On Nov. 4, 2022, The Economist published an article reflecting on Northfield’s 1.2% unemployment rate — the lowest in the United States at the time. Such a low unemployment rate may seem like a good problem, but in reality, it comes with a breadth of its own issues. Since November, the unemployment rate in Northfield has changed marginally — if at all — and the local business community continues to wrestle with the challenges that it brings. Namely, there are simply not enough people to fill job vacancies; even ones vitally important to a functioning society, like teachers, healthcare workers and police officers.  

Low unemployment is a problem facing the whole country. The U.S. Department of Commerce reported on Feb. 3, 2023 that unemployment is at its lowest level in 54 years — 3.4%. As of Dec. 2022, Minnesota could boast an unemployment rate almost a whole percentage point below the national average at 2.5% — positioning Minnesota’s state-wide unemployment rate as the fifth lowest in the country. 

But Northfield’s unemployment rate is significantly lower than both the national average and the Minnesota average. There’s no easy way to pinpoint what has allowed Northfield to settle into this position, but Faress Bhuiyan — Associate Professor of Economics and Chair of the Economics Department — reckons it’s a lot of the same things driving low joblessness in the country at large, most notably a labor supply shortage. Bhuiyan offered three potential reasons for the labor supply shortage affecting Northfield: collateral from the COVID-19 pandemic, reduced immigration from the southern border and a lack of affordable housing in Northfield. 

On the lingering effects of COVID, Bhuiyan said: “COVID has made some folks decide not to join the labor force. It could be the realization of the value of staying home. It could be the COVID checks that, in conjunction with less spending in previous years, have given meaningful savings.” 

When schools and in-person work were canceled at the beginning of the pandemic, parents were forced to stay home, cutting childcare costs and allowing for a preferable work-life balance. In this epoch, families were also spending less on eating out, entertainment and shopping. Combined with COVID-19 stimulus checks, personal savings skyrocketed. A result felt today, according to Bhuiyan, is “that some individuals are not settling for [undesirable] jobs and the pressure to go get a job is less.”

Additionally, many older workers left the workforce in 2020, at the height of the pandemic, never to return. Unwilling to risk their health by working through the most tumultuous and uncertain stages of the pandemic, early retirement was an option preferred by many. 

Carleton College’s own recruitment team corroborated this effect of the pandemic, stating that “We noticed during the pandemic that some candidates removed themselves from the job market to take care of family members while schools and care centers were closed. Others reported that the uncertainty caused by the pandemic made them hesitant to change employment.”

As a result, the applicant pool at Carleton — one of Rice County’s largest employers — is smaller than it has ever been.

To adjust to the unusually small applicant pool, the recruitment team has made modifications to the application and hiring processes. They described these changes: “At times we find [that] we need to leave positions open longer to develop the pools. We spend more time sourcing applicants through social media … We expanded our advertising to cast a wider net among other labor markets with an increased focus on Carleton’s IDE initiatives. We also have looked at adjusting positions to make them more attractive to applicants (i.e., adjusting full-time status to part-time to provide flexibility or combining two part-time positions to create a full-time position).”

Dan Flaherty, owner of Flaherty’s Northfield Lanes, has also faced trouble with staffing since purchasing the bowling alley at the beginning of September 2021. “While we have been fortunate to have a number of key managers and other staff members, many of whom had been here with the previous owners and that have done a great job in getting us through the first year and a half of operating as Flaherty’s Northfield Lanes, finding and maintaining quality help that was committed and reliable has been an ongoing issue.”

However, Flaherty noted that there has been a shift in hiring patterns since opening the doors a year and a half ago: “It seems, when first trying to staff, it was tough getting people in the door. Maybe people were still skittish during the COVID ‘pandemic’ and the uncertainty of the economy. It seems to have gotten much better in the last several months.”

While things seem to be improving for Flaherty’s Northfield Lanes, one long-term solution for the problem at large could be drawing from other labor pools. Located an hour or less from Minnesota’s largest metropolitan areas — the Twin Cities and Rochester — Northfield could theoretically draw from these labor pools, but herein arises another complication: unaffordable housing. 

Bhuiyan explained the root of this problem in Northfield: “Since COVID, there has not been a lot of new construction [in Northfield]. Given the high interest rates in recent years, the real estate market has not been churning out new homes. This means that, as a town like Northfield tries to grow, there is not enough housing. As a result, the rent and prices of buying new homes becomes unaffordable for new workers to move into Northfield.”

While there may be many well-qualified and interested candidates for jobs in Northfield from the Twin Cities or Rochester, they can’t afford housing, and the commute is sizable enough to serve as a deterrent to accepting a job in Northfield. 

Additionally, a substantial portion of Northfield’s labor force is dependent on the immigrant population — which has been severely restricted, beginning with the Trump administration’s staunchly anti-immigration stance. In the early 2010s, Minnesota welcomed around 15,000 immigrants a year. In 2022, Minnesota’s population only grew by 5,713 people — not all of whom were even immigrants.

In the end, Northfield’s low unemployment rate is largely a reflection of its labor supply shortage. And while among the negative effects are strain on all industries, if housing isn’t an issue and you’re looking for employment in Northfield, your search will likely be fruitful. 

But despite the relatively severe case of low unemployment that Northfield is facing right now, Professor Bhuiyan reminds us that “although there are local peculiarities, this is not a local issue.” Instead, a national one. 

Photo courtesy of Carleton College archives.