After more than a year of fluctuation and uncertainty in economic conditions in the MSP region and across the country due to the COVID-19 pandemic, the region has entered a true turning point toward solid and sustained recovery. Jobs are returning, as public health regulations and risk continue to lessen, and early signs of recovery are evident in the data.

However, challenges remain, as economic recovery is being experienced differently across communities, sectors of the economy, and individuals throughout the region. The GREATER MSP Partnership is committed to and driven by its mission to accelerate inclusive economic growth in the MSP region, especially as we recover from a significant shock to our regional economy, and as such, we continue to track disparities in short term and long term impacts of the pandemic.  

Take a look at what we’re seeing in the MSP Regional Recovery Hub!

COVID CASE LEVELS have stabilized, and vaccination rates have increased significantly since vaccines became available to the general public. MSP is now seeing just 81 average daily COVID cases across the 15-county metropolitan area, and case levels have decreased steadily and significantly each week, from 1,385 average daily cases in mid-April, to just 81 average daily cases in the second week of June. The share of the region’s population that has received at least one vaccine dose is now 56.7% (as of June 18^th), and increased by 8 percentage points in the month of May alone. Most restrictions on businesses have been lifted or loosened, leading to increased business activity and employment levels for organizations across the region.

TOTAL REGIONAL EMPLOYMENT has increased each month for four months, and in May, there were 8.4% more jobs in the region than in May of 2020. Though monthly employment levels remain 6% below pre-COVID (May 2019) levels, the level of decline from pre-COVID employment is not as severe in MSP as in larger peer metros such as San Francisco, Boston, and Chicago. Further, the total number of unique job postings in the MSP region in May was 71,057, the highest level of monthly job postings the region has experienced in at least four years, according to RealTime Talent & Gartner TalentNeuron Recruit data. This is a strong and positive leading indicator that employer demand is increasing and employment levels will likely continue to rise.

THE LEISURE AND HOSPITALITY SECTOR IS RECOVERING QUICKLY.  Because of state restrictions and capacity limits on bars, restaurants, entertainment venues and travel options, this sector was by far the most severely impacted by the COVID-19 pandemic. However, recent employment growth in the region is largely attributable to the leisure and hospitality sector, which experienced the largest monthly increase in employment each month for the last several months. In May, employment in the sector increased by 11.3%, returning over 15,700 jobs to payrolls. Employment at full-service restaurants increased by 7.5% from April. In May, we also saw regional hotel occupancy increase to 43.5%, the highest level experienced in the region since the pandemic began.

SMALL BUSINESSES ARE DOING BETTER. According to homebase data, for the last seven weeks, MSP has maintained the highest levels of small business employment in comparison to pre-COVID (January 2020) levels, amongst all twelve peer regions tracked in the Regional Recovery Hub. In the latest week of data, MSP’s small business employment levels are merely 3% below January 2020 levels, whereas large peer metros such as San Francisco and Chicago are still seeing levels more than 22% below pre-COVID levels. The recovery of these businesses is vital to economic recovery for the region overall.

STILL, WE HAVE WORK TO DO. While many of us are feeling revived and returned to “normal” to some degree, it is important to remember that recovery will be experienced differently across individuals, communities and industry sectors in the region. Many are still experiencing impacts on family life and wellbeing, and on personal income and employment situations, and though much of the data looks positive, there are warning signs to watch:

• Unemployment Insurance Claims have dropped steadily and significantly for the last several months, but the share of BIPOC workers filing claims has risen dramatically, from 19% in March 2020, prior to the beginning of the pandemic, to 42% in May of 2021. Contextually, this far surpasses the overall share of proportion of workers in the region that are BIPOC (24% in the seven-county region, according to ACS estimates). Further, according to an analysis of UI claimant data by Minnesota DEED, Black Minnesotans have experienced the longest average period on unemployment insurance since the start of the pandemic in March of 2020. Research shows that being out of work for a prolonged period is associated with lower well-being among workers, their families, and their communities.   
  
  
• We know that BIPOC individuals and families were disproportionately impacted by job and income loss during the pandemic, largely due to the fact that BIPOC workers are more heavily concentrated in the industries that were hardest hit by the pandemic. A 2020 analysisby GREATER MSP showed that 40% of BIPOC workers in the region were employed in retail trade, accommodation/food service, and healthcare. We also know that a significant wage gap exists in our region; according to the most recent estimates from Census data, median wages remain 32.7% higher for white workers than for workers of color. To achieve a truly inclusive economic recovery, we will need to keep this at the forefront of our collective work and consider how we may seek to accelerate growth that is more equitable in the long term.
  
  
• Housing and food security remain a concern even as the pandemic winds down, and the data shows continued cause for concern in terms of housing affordability. Though the share of affordable homes has been declining relatively consistently throughout recent years, the most recent data has shown an accelerated decline this spring and summer, far below levels experienced in nearly 20 years, according to Minneapolis Area Realtors. Whereas the share of homes sold in MSP for less than $250,000 remained between 35% and 50% in 2019, the share has dropped in May and June to 20% or below, for nearly seven consecutive weeks.

Even as the region progresses toward economic recovery and jobs return, long term impacts of the pandemic will continue to be felt across the region. In many ways, the regional economy is adapting and transforming in new and hopeful ways as a result. MSP Transforming is a digital series that explores how the region is changing through stories and voices of innovative leaders across our region who are working on the frontier of these transformations. 

For the latest data and insights into how economic recovery is progressing in MSP, and to learn more about how recovery is being experienced across various communities and sectors, visit the MSP Regional Recovery Hub.