Despite the Great Recession a few years ago, wages in Minneapolis have been steadily rising. As Figure 1 shows, the average weekly wages for Minneapolis increased from about $1100 per week in the fourth quarter of 2006 to just over $1300 in the fourth quarter of 2014.
An additional observation illustrates that the average weekly wages for Minneapolis were higher than both the metro area and Minnesota. And this makes sense. Wages should be higher in urban environments because of the potential for interactions between businesses, and workers and businesses. For example, Minneapolis’ six Forbes companies reside in the 3rd Ward, which is downtown Minneapolis; and they are all within a couple blocks of each other. And this does not count all the other businesses both small and large that benefit from the success of these six highly competitive firms.
Furthermore, the economic heart of Minneapolis, and the Twin Cities for that matter, is connected with Downtown St. Paul by way of the Green-Line (Light-rail) and the Minneapolis/St. Paul International Airport by way of the Blue-Line (Light-rail). This is not a direct cause of steadily increasing average weekly wages, but rather a possible correlation.
Finally, compared to the rest of the nation over this same time period, Minneapolis has been playing well above the average. According to the Bureau of Labor and Statistics,
From 2005 to 2014, [the] average weekly wages for all private industries increased from $779 to $986, or 27 percent.
It is clear from this data that the average weekly wages for Minneapolis workers were better during the middle of the last decade and is still better today. As a comparison for that same time period, Minneapolis average weekly wages grew from $1104 to $1329.
In the next article, we will compare the industry with the highest weekly wages of Minneapolis to the industry with the lowest weekly wages of Minneapolis during the 2006 to 2014 time period. Then we will compare those wages against the national average weekly wages to provide a more in-depth picture of how the workers of Minneapolis have been doing over the past ten years.
Matt Johnson is a writer for The Systems Scientist, and a mathematical scientist. You can connect with him directly in the comments section, and follow him on Twitter or on Facebook.
According to the 2014 list of Forbes 1000 companies, there are nine Forbes 1000 companies that reside in Minneapolis. However, after accounting for the political boundaries of Minneapolis codified by the city charter, and an argument challenging Forbes for the exact number of companies that belong to the Minneapolis system, Urban Dynamics proposes that there are only six Forbes 1000 companies in the Minneapolis economic system.
Here is the list of the six Forbes 1000 companies including their respective industries:
Excel Energy (Energy)
Target Corp (Retail)
Thrivent Financial (Financial)
U.S. Bank Corp (Financial)
Valspar Corp (Manufacturer of paint and coatings)
Again, this list does not include those Forbes 1000 companies outside of the political boundaries of Minneapolis. Those companies are Donaldson in Blaine, General Mills in Golden Valley, and Medtronic in Fridley. On the other hand, Ameriprise, Excel Energy, Target Corp, Thrivent Financial, U.S. Bank Corp, and Valspar Corp either reside on the light-rail blue line, which runs from Mall of America to Target Field, or they reside within a 3 to 4 block radius of the blue line in Minneapolis’ 3rd Ward (Downtown). In addition, they are all located within just a few blocks of each other; and their proximity to each other is what perpetuates the economic heart beat of Minneapolis.
According to the 2014 Forbes 1000 list, Minneapolis is home to nine Forbes 1000 companies: Target, U.S. Bancorp, General Mills, Medtronic, Ameriprise Financial, Donaldson Company, The Valspar Corporation, Xcel Energy, and Thrivent Finanacial for Lutherans. Forbes lists all nine companies with Minneapolis addresses. However, there is a discrepancy.
Indeed, six of the Forbes 1000 companies reside in Minneapolis proper, or within the Minneapolis political boundaries put forth by the Minneapolis charter. Matter of fact, all six companies are clustered together in the 3rd Ward of Minneapolis only a few blocks away from the birth place of Minneapolis itself – The Falls of St. Anthony. Three of these companies are located on the Nicollet Mall – Target, Excel Energy, and U.S. Bancorp. Their respective headquarters are within a hop, skip, and a jump from each other. The other three Forbes 1000 companies located in the economic hub of Minneapolis, Ameriprise, Valspar, and Thrivent, are located on 2nd Ave, South 3rd St., and 4th Ave, respectively. But there are three that reside outside of the Minneapolis political boundaries.
The Donaldson Company is located a good 10 to 15 miles outside of the most northern boundary of Minneapolis, near Blaine; General Mills is located a few miles west of Minneapolis right next to Golden Valley right off of the 169 and 394 interchange; and Medtronic, one of the most well-known medical device companies around, is located in Fridley, just a few miles North of Minneapolis. Why is this important?
First, Minneapolis has well established political boundaries. Within these boundaries, there are 13 Wards; and within these wards, there are dozens of neighborhoods. Second, there are cultural boundaries. In other words, each part of the city – Downtown, Campus (Southeast Minneapolis), South Minneapolis, Southwest Minneapolis, North Minneapolis, and Northeast Minneapolis – each have a personality. Together, these personalities make up the total personality of Minneapolis. In addition, these personalities interact with each other and interact with the politics of Minneapolis. These political boundaries provide a space for these respective cultural personalities to interact with the economic hub of Minneapolis. Similar to most other western cities, Minneapolis’ economic hub in centralized with respect to geography; and there is a dynamic behavior that resonates from this economic hub, thus interacting with the respective parts of the city. But there is also proximity.
Because of the respective locations of Donaldson, General Mills, and Medtronic, they do not experience the same interactive intensities as the companies in the economic hub of Minneapolis. This is because of their respective proximity to everything else. Think of it like gravity. The further away an object is away from a gravitational field, the less gravity the object will feel. This urban gravity could be the density of the population, the increased interactions of people due to the increased numbers of people, the rate of business traffic, the number of other businesses that exist near the corporation, and the increased number of potential opportunities due to proximity and exposure. There is also traffic: automobiles, buses, and light-rail.
Another way to think about this would be to consider a packed dance floor full of people. There is more activity and energy taking place at the core; whereas, there are less people with less energy on the outskirts of the dance floor. What part of the dance floor is better for business? What part of the dance floor is better for interacting with other people? What part of the dance floor increases potential and potential outcomes?
If the most basic definition of a system is its elements, the interaction between its elements, and the function of the system, then can Donaldson, General Mills, and Medtronic really be included in the general Minneapolis system itself? Can they really be considered to be interactive with the other economic elements of the city?
Should they be included in the economic system? Does the political system have the same boundaries as the economic system? The cultural boundaries are indeed not the same as the political boundaries. Perhaps there is an argument for including Donaldson, General Mills, and Medtronic into the economic system of Minneapolis? But then what about the smaller businesses that exist outside the city boundaries between Donaldson, General Mills, and Medtronic? Should they also be included?
An indicator of a healthy socioeconomic environment is the physical environment itself. In urban dynamics, it is referred to as the attractiveness of the city. This attractiveness is such things as lakes, creeks, rivers, and parks. South and Southwest Minneapolis certainly have most of these, if not more. Other attractive things are employment opportunities, educational opportunities for both children and adults, low crime rates, and a healthy infrastructure. These are certainly not all of the possibilities of attractiveness. But what does not help perpetuate upward mobility for its citizens is the opposite – the unattractive things.
For example, North Minneapolis experiences some of the highest unemployment rates in the city of Minneapolis, higher crime rates, and a lack of competitive educational opportunities for both adults and children. Whats more, North Minneapolis experiences the highest level of blight in the Minneapolis system. According to the current report of Minneapolis Trends: A Quarterly Overview of Socioeconomic & Housing Trends in Minneapolis, a quarterly publication by the City of Minneapolis, the highest concentration of condemned and vacant buildings in Minneapolis are located in North Minneapolis in Wards 4 and 5. And it’s a striking concentration with serious socioeconomic consequences.
To add to this urban decay and decrease in attractiveness, North Minneapolis is experiencing a greater number of foreclosures than any other part of the city. For example, in North Minneapolis Ward 4 and Ward 5 experienced a 28 percent and 12 percent foreclosure rate in the first quarter of 2015, respectively. This is by far higher than any of the other wards in Minneapolis. And this is not a one time deal. Since the first quarter of 2014, both Ward 4 and Ward 5 have continuously experienced double-digit foreclosures in their respective neighborhoods. They have led all other wards in the percentage of foreclosures and total number of foreclosures despite the overall decrease of foreclosures in the city of Minneapolis (see the foreclosures’ graph).
Now what is a resident to make of this situation? First, the high percentage of foreclosures means that there is less cash flowing through the sub-system of North Minneapolis than any of the other neighborhoods: Northeast Minneapolis, South Minneapolis, and Sourthwest Minneapolis.
Second, urban blight and crime are correlated. Blight and unemployment are correlated. And finally, crime and unemployment are correlated. But more than that, those three things keep potential businesses, both small and large, potential consumers, and potential investors from pouring money, time and energy into North Minneapolis. Again, this adds to the decrease cash flow through the environment of the sub-system.
This also perpetuates the depression of economic and educational opportunities for current North Minneapolis residents. This is not to say that North Minneapolis does not have anything to offer. Nothing could be further from the truth and this article should not persuade the reader to think otherwise. But the discrepancies and the neglect of such discrepancies will remain in the consciousness of all Minneapolis residents until such environmental discrepancies as urban decay are addressed. If not, the good that is North Minneapolis will continue to be overlooked.
Minneapolis is currently experiencing a beautiful, warm, and sunny day in terms of economic stability and vitality. It currently has 9 Forbes 1000 companies, which is the most per capital of any city in the United States. It has a good complement of both industry firms (businesses), small and large, and a good complement of labor and management (workers) in the services, financial, energy, engineering, manufacturing, and science related industries. For the most part, Minneapolis is experiencing good economic news. It is sporting about a three and half unemployment rate. However, there are some discrepancies in the system environment that still need to be addressed. There are some areas of Minneapolis that are still neglected relative to the rest of the city and lack economic and educational opportunities. But there is good news for workers in the market place.
In a recent article published in the Star Tribune, a local Minneapolis paper,
Restaurateurs across Minnesota are facing a growing shortage of workers at the same time a boom in restaurant openings is creating even more need for servers and cooks. The state’s food service industry, which offers new hires a median wage of $9.11 per hour, this summer had the most openings since 2001, 44 percent more than a year ago.
This is a good indicator of the health of the current Minneapolis market place. As of the first quarter of 2015, and according to the Minnesota Department of Employment and Economic Development, the Accommodation and Food services sector, which is a part of the Leisure and Hospitality supersector, provided 25,028 jobs. This is about 8.1 percent of the total jobs in Minneapolis and it appears that the restaurant industry demand is increasing. Now labor just needs to catch up and supply the workers. So where shall this supply of workers come from? Can Minneapolis supply it?
As good of a problem as this excess of restaurant jobs may be – more jobs than workers is always a better problem to have in any industry than the reverse – this still does not address some of the discrepancies in the Minneapolis market place or how such discrepancies will be addressed. This is because there are certain parts of Minneapolis that still face higher unemployment rates, a less educated work force, and, therefore, a less competitive work force.
There is a minimum education for any industry, but if an industry is looking for employees, for example the Restaurant industry in Minneapolis, there are more than 65,000 unemployed potential workers to draw from who reside in Minneapolis and a good number of these unemployed workers reside on the north side.
This is because North Minneapolis experiences some of the highest unemployment rates in the city of Minneapolis. A possible and immediate solution to this policy challenge is to somehow bridge those unemployed persons in North Minneapolis with the restaurant industry. If that industry is looking for employees, then it has a base of good people to draw from. But by no means is this a permanent fix. Because of decades of neglect and the lack of economic and educational opportunity, long-term solutions will take systemic and dynamical policies. What is meant by systemic and dynamical policies? Well that is something that will take time to explain. The world is a complex place and North Minneapolis is no exception.
In the mean time, there is a more important concern. If the restaurant industry decides to seek out those more likely to be unemployed, for example, “black” Minnesotans, who are about 4 times more likely to be unemployed than their “white” counterparts, then how will the industry create access to such opportunities? The restaurant industry faces communication and transportation obstacles. These remarks will be clarified in future articles. These are some of the challenges of urban dynamics.