fbpx

Latest Posts

Home

Facebook

Twitter

Search
About

Minnesota’s wage growth ranks 45th in the United States

Above average wages, below average productivity

Minnesotans often point to the state’s high wages as one of its attractions. Indeed, as we wrote in our report The State of Minnesota’s Economy: 2017, the average annual wage in Minnesota is above the national average.

But how long can this continue? Minnesota’s workers are less productive than the national average, whether on a per worker or per hour worked basis. How long can we enjoy above average wages with below average productivity?

Minnesota’s wage growth lags the national average

This shift might be happening. New data from the Bureau of Labor Statistics shows that, in the year to February 2018, Minnesota’s wage growth lagged the national average, as Figure 1 shows. The national rate of increase for average hourly earnings was 2.5%. In Minnesota, it was 0.5%. Overall, Minnesota’s growth rate ranks 45th.

Figure 1 – Growth in average hourly earnings, February 2017 to February 2018, %

Source: Bureau of Labor Statistics 

Above average wages, but for how long?

The good news is that our state’s average hourly earnings of $28.40 are still above the national average of $25.98. Indeed, we still rank a healthy 10th. But, as our growth rate lags the average, so our level will continue to fall relative to it.

I’ve written recently about how Minnesota’s ‘tight’ labor market – the shortage of workers relative to the demand for them – is driving wages up. But what Minnesota really needs to get wage growth back up at the head of the pack is increased worker productivity.

John Phelan is an economist at Center of the American Experiment. 

Comments

Subscribe

Categories

Upcoming Events

  • Master Class: How good are Minnesota’s public schools, really?

    Location: Online Event

    Sign up HERE for this online event! Center of the American Experiment invites you to join us for a free 4-week live online course in public policy, featuring our expert economists and policy fellows. The first four Wednesdays in April, we will broadcast right to your laptop or phone during the noon lunch hour! Each Zoom webinar will be moderated by President John Hinderaker in a way that allows for maximum audience participation. And if you can’t make the live airing, everyone registered will be sent a video recording of the event after it has ended. This is your chance…

    Register Now
  • Master Class: How regulation affects your everyday life

    Location: Online Event

    Sign up HERE for this online event! Center of the American Experiment invites you to join us for a free 4-week live online course in public policy, featuring our expert economists and policy fellows. The first four Wednesdays in April, we will broadcast right to your laptop or phone during the noon lunch hour! Each Zoom webinar will be moderated by President John Hinderaker in a way that allows for maximum audience participation. And if you can’t make the live airing, everyone registered will be sent a video recording of the event after it has ended. This is your chance…

    Register Now
  • Master Class: Everything wrong with the Green New Deal

    Location: Online Event

    Sign up HERE for this online event! Center of the American Experiment invites you to join us for a free 4-week live online course in public policy, featuring our expert economists and policy fellows. The first four Wednesdays in April, we will broadcast right to your laptop or phone during the noon lunch hour! Each Zoom webinar will be moderated by President John Hinderaker in a way that allows for maximum audience participation. And if you can’t make the live airing, everyone registered will be sent a video recording of the event after it has ended. This is your chance…

    Register Now