How rural Northwest Minnesota businesses are surviving and even thriving despite labor shortages

CATHY WURZER: We're going to talk about rural Northwestern Minnesota right now. It's short on workers. Companies are working hard to keep folks on the payroll. Business is booming in Northwestern Minnesota. The region's anchor businesses face headwinds as other manufacturers do, but they've managed to weather the downturns without pulling up stakes and moving to more populated areas. So what do these companies know that the rest of the world needs to learn? Senior economics contributor Chris Farrell headed north to find out, and Chris is in studio to tell us more. Hey, how are you?

CHRIS FARRELL: I'm doing well, Cathy. Thanks for having me.

CATHY WURZER: Absolutely. Welcome back on the program. Say, what got you interested in this story in the first place?

CHRIS FARRELL: So Cathy, it's a remote, rural area. And the drive from the Twin Cities? It took me seven hours, two stops. They're small towns, but you have these big companies. And the story of the past three decades in this country has been about deindustrialization, moving to warmer climates, moving to places that it's cheaper to operate. So I was just really curious. What's going on in this corner of Northwest Minnesota?

CATHY WURZER: OK. So where did you go? I'm assuming you went to probably Roseau, Warroad, and Thief River Falls for sure.

CHRIS FARRELL: That's it. So visited Digi-Key, which is in Thief River Falls. And Thief Rive Falls' a town of 9,000. Digi-Key with its warehouse, headquarters, there employs 3,600 people. You have Central Boiler, which is in Greenbush-- 300 plus people at its factory and headquarters, town of 700 plus. Marvin Windows in Warroad and also the Polaris factory which is in Roseau.

CATHY WURZER: OK. Yeah, that's a lot of big business up there. So manufacturing-- and I've always wanted to know this. When you had a chance to talk to those folks up there, how do they end up there, way the heck up there? How did they get there? Do we know?

CHRIS FARRELL: Well, the question I ask everybody, Cathy. I mean, it just turns out it was a similar story, very entrepreneurial area. When the rise of mechanization and agriculture, you had a bunch of these entrepreneurs look around. What other problems can we solve? So with Central Boiler, it's an outdoor wood burning furnace for your home.

It also can be elsewhere. With Polaris, this was about, hey. We want to get out to our cabin, and we're tired of putting on the snowshoes and walking a long distance. Maybe we can make this a little bit easier. And so with these entrepreneurs that just sort of threw the spaghetti against the wall, and they ended up creating these dynamic companies.

CATHY WURZER: As opposed when one company is successful, others look to that area and say, well, we can go over go up there and make a go of it. Say, these are good jobs, right?

CHRIS FARRELL: Yes, they are. That's what we define as good jobs. I mean, they come with benefits. They come at good pay. They're manufacturing jobs, so they're about one third higher than your typical job. And they're also good jobs in the sense that people want you there. And because there aren't a whole lot of people-- the populations are fairly small. And so these are long tenured jobs. These are stable jobs. And there's really a lot of opportunity in Northwest Minnesota.

CATHY WURZER: And they are looking for workers?

CHRIS FARRELL: They are. And the thing is-- I just want to give you an example. Let's just take Digi-Key. This is a global distributor of electronic equipment. It's headquartered in Thief River Falls. And as I mentioned, town of 9,000. It's got this new warehouse. The footprint is slightly bigger than 22 football fields. I mean, so this is a huge facility-- employs about 3,600 people. And I asked Dave Doherty just what you're asking me. I had the exact same question. I asked him, what about these labor shortages?

DAVE DOHERTY: We've had to face labor shortages almost since day one. There's a number of successful companies in the area, and all competing for a great labor pool.

CHRIS FARRELL: And I heard this over and over again-- Marvin Windows, heard it at Polaris. And what I took away, Cathy, is employers are willing to be flexible. They invest in worker knowledge. They invest in worker skill. So learning new jobs, learning new skills, was encouraged.

CATHY WURZER: I bet that they have to all be pretty creative to keep their workers.

CHRIS FARRELL: They really do. I walked through the factory with Terri and Dennis Brazier, and they're the founders of Central Boiler. So it's just outside the town of Greenbush. Now, this is a town of about 700 plus. And they make, as I mentioned, these highly efficient wood burning furnaces. And they also make commercial lawnmowers at this factory and headquarters that employs 300 workers here in Greenbush. And so I'm walking around with Dennis Brazier, and we're walking the factory floor. And I'm asking them questions about changing jobs.

DENNIS BRAZIER: We try and break jobs up because it's hard for people to do the same job all the time because it can get boring. So it's something we just always work out.

CHRIS FARRELL: So Cathy, one of the things I was really curious about with this is this area of the country has been living with this tight labor market for a long period of time. But as you know-- you talk about it a lot-- the rest of the country now is complaining they don't have the workers that they need. And I was really curious. What's the longer term impact of a tight labor market? And one of the things seems to be you invest more in your workers, and you encourage them to change jobs. And you're willing to be flexible.

CATHY WURZER: I've often wondered about this. There must be something there too that keeps folks, and these companies are not offshoring their jobs. You know what I'm saying? So it's like, the workers are there, the companies are there. Did they talk at all about how they won't go offshore like so many of their companies have?

CHRIS FARRELL: So what they've done-- all of them-- is they have factories and facilities elsewhere around the country and also globally. So what is really striking, though, is the decision by the entrepreneurs and their successors to maintain a major presence in Northwestern Minnesota. And so I asked people, why? Why? And I think one of the key stories with Marvin Windows-- you now have the current CEO, Paul Marvin, is the fourth generation of the family that has owned that company.

Now, they have about 2,600 workers at their factory in Warroad. Now, it's a town of 1,800. So the level of responsibility-- there's something arbitrary about the fact that everyone has stayed. But at the same time, they have skilled workers, and they have towns with a deep civic culture. The jargon term is social capital, but a lot of effort is also made to create an environment where they'd want to stay.

CATHY WURZER: Say, I was talking to a friend who is a miner in Northeastern Minnesota across the state there-- older person who's going to retire soon. And he was kind of singing the blues about in his particular area of the world, they can't find enough younger people to take jobs that folks his age are going to give up because of retirement. So as the boomers are aging out of the workforce, do these companies in Northwestern Minnesota-- are they attracting the next generation of workers?

CHRIS FARRELL: This is one of the big challenges. How do you attract families? If you think about economic development and you talk to people in economic development, it used to be, how do we get the jobs? And then there used to be this thing over here about families, and we do things. Now, what the realization is, Cathy, is that in order to bring young people-- particularly with the retiring of the baby boom generation-- that economic development and attracting labor and attracting families is really about having enough housing.

It's about having child care. It's about having the amenities that people will enjoy being in the community, that they can go to a coffee shop, that they can maybe go to a theater. So there are all these wonderful outdoor activities, but it's trying to enrich the culture of the town itself. And by the way, nobody has solved the problem about affordable housing or solved the problem about having enough affordable child care, but what struck me was how hard the business and civic leaders are working together to try and solve that problem.

CATHY WURZER: Did they give you an indication here? Does, say, Marvin Windows have a child care program, or do the other companies have that amenity?

CHRIS FARRELL: So what they're all doing is they don't want to have the program and be responsible for it themselves. So for example, in Thief River Falls, there's Advance Thief River. And what they're trying to do is to create a more welcoming environment for opening child care businesses, finding landlords who are willing to rent to child care businesses. They have a plan that they've been developing, so they're trying to create more child care businesses.

And Dave Doherty, the CEO of Digi-Key, he said, look. Our cultural competency is not running a child center or building affordable housing, but we want to provide leadership. We want to provide support. And that's what I think you see with Marvin Windows and the other companies. They are playing a big role in making these communities a more attractive place to move to because the bottom line is they're still growing. And even though they have facilities elsewhere, they still want more workers in Northwestern Minnesota.

CATHY WURZER: I am glad you went up to Northwestern Minnesota. Was that your first time?

CHRIS FARRELL: It was my first time. And I have to tell you-- I was there February, March. It's really cold up there.

[LAUGHTER]

CATHY WURZER: We did a live remote broadcast for Morning Edition from Roseau in January. It was something-- talking about hockey. But we had a great time up there. I'm so glad you had the opportunity to go up to Northwestern Minnesota. Chris, thank you so much.

CHRIS FARRELL: Thanks a lot, Cathy.

CATHY WURZER: Chris Farrell, Senior Economics Contributor here at MPR News. You can listen to All Things Considered tonight to hear more on how businesses in Northwestern Minnesota are navigating a tight job market.