There is a common story told that Region Nine’s college students migrate to the Minneapolis-St. Paul area after graduation to earn a higher wage. While in some instances this is the case, it is not completely accurate across the board. There are opportunities in the Region Nine area to earn a competitive wage and live comfortably. This alternative story is shown by taking a deeper dive into the data behind where the Mankato/North Mankato area compares to the Minneapolis-St. Paul area and where the college students are going.
Among the 582 unique classifications of occupations in the Mankato area, 52 earned higher wages than the Minneapolis-St. Paul-Bloomington area in 2015. For example, family and general practitioners earned an average salary of $247,618 annually in the Mankato area. By comparison, the same occupation in the Minneapolis-St. Paul area earned $59,485 less annually (11.9 percent). In total, those 52 unique occupational groupings included an estimated 6,650 jobs during the second quarter of 2015. This 13.2 percent of the total number of estimated jobs is significant because they earn wages greater than the average wage of all jobs in the Mankato area.
In all, the average Mankato area occupations paid $20.45 per hour. Of the 52 unique occupations, however, 29 paid higher than the average wage. Those 29 occupations represent a broad cross-section of the regional economy, ranging from food service managers to dentists. Consequently, they account for 1,540 estimated jobs (or nearly one quarter of all jobs that pay a wage higher than the Minneapolis-St. Paul area). View Mankato-North Mankato MSA Wages compared to Minneapolis-St. Paul area.
Assessing existing jobs is one thing, recruiting new workers to fill them is another. The challenges inherent in retaining local graduates in a community does not extend merely to wages. Minneapolis and St. Paul are alluring to college graduates for many reasons due to the amenities and comforts inherent in most large metropolitan areas. Those amenities include: immediate access to multiple fortune 500 companies, professional sports teams, art exhibits, zoos, and one of the largest shopping malls in North America. Minneapolis and St. Paul, however, also have a much higher cost of living.
Among three leading indicators measured by the Cost of Living Index, the Mankato area pays higher healthcare costs than either Minneapolis or St. Paul. All other indicators – grocery, housing, utilities, and transportation – cost less in the Mankato area. (See Table 1) Because costs of living are lower in the Mankato area, people that live and work in the Mankato area should be able to live comfortably for less than the Minneapolis-St. Paul area. This negates the notion that workers who migrate to the Minneapolis-St. Paul area will automatically earn higher wages. For example, the cost of living in the Mankato area is approximately 12 percent less than in the Minneapolis-St. Paul area. Consider the 12 percent difference on a $50,000 annual salary. The difference would amount to $6,000. Couple that with the fact that Mankato area residents who may migrate to the Minneapolis-St Paul area will pay nearly $80,000 more to live in a $250,000 home (31.5 percent higher than Mankato area), pay a couple dollars more to stock the pantry with groceries, and pay 15 to 16 percent higher utilities and transportation costs.
Along this line of thinking, those 52 occupations now have added significance because they would lead to a higher standard of living in the Mankato area than the Minneapolis-St Paul area. The next tier of occupations, however, identifies occupations in which the difference in average wage between the Mankato area and the Minneapolis-St. Paul area is a net positive or greater than 12 percent. Meaning, these occupations either earn more than the Minneapolis-St Paul area or they earn less than the Minneapolis-St. Paul area but it does not offset the higher cost of living.
Using this method, the list nearly triples (expanding from 52 to 154). This tier includes some significant high paying occupations and occupations with high levels of employment across all industry sectors in the Mankato area. Most noteworthy are: diagnostic medical sonographers, loan officers, accountants and auditors, retail supervisors and managers, nurse practitioners, licensed practical and licensed vocational nurses, welders, social workers, healthcare support, nursing assistants, dental hygienists and market research analysts – to name a few. This expanded group of 154 unique occupations now swells to nearly 20,000 estimated workers, or roughly 40-42 percent of the total estimated jobs in the Mankato area in which earning potential is paralleled to the Minneapolis-St. Paul area.
This information only represents what jobs presently pay. DEED’s Job Vacancy Survey allows a comparative analysis on job postings. In general, across the landscape of all job postings recorded by DEED covering all occupations and industries as a whole, job postings in south central Minnesota offered 14.1 percent higher pay during the second quarter of 2016. Hiring demand is an often understated but critical component to retention. Higher wages, when coupled with an overall lower cost of living, gives the Mankato area a competitive edge in these occupations. But, how does the region retain its youth?
Focusing on graduate destinations is one approach to crafting strategies to retain some of the region’s younger workers. A cursory overview of where workers are commuting to will tell the tale of where to begin focusing the retention lens. By determining where its residents are commuting to work, the Mankato area can begin crafting strategies to retain young talent.
A combined 4.2 percent of all working residents were commuting to the core cities in the Minneapolis-St. Paul area in 2014. Meanwhile, 60.6 percent worked within the city limits of Mankato and North Mankato, and 69.6 percent worked in the area as a whole, including the remainder of Nicollet and Blue Earth counties (rural, as well as, cities within these counties). This does not negate the impact of the Minneapolis-St. Paul area on Mankato-North Mankato commute patterns, but it does highlight something rather notable – Mankato-North Mankato area residents do not only gravitate to the Minneapolis-St. Paul area for work. In fact, many work in other surrounding rural communities and the vast majority stay in the region.
To complete the picture, effective analysis must also factor in variables such as the numbers of commuters in various age cohorts and by specific industry sector and earnings potential. In this case, an examination of Inflow/Outflow reports, which are a summary of all workers imported into the region and all workers exported out of the region for work gives a better understanding of who is coming, who is going, and who is staying. When added to the total number of jobs, imports bump the Mankato area’s recruitment and retention levels of workers up to near 80 percent.
On another level, assessing where college graduates in the Mankato area head to work after graduation will determine if the Mankato area is able to effectively retain young talent. It does not, however, make the case that Mankato is losing its homegrown talent. Analysis tools can determine where recent graduates of Mankato’s top colleges go to for work; however, one simple caveat remains. Not all students who graduate from the Mankato area higher education institutions are from the Mankato area. In fact, many students may be returning home after spending two or more years in the region pursuing their college degree. Identifying which of those graduates stay in region would determine how much young talent is being drawn to the area for education and staying post-graduation. To achieve this result, local employers must continue to forge strong alliances with higher education institutions and help chart the course for meaningful career pathways that meet the employers needs and pay graduates what the Minneapolis-St. Paul area markets indicate that their skillset is worth. Having said that, a look at where college graduates are headed from two local colleges does show that a measurable segment of Minnesota State University, Mankato graduates do seek work in the Minneapolis-St. Paul area; however, for South Central College graduates that is not the case.
The top destination for Minnesota State University, Mankato graduates from the class of 2013 across all programs ended up working in the Minneapolis-St. Paul area in the first three months of their third year after graduation. The lone exceptions were public administration and social services majors and history majors who found themselves working primarily in health care and retail trade in Mankato, respectively. This indicates the top destination but not the only destination. In some programs, the majority of graduates working in the Minneapolis-St. Paul area within three years and three months post-graduation was above 70 percent; however, some programs were well below 50 percent. These numbers support the notion the Mankato area has a retention challenge to keep newly minted Minnesota State University, Mankato graduates employed in the region.
South Central College is a different story entirely. Southwest Minnesota (including the Mankato area) was the top work destination for South Central College graduates in the third month of their third-year post-graduation across all programs. Given commuter patterns, it is reasonable to conclude that the majority of graduates are remaining in the Mankato area and surrounding counties.
Ultimately, the region does have retention challenges now and will in the future; however, these challenges are multi-layered in complexity. There are many moving parts to retention, such as quality of life, cost of living, and access to higher wages and amenities. To retain the region’s college students, economic developers and employers must promote the high-paying occupations and low cost of living. There are opportunities in the region for the college students to grow their careers and thrive in the economy.