fbpx

Latest Posts

Home

Facebook

Twitter

Search
About

New report shows that Minnesota’s economic performance has been lackluster and raises doubts about future performance

Late last year, we produced the report The State of Minnesota’s Economy: 2017 and its subtitle was ‘Performance continues to be lackluster’. A new report supports this finding.

Where Minnesota’s economy has been

The most recent edition of the ALEC-Laffer State Economic Competitiveness Index gives Minnesota an economic performance rank of 22nd out the 50 states – right in the middle.

The authors arrive at this by looking at the state’s performance in three performance variables. The first is Gross Domestic Product, the cumulative growth between 2006 and 2016. Here we rank 19th in the nation with growth of 35.9%. Second is absolute domestic migration, cumulative between 2007 and 2016. Here rank 37th with a net outflow of 67,000 people. Third, is the cumulative growth of non-farm payroll employment between 2006 and 2016. Here, our growth of 5.8% ranks our state 18th nationally.

Where Minnesota’s economy might be going

The authors of the report also construct an economic outlook ranking based on 15 state policy variables, shown below. Here, sadly, Minnesota ranks 44th. This is up from 45th last year and the low of 48th in 2015, but is down from 37th in 2011.

There are some bright spots. Minnesota ranks in the top 10 for both its state liability system and its recently legislated tax changes (2016 and 2017). Our state falls just outside the top 10 for debt service as a share of tax revenue.

But the warning signs outweigh these. Minnesota ranks in the bottom ten for top marginal income tax rate, top marginal corporate income tax rate, personal income tax progressivity, and remaining tax burden. It also levies an estate tax and is not yet a right to work state.

Americans seem to love ranking their states. Minnesota’s media likes to plaster these rankings all over the place when they reflect well on the state. A little pride can be a good thing and there is much to be proud of in this state. But if we want to keep it that way, we need to keep an eye on where our economy might be heading.

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

Comments

Subscribe

Categories

Upcoming Events

  • Lunch Forum with Amity Shlaes

    Location: Hyatt Regency Minneapolis 1300 Nicollet Mall Minneapolis, MN 55403

    Buy tickets HERE. About This Event: Enjoy our Early Bird Ticket Special through February 23rd! After this date, ticket price will increase to $30. Doors open at 11:30 AM, program and lunch begin at Noon. In Great Society, the New York Times bestselling author of The Forgotten Man and Coolidgeoffers a stunning revision of our last great period of idealism, the 1960s, with burning relevance for our contemporary challenges. Today, a battle rages in our country. Many Americans are attracted to socialism and economic redistribution while opponents of those ideas argue for purer capitalism. In the 1960s, Americans sought the…

    Register Now
  • Morning in Minnesota Breakfast Series: Moorhead

    Location: Moorhead Country Club 2101 North River Drive, Moorhead, MN, 56560

    Join Center of the American Experiment Friday, February 21 at the Moorhead Country Club for a FREE breakfast with policy fellow Isaac Orr.

    Register Now
  • 2020 Annual Dinner Featuring Sarah Huckabee Sanders

    Location: Minneapolis Convention Center Ballroom 1301 2nd Ave S Minneapolis, MN 55403

    American President: The Unorthodox Approach to Politics that Changed the World. Sarah Huckabee Sanders served as White House Press Secretary for President Donald J. Trump from 2017 to 2019. A trusted confidant of the President, Sanders advised him on everything from press and communications strategy to personnel and policy. For two and a half years, Sanders was at the President’s side, battling with the media, working with lawmakers and CEOs, and staffing the President on every foreign trip, including dozens of meetings with foreign leaders. Sanders is only the third woman and the first mother to hold the job of…

    Register Now