Our Work

Tech-Ecommerce Job Growth in the Midwest: Leaders and Laggards

• June 27, 2022

The Bureau of Labor Statistics has just released detailed state and local job numbers for 2021, which allows us to calculate tech-ecommerce job growth by state. We analyzed the five-year period from 2016 to 2021.

Nationally, the tech-ecommerce sector, as defined by PPI, generated 2.045 million jobs from 2016 to 2021. That’s compared to private sector job growth of 2.188 million over the same period. Nationally, tech-ecommerce accounted for 93% of private sector job growth from 2016 to 2021.

For this blog item, we focus on the 12 states in the Census Midwest region: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin. Overall, these states showed a gain of 26.6% for tech-ecommerce jobs from 2016 to 2021 (see table at the end of the item).

Ohio is the big Midwestern winner for tech-ecommerce jobs, with a 39.1% gain from 2016 to 2021, which translates into a mammoth employment increase of 73.2 thousand. Workers in Ohio’s tech-ecommerce sector were paid $69,000 on average in 2021, slightly higher than the average pay of $67,000 received by Ohio manufacturing workers (these figures include all workers in the sector, both managerial and production).

Among Midwest states, Kansas had the second highest growth rate for tech-ecommerce workers, with Illinois showing the second highest absolute gain of 59.5 thousand (both following Ohio). Workers in the tech-ecommerce sector in Illinois received an average of $95,000 in 2021, compared to average manufacturing pay of $79,000 in the state.

The biggest tech-ecommerce laggard in the Midwest is, surprisingly, Minnesota. Minnesota has a history as a mainframe computer manufacturing leader, but it has not been able to convert that legacy to tech-ecommerce jobs. From 2016 to 2021, the number of tech-ecommerce jobs in Minnesota rose by 8.4%, the second slowest in the country (after Vermont). The number of “tech industry” jobs (software publishing, data processing, internet publishing and other information services, and computer systems design) only rose by 4.4% in Minnesota, compared to a 25% gain nationally, and a 14% gain for all Midwest states overall.

In an April 2021 report, the Minnesota Chamber Foundation acknowledged the state’s weakness in tech.

…sluggish growth in Minnesota’s high-tech industries and tech occupations has been a source of underperformance in the state’s economy for almost a decade, and forecast data projects an underwhelming future if Minnesota does not change.

The chapter on Minnesota’s tech sector drives home the point:

…Our relative under-performance in some fast-growing high-tech subsectors, such a software publishing and data hosting/processing, also explains why Minnesota has lagged faster growing states in GDP and employment growth in the last decade. Our comparative lack of high-flying tech successes this decade may also act as a reputational drag on growth, as fast-growing companies and startups have tended to cluster in tech growth clusters, such as Silicon Valley, Seattle, Austin, or Boulder.

Finally, it is perhaps ironic that Minnesota, a state which has barely participated in the tech boom, is home to Senator Amy Klobuchar, the main sponsor of legislation designed to hobble the large tech companies that have created so many jobs nationally and in other Midwest states. Perhaps if Minnesota catches up and embraces investment from technology leaders, she would better understand the damage her poorly designed legislation would have.