Unionized physicians, physician assistants and nurse practitioners picketed outside Allina’s Coon Rapids clinic on June 3, 2025. (Photo by Max Nesterak/Minnesota Reformer)
Minnesota is a good place to be a worker, with higher wages and union density than the nation along with lower unemployment. But there are growing challenges. Housing costs are rapidly increasing, child care is among the most expensive in the country, and an aging workforce threatens economic growth while straining taxpayers tasked with caring for those who need it.
President Trump’s agenda of massive federal cuts, high tariffs and immigration crackdowns has frozen the job market in uncertainty, and Minnesota’s jobless rate reached the highest level in nearly four years this summer.
Here are five charts on the state of labor in Minnesota.
Wages are higher in Minnesota than most other states
Minnesotans earn the highest average hourly wages in the Midwest — and the 8th highest in the country — while enjoying a relatively low cost of living compared to the coasts.
The average Minnesota worker earned $37.58 per hour in 2024, compared to $32.66 nationally, according to the Bureau of Labor Statistics. For most, that’s more than enough to meet the basic cost of living — housing, food, transportation and health care — with money left over to go out to dinner, save for retirement and take a vacation.
According to the state Department of Employment and Economic Development’s cost of living calculator, a single person with no kids needs to earn around $18 an hour while a family of four with one working parent needs to earn around $33 per hour to afford the basics.
Wages have generally matched or outpaced inflation over the past several decades. Although high inflation coming out of the pandemic eroded many workers’ buying power, wage growth has since caught up. Low-wage workers — particularly those in nursing homes and food service — benefited the most from a tight labor market, which has pushed wages up much more quickly than inflation in recent years.
Even so, rising costs for housing and child care are stretching family budgets and souring many workers’ view of the economy. The median income is enough to afford the median-priced home in the state, but rents and home prices have been rising faster than incomes.
Child care is also more expensive in Minnesota than most other states, according to research by the Economic Policy Institute. On average, infant care in Minnesota costs $22,000 per year — about 20% of the median household income.
Minnesotans are working and finding jobs
Minnesotans are working — or looking for work — at some of the highest rates in the country with a labor force participation rate of 68.2% compared to 62% nationally. Unemployment — the share of people looking for work — is also lower than the national average.
The share of adults working rose steadily through the 1970s, ’80s and ’90s, as more and more women entered the workforce. Women in Minnesota work at some of the highest rates in the country, though the price of child care and persistent gender pay gap means women are more likely than men to stay at home to care for children or other family members.
The labor force participation rate has not returned to pre-pandemic levels of around 70%, in large part because many older workers retired in the pandemic and never reentered the workforce.
The continual aging of the population foreshadows difficulties in the labor market ahead. Employers will have to raise wages, but they will also need to lean into automation and hope the state can attract more out-of-state migrants or immigrants.
Union membership is high compared to the rest of the country
Minnesota consistently has among the highest rates of union representation in the country owing to its pro-labor tradition and relatively favorable organizing laws. The higher unionization rate contributes to the state’s relatively high median wages.
High union membership doesn’t just benefit union workers. Research shows that as union membership increases in a given industry, so do nonunion wages because of increased pressure on employers to raise pay.
Still, the story of unionization in Minnesota and the nation as a whole has been one of steady decline over the past half century. More than 20% of Minnesota workers were represented by a union in 1990 compared to less than 15% today.
Union leaders blame the decline on federal laws hostile to organizing and a lack of meaningful enforcement against unfair labor practices. While unions have been enjoying a surge in popularity since the pandemic, enthusiasm alone has yet to change the long-term decline of union membership.
Income inequality persists
By some measures, income inequality got worse in the pandemic years, with the top 10% of earners taking home 37% of Minnesota’s total income in 2023, up from 35% in 2020. Meanwhile, the bottom 10% of earners take home a meager 1.9% of the state’s income, a figure that has stayed more or less the same for the past decade.
Minnesota’s Gini coefficient — a metric of inequality that ranges from 0, representing exact equality, to 1, representing one person making all the money — has also gotten slightly higher in recent years but remains the same or lower than our neighboring states.
The Bureau of Economic Analysis has yet to publish state-level data on income distribution for 2024 and 2025, so we’ll have to wait to see whether high wage growth for lower-income workers will help address inequality in Minnesota.
Education, health services and construction jobs are growing
Despite a slowdown in jobs recently — with over four thousand jobs lost in July — Minnesota has seen a 1.1% increase in jobs over the past year, a little more than the nationwide 0.9%.
The highest job growth is in education, health services and construction. Elementary and secondary school employment growth is especially strong, with an 8% increase in jobs since last year. Meanwhile, the financial and information sectors have seen a loss in jobs, with the state’s telecommunications sector losing nearly 5% of its jobs, in line with national trends of layoffs at telecom companies from organizational restructuring and possibly AI automation.
Government job growth has also slowed down from last year, especially at the federal level, as Trump slimmed the federal workforce through mass buyoffs and layoffs. Minnesota’s federal workforce saw a sharp downturn in the month of April — a loss of 500 jobs — coinciding with the timing of a second wave of buyout offers from the administration.
“We may now be seeing results of mass federal layoffs and funding interruptions, erratic tariffs and shrinking immigration,” said Matt Varilek, the Commissioner of Minnesota’s Department of Employment and Economic Development, in a recent press release.