and benefit increases that employers offered to make up for pandemic staff losses. Employers, meanwhile, were attracted to older workers with more flexible hours and experience.

“Because the labor market's tightening up a little bit, they just have more options of who to hire,” Casale said. “Not that college students aren't an awesome workforce, but employers have to balance that, you know, ‘Am I gonna lose this college student next summer because they're going to go off to their first professional job?’” 

Nelson said he ended up working in a warehouse for most of his summer, a position he does not think he would have gotten without a family connection.

“If I hadn't gotten that job, I wouldn't have been able to come here (to the University) mainly because there's no other job that guarantees more than 40 hours a week that we were able to find and give enough pay,” Nelson said. “It just was not there.”

Casale said the current job market students are dealing with is not abnormally competitive. It is more similar to pre-pandemic markets as employers have largely recovered from staffing shortages.

“(Employers) were hiring thousands of workers every month, for months and months and months and months,” Casale said. “Then all of a sudden, that really has totally tapered off now because they're basically back to where they need to be, so now it's just that regular turnover and churn.” 

Nelson said he, like many of his friends, worked a few jobs throughout high school and the pandemic at a chain restaurant, a coffee shop and a warehouse this summer.

Casale said employment rates for ages 16 to 19 increased considerably during the pandemic, an unusual trend that has not been seen since the 1990s.

“A bunch of people who worked in food service and retail and all those things that were older, they left and they got that $300 or whatever a month (unemployment) benefit,” Casale said. “It opened up all of these jobs for teens and so they really filled the void, so that really increased the labor force participation of that age group.” 

What about first professional jobs?

It is not just minimum wage jobs that are experiencing problems. A first professional job is likely harder to come by for a newly graduated University student, Casale said.

Employers could be more reluctant to hire first-time professionals because they have the option of hiring applicants with more experience after the pandemic, which is how employers generally respond to the job market tightening, according to Casale.

Executive Director of Career Services for the University System Sara Newberg said University career fairs have seen an 8% increase in employer involvement this fall and in job postings on Handshake. 

“It's hard to look at those numbers and say that we're seeing a huge problem,” Newberg said.

A survey conducted by the National Association of Colleges and Employers in the spring found overall hiring projections are down 5.8% from last year. However, survey results also indicated employers would increase or maintain hiring for the class of 2024.

Employment struggles are not equal across all industries.

Construction, manufacturing, financial services and some trade sectors in the state dipped in employment from July to August, according to DEED data. Construction decreases are likely related to high federal interest rates, according to Casale.

Casale said healthcare facilities like hospitals, nursing homes and childcare also struggled to hire employees after the pandemic. Education and health services had notable increases in job openings, gaining 4,200 jobs in August, according to DEED data.

Newberg said gaining any type of work experience during college, such as volunteer work and service jobs, can help students prepare for the job market after graduation and make them stand out to employers.

“The old adage of 'control what you can' is so important, so control that you have a career plan and a backup career plan that you could pivot to, and work with the (University) resources,” Newberg said. “We get so focused on internships, which are really helpful, but also our employers tell us that just basic job experience is really valuable to them.”

Newberg added that persistence is key for students who face challenges finding a job after graduation.

“I've seen students who are really talented just have some kind of bad luck, just things that should work out, don't work out,” Newberg said. “They just stick with it until they get there.”

Casale said while Minnesota’s job market has slowed from pandemic recovery, she remains optimistic.

“It’s still a job seekers market,” Casale said. “People can still expect to find opportunities.”