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Minnesota job growth still falls behind U.S.

A recent Star Tribune headline reports “a strong finish for Minnesota employment in December.”  There is no question Minnesota experienced strong growth for the months of December and November.  Jobs grew by 9,100 in December and 9,200 in November, which is at the top end of the growth scale for any two-month period.

Obviously these are welcome numbers, but one or two months do not reflect the overall strength of Minnesota’s jobs climate.  As the Star Tribune notes upfront, Minnesota’s annual employment growth rate for 2015 was below the U.S.—1.5 percent versus 1.9 percent.  Unfortunately, as shown below, this is the fourth year in a row Minnesota’s growth rate has failed to outpace the U.S.

20160125-Employment-Growth-Chart

When you look at ten years of growth spanning before and after the Great Recession, Minnesota is again below average.  This is also true for growth in personal income.  Citing those two disappointing data points, American Experiment recently released a short video with a simple message, “Minnesota can do better.” While Minnesota is a great state to live and raise a family, there is much to lose if we ignore these warning signs.

Instead of celebrating a good month of employment numbers, we need to ask why growth has not kept up with the U.S. over the past year, four years, and ten years.

To help answer how Minnesota can do better, American Experiment published the Minnesota Policy Blueprint last year to offer Minnesota a broad set of policy recommendations aimed at enabling all Minnesotans to thrive.  When it comes to job growth, we’re quite certain the state’s tax climate matters and we’ve included a number of recommendations to lower Minnesota’s tax burden.

As I reported before, a key demographic trend limiting job growth is the fact that people are not moving from other states to Minnesota to work as they had in the past.  And Minnesota’s tax policy is definitely part of what keeps people away.

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