MINNEAPOLIS, August 22, 2003—Productivity is a key component of economic development, and labor productivity, in particular, is closely tied to the quality of the labor force and educational institutions. Research says so, and Minnesota firms agree, according to a mid-summer workforce survey conducted by the Federal Reserve Bank of Minneapolis.
Most Minnesota businesses concurred that labor quality is a top consideration in deciding where to locate and expand. Respondents also indicated that Minnesota workers perform better than workers in other locations.
A majority of the more than 600 Minnesota businesses responding to the survey indicated good to excellent availability of both high-skilled and low-skilled workers. A question about worker quality revealed that the quality of high-skilled workers was significantly more favorable than the abilities of low-skilled workers with no more than a high school diploma.
This is significant, given that 74 percent of responding establishments agreed that labor quality is a top consideration in making location and expansion decisions, and the fact that low-skilled workers still constitute close to half the workforce, said Toby Madden, regional economist, at the Minneapolis Fed.
Respondents revealed an overall confidence in the effectiveness of Minnesota educational institutions in providing their companies with qualified workers.
More than half of the respondents agreed that government should be involved with early childhood education, ensuring that children are ready to learn by the time they start kindergarten. Meanwhile, 43 percent indicated that funding for such programs specifically targeted to at-risk children should be increased, while only 15 percent thought it should be reduced.
When asked about the outlook for employment and wages, nearly 85 percent said they expect steadiness or increases in employment for the remainder of the year. About half said they anticipate a 2 percent to 3 percent overall increase in wages and salaries over the same period.
See complete survey results.
As one of the 12 Federal Reserve Banks, the Federal Reserve Bank of Minneapolis
contributes to a variety of Federal Reserve System functions, including
operation of a nationwide payments system, distribution of the nation's
currency and coin, supervision and regulation of member banks and bank
holding companies, and serving as a fiscal agent for the U.S. Treasury.
Additionally, the president of Minneapolis Fed serves as a member of the
Federal Open Market Committee, the monetary policymaking arm of the Federal
Reserve's Board of Governors.