Impact of Business Closure on Wages

Job market

The Minnesota Department of Employment and Economic Development maintains wage information for a variety of geographies in the state. The most frequently updated and current data set is the Current Employment Statistics (CES).

Because of the size of the Mankato-North Mankato Metropolitan area (comprised of Blue Earth and Nicollet Counties), some information is redacted for confidentiality purposes. The only wage data available within the CES data set is for the Private Business industry sector.

What is seen in the data confirms what one would suspect in a tight labor market: laid-off workers are seeking the higher paying jobs…and they are finding them.

During the first quarter of 2017, 3 different retail employers announced closures due to national trends in online purchasing. In February 2017, the average wage within the metro jumped up by over 10% ($2.21 increase up to $24.20/hr). Later in the 4th quarter of 2017, Quad Graphics in Waseca announced their closure. Correspondingly, employers within the metro were eager to scoop up newly available labor and the average wage in the marketplace again rose by 8.2% ($1.93 increase up to $25.03/hr).

This wage growth showcases that prospective employees are finding jobs with employers who are paying a higher wage that aligns with their industry sector and business plan.

Year Over Year Hourly Wage Increase
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Avg.
$0.99 $2.21 $0.92 $0.75 $1.20 $0.35 $0.72 $1.12 $1.36 $1.93 $1.56 $1.44 $1.21

Below is a summary of the percent increase for each month between 2016 and 2017 for hourly wage:

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Avg.
4.37% 10.05% 4.00% 3.24% 5.30% 1.50% 3.11% 4.90% 5.75% 8.22% 6.66% 6.04% 5.26%

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