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When It Comes to Tech Jobs, Minnesota Is Out In the Cold

Minnesotans like to think of their state as a high-tech center, but unfortunately that is more fantasy than reality. The latest evidence comes from Forbes, taking off from an analysis of STEM jobs by the Praxis Strategy Group.

The good news is that tech jobs are dispersing. No longer are they concentrated in a few hotbeds like Silicon Valley. The bad news is that they aren’t dispersing to Minnesota:

In the last two years, according to numbers for the country’s 53 largest metros compiled by Praxis Strategy Group’s Mark Schill based on federal data and EMSI’s fourth-quarter 2017 data set, the STEM growth leader has been Orlando, at 8%, three times the national average. Next are San Francisco and Charlotte (each at 7%); Grand Rapids, Michigan (6%); and then Salt Lake City, Tampa, Seattle, Raleigh, Miami and Las Vegas (5%).

The Twin Cities are nowhere mentioned. What is attracting STEM jobs to places like Charlotte, Raleigh, Tampa, Salt Lake City and Grand Rapids? One huge issue is housing costs, which are out of control in the San Francisco Bay area, due largely to over-regulation:

[T]he fastest STEM growth is occurring in somewhat less ballyhooed places that have far lower housing costs and typically have less onerous tax and regulatory regimes.

Emphasis added. Housing costs in Minnesota are higher than in some areas because of our climate. (Of course, places like Grand Rapids and Salt Lake City are in the same category.) But another problem is excessive regulation, as our economist, John Phelan, pointed out in July:

Outside coastal states like New York and California, the Twin Cities was No. 1 in housing costs among the nation’s 20 largest metro areas, according to 2014 U.S. Census data. And they have remained at or near the top of other cost-comparison surveys since then. Statewide, Twin Citians pay an average of 26 percent more than neighboring states. That price gap explodes when compared with southern states like Texas.

Why?

The Pioneer Press surveyed 60 government officials, builders, realtors, housing and energy lobbyists, and home buyers. They found that

…regulations, including energy-saving rules and safety codes, are tougher and costlier than in surrounding states;

The cost of metro-area land is elevated by centralized planning, larger mandated lot sizes and a public resistance to development;

An increasing use of city fees, tucked into the price of a new house, can add tens of thousands of dollars.

And it goes without saying that Minnesota’s tax and regulatory burdens on both business and individuals are extraordinarily high. So, is it any surprise that the Twin Cities are not sharing in the tech boom that is boosting cities like Tampa, Grand Rapids and Raleigh? No. Government policies have consequences, and Minnesota’s ill-advised policies are hurting all of us.

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