REGIONAL- A labor market analysis by the Minnesota Department of Employment and Economic Development (DEED) found that northeast Minnesota has experienced the largest decline in the state in nursing and residential care facility employment since the start of the COVID-19 pandemic.
The region lost 1,536 employees, 14.7 percent of the nursing and residential care facility employee base, from the pre-pandemic level in 2019. That was nearly double the statewide decline of 7.6 percent.
While the majority of that drop was related to people leaving the industry due to the trials of doing the work under highly restrictive COVID regulations and having to cope with large numbers of sick residents, another contributing factor has been the closure of care facilities. Since 2019, 32 nursing and residential facilities in northeastern Minnesota have shuttered their doors, 24 of them between 2021 and 2022. Employment in the industry dropped by 668 in 2022.
A large number of women and workers over 50 left the job market completely during the pandemic, due to a shortage of child care and older workers electing to take early retirement rather than subjecting themselves to environments where they were at greater risk of contracting COVID. With a smaller overall labor pool and an abundance of job openings, nursing and residential care facilities have had to raise wages in order to fill vacancies. The average annual wage in the industry has increased by 23.4 percent since 2019, six points higher than the average wage growth in the Northeast region. A portion of that increase can be attributed to emergency CARES act funding in 2020, and a $50 million boost from the Minnesota Department of Human Services allocated in 2022 to address staffing shortages at nursing facilities.
However, despite above-average wage growth, nursing and residential care facilities wages remain significantly lower than the larger health care and social assistance sector average, as well as the all-industry average of $22.57 per hour.
The reason the nursing and residential care facility sector continues to lag in overall wages is the proportion of its jobs that have traditionally been low paying. Home health and personal care aides, nursing assistants, and food servers represent over half of total employment in this sector, and all of those positions are paying $4 and more less than the regional median.
Only registered nurses and licensed practical nurses earn more than the regional median hourly wage, $37.92 and $24.51, respectively. Housekeeping workers are the lowest paid at $14.60, while food servers and personal care aides make around $15.50 per hour.
The pandemic exposed how much communities rely upon the services of nursing and residential care facilities. The pandemic also increased demand for workers in these facilities. As it is in many care-providing professions, pay is often lower than average, but has been rising faster than average over the past three years. Higher wages will aid in attracting the next generation of nursing assistants, LPNs, and personal care aides, although the industry will continue to face competition from higher paying jobs in other sectors of the economy. Demand for nursing and residential facility employees is expected to remain high as the population in Northeast Minnesota continues to age and makes greater use of those facilities.