Worker experience: Low wages top list of employment barriers in Minnesota survey

Labor shortages have been around long enough to now be familiar, certainly to businesses looking for help.

But one of the persistent mysteries is how or why some job seekers have been unable to attain a job of their liking.

As part of its ongoing effort to better understand current labor markets from workers’ point of view, the Minneapolis Fed partnered with two career centers in central Minnesota on a survey to learn more about workers’ preferences and the obstacles they have faced in finding a preferred job.

The survey revealed the most common barriers for job seekers and would-be job seekers have been low wages for available jobs, high job requirements, and loss of government assistance. At least 1 in 10 workers surveyed deemed each of these to be significant challenges.

Tammy Biery, executive director at Career Solutions in St. Cloud, Minnesota, said it feels like the barriers are more challenging now than before. “I’ve heard that employers are still going to job fairs, still pursuing candidates, but they’re not hiring as much as they were,” she said. “They’re still out there, and if a really good candidate comes along then they’ll snatch them up. But I don’t think that the urge to hire on the employer side is as dire as it was a year ago.”

Nearly 250 workers responded to the survey between November 2022 and March 2023 at the offices of Career Solutions and Monticello-based Central Minnesota Jobs and Training Services (CMJTS). Survey respondents leaned more female and younger than the labor force as a whole.

Barriers to employment

A young central Minnesota mom who took the survey said that, when she got a job, her county drastically reduced food assistance for her family of three. But, even with her partner working, their household income was less than it had been when she was unemployed, making it harder to pay for necessities such as food and child care.

She’s since quit because of a debilitating health condition and applied for more assistance.

“I would be more than happy to give up assistance for a good job—and it’s my goal to—but most of the jobs in my area don’t provide the hours or pay I need for that to be feasible,” she said.

She, like 1 in 5 workers surveyed, listed low wages from available jobs as a significant challenge. This is the most common significant barrier to employment among all respondents (Figure 1) as well as most demographic groups tracked by the survey, such as women, all racial groups, people younger than 55, and people of all income levels.

The emphasis on wages is consistent with past Minneapolis Fed surveys, which found higher wages were the most important goal for job seekers despite all the talk in recent years of workers prioritizing work-life balance.

Notable exceptions include single parents for whom affordable child care was the top barrier, people unable to hold steady jobs for whom health issues and potential loss of government assistance were tied for the top spot, and those older than 55 for whom discrimination, especially ageism, was the top.

Older workers who lost their jobs have complained about age discrimination, said Leslie Wojtowicz, development manager at CMJTS. This is likely because their employers cut costs by letting go of the highest-paid workers, who are usually older workers, she said.

Workers of some demographic groups reported more significant challenges in barriers to employment than were reported by others. For the most part, this difference reflects well-known economic disparities among these groups. Members of racial and ethnic minority groups reported more barriers than White respondents; women, who are often responsible for child care, reported more barriers than men; those who earn less reported more barriers than those who earn more (Figure 2).

“There are jobs available but not all of them are accommodating to single parents with little to no support system in the community,” said a mom with a part-time job who relies on government assistance. She dreams of a full-time job, but her daughter has a disability and she has not found a child care provider who can care for her daughter, which means she must provide the care, she said.

Survey results also showed some patterns that seem to defy disparities. For example, those with fewer than four years of college reported more barriers than those who never went to college. But, in this survey, those with some college were more likely to have low incomes and have children, which does align with common economic disparities.

Bridging a gap between job seekers and employers

Don Hickman, vice president for community and workforce development at central Minnesota’s Initiative Foundation, said his organization sponsored the survey because he was concerned with the sharp decrease in labor participation around the nation, including in Minnesota, after the start of the pandemic.

The sponsorship paid respondents a small amount for their time and insights; this survey is unique among Minneapolis Fed surveys in that regard.

Labor force participation is the share of an area’s population that’s either working or looking for work. After the pandemic, many older workers chose to retire, which shrank the labor pool and gave the remaining workers more leverage. At the same time, the trauma of the pandemic gave rise to new expectations among workers.

The problem is that employers and workers aren’t always on the same page, according to Hickman. “Do workers understand the conditions under which they can be employed? And conversely, do employers understand the conditions workers are looking for?”

The survey helps fill the information gap and helps those involved in workforce development facilitate job matching, for example, through the career counseling and training offered at career centers like Career Solutions and CMJTS.

Workers who need training to get that higher-wage job can get an assessment to learn what fields they might do well in and then have a training curriculum customized for them, according to Biery. For example, someone who wants training to be a nurse but can’t afford to go back to school full time can take just enough courses to enter the field as a certified nursing assistant. They can take more courses in the future to advance their nursing career.

She and Wojtowicz said they learned through conducting the survey that not every job seeker knows these services exist.

“I'm glad we did the survey,” Wojtowicz said. “A lot of the issues that people shared—if they’re eligible for [our] programs, we can help to a certain degree. Getting the word out and having people engage with us more was one of the takeaways.”