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Being Blue Is Giving Minnesotans the Blues

I wrote the op-ed below, on Minnesota’s economy, for some of the free suburban weeklies in the Twin Cities. It is beginning to appear in those papers. One of American Experiment’s key themes is that Minnesota’s liberal tax, spending and regulatory policies are dragging down the state’s economy. In the op-ed, I cite some basic economic data that come from our soon-to-be-published comprehensive report on Minnesota’s economy.

Minnesota is a blue state. That means that we have high taxes, lots of government spending, and endless government regulations. How is that working out for Minnesotans? Not very well. Consider the following, from the Brookings Institution, the Bureau of Labor Statistics, the U.S. Bureau of Economic Analysis, and the Internal Revenue Service:

  • Over the last decade, Minnesota’s economic growth rate has been below the national average.
  • Since 2004, Minnesota ranks only 30th among the states in rate of job growth.
  • Since 2004, Minnesota’s growth in annual average wage has been below average.
  • 70% of Minnesotans have experienced a decline in real wages since 1999.
  • The Twin Cities metropolitan area ranks only ninth out of the top fifteen U.S. urban areas in economic growth since 2000.
  • Since 2000, the percentage of Minnesotans employed in high-tech jobs has declined.
  • Since the end of the last recession, job growth in Minnesota has disproportionately been in low-wage jobs.
  • Internal Revenue Service data show that every year, Minnesota suffers a net loss of thousands of families to other states. This is partly because residents are leaving Minnesota, but also because people in other states are not choosing to move to Minnesota.
  • The IRS data show that in 2014 alone, the families that left Minnesota took with them—after netting out the incomes of families that moved to Minnesota from other states—$948 million in annual income.

Minnesota once had a strong, diverse economy that was the envy of most other states. But in recent years, Minnesota’s economic performance has lagged. It is telling that the last Minnesota company to join the Fortune 500, United Health Group, was founded in 1977. It has been nearly 40 years since Minnesota gave birth to a company that went on to become one of the country’s 500 largest.

Minnesota can do better. In fact, Minnesota has done better. But Minnesotans can’t expect to keep following the same policies and get different results. In order to do better, Minnesota needs to re-think its high-tax, high-spending, high-regulation approach. Being blue is bringing Minnesota down.

 

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