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Why Can’t Young People Afford Houses?

Today's Minneapolis Star Tribune bemoans the lack of affordable housing for young people in the Twin Cities: "Twin Cities real estate pinchpoint: Few low-priced homes are being built." Builders are putting up more houses than they have in a decade, but not the kind in most demand. About 16 percent of the new houses in the Twin Cities metro this fall were priced less than $250,000, says a new report by Metrostudy, a national housing research firm. The rest were out of reach for the first-time buyers who are expected to drive the housing market in the coming year. A decade ago,...

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Nearly Twice As Many Work In Government As In Manufacturing

Terence Jeffrey reports the latest data: The United States lost 9,000 manufacturing jobs in October while gaining 19,000 jobs in government, according to data released by the Bureau of Labor Statistics. Government employment grew from 22,216,000 in September to 22,235,000 in October, according to BLS, while manufacturing jobs dropped from 12,267,000 to 12,258,000. This chart plots the number of manufacturing employees against the number of government employees: No wonder economic growth has slowed to a crawl! Of course, the decline in manufacturing jobs doesn't necessarily mean a decline in manufacturing. On the contrary, the value of goods made in America is higher than ever....

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More of the Same: “Nothing Spectacular” in State Jobs Report

The new state jobs report is out and not surprisingly, it's more of the same that Minnesotans have come to expect and accept. Last month Minnesota plodded along with an increase of some 1,900 jobs statewide. Yet even the status quo's biggest apologist--the Star Tribune--characterized the numbers as "a slight overall gain" that continues "slow, steady growth in the state job market." “Although it’s been nothing spectacular, I think it’s been notable that as long as it’s been going on, our growth rate has been very persistently solid, if not remarkable,” said Steve Hine, a labor market analyst for the state. "Nothing spectacular." "Not...

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White House “Fact Sheet” on Minnesota income growth fails to report income declines in Mankato, St. Cloud, and Rochester

Yesterday the White House released a “Fact Sheet” touting growing incomes, falling poverty, and rising health coverage in Minnesota. The fact sheet clearly aims to bolster the perception that all is well with the economy as the nation edges closer to electing the next President.  To that end, the White House could not help but embellish a few things. The most noteworthy embellishment revolves around household income growth in Minnesota’s metro areas.  Here’s their spin: The Minneapolis-St. Paul and Duluth metro area saw the fastest gains within the State, with typical households’ incomes rising 2.6 percent. There are two major problems with this statement. ...

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Tax Foundation report finds business taxes in Minnesota are among the least competitive

The Tax Foundation released their 2017 State Business Tax Climate Index today and, as usual, Minnesota ranks very poorly.  The state ranks 46th overall.  Looking to specific categories, Minnesota ranks 43rd for corporate tax, 45th for individual income tax, 25th for sales tax rate, 28th for unemployment insurance tax, and 33rd for property tax. Minnesota’s bottom-of-the-barrel ranking shows the state’s tax system is one of the least competitive in the country.  Competitiveness is exactly what the index aims to measure.  As the report explains: The modern market is characterized by mobile capital and labor, with all types of businesses, small and large, tending to locate where...

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A Minimum Wage Fable by Mark Perry

[caption id="attachment_4700" align="alignleft" width="229"] Dr. Mark Perry spoke at American Experiment's BIG minimum wage debate that drew over 200 people.[/caption] [This is a great post from Dr. Perry's Carpe Diem blog.] [The full 60 min. audio from American Experiment's BIG minimum wage debate with Sen. John Marty, Dan McElroy, and Dr. Perry is available here.] Consider an imaginary economy with two types of workers: two-armed and one-armed. Two-armed workers are the large majority, while the one-armed workers are a small minority. For most manual tasks and some service-related jobs, suppose the one-armed workers are realistically less productive than their two-armed counterparts for: a)...

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Affordable Housing? Not For Twin Cities Families

The Metropolitan Council—the Twin Cities area’s regional government—has been telling us for years that we’ve got to change the way we live. “Thrive MSP 2040,” the council’s 30-year development plan, is intended to remake our region around transit; move us into high-density, “stack and pack” housing along fixed-rail lines; deplete road funding; and wean us out of our cars so we walk, bike or take public transit to work and leisure activities. But today’s Star Tribune provides powerful evidence that people here generally don’t want to live that way. The Met Council is pressuring the region’s municipalities to densify, but home builders...

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Once Again, Star Tribune Cheers Mediocre Performance

We Minnesotans have a habit of patting ourselves on the back for performance that is, at best, average. Our local press, especially the Minneapolis Star Tribune, encourages this form of self-deception. A case in point was an article in today's Strib business section headlined Twin Cities economy posts solid gain in 2015. The boosterish article, by Adam Belz, was based on a release of data by the Bureau of Economic Analysis on economic growth by metropolitan area: The Twin Cities economy grew steadily in 2015, setting a pace that’s better than average and keeping Minneapolis-St. Paul in its spot as the...

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Mark Perry’s remarks at American Experiment’s minimum wage forum

Update: Minnesota Public Radio covered the event, listen to its report here: “How would $15 minimum wage affect workers?” Thanks to the Center for the American Experiment for the opportunity to participate today. As a native of the Twin Cities, I feel especially fortunate to be here. What’s not so fortunate is that we’re here debating a topic that has actually been settled science in economics for several hundred years. Generally, the first thing we teach on the first day of Econ 101 is that if you raise the price of a good or service, you’ll reduce the demand for that...

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What’s Happened to Minnesota’s Entrepreneurial Spirit?

In the Minneapolis Star Tribune, Dileep Rao, a professor of finance, bemoans the fact that Minnesota is no longer producing the cutting-edge, rapidly growing companies that once fueled the state's economy: Glen Taylor built Taylor Corp. into the country's largest wedding-invitation printer. Earl Bakken built Medtronic into the world's largest electronic medical-device company and founded the medical electronics industry. Bob Kierlin built Fastenal into the country's largest fastener company and one of the best stocks on U.S. stock exchanges. Dick Schulze built Best Buy into the world's largest electronics retailer. And Richard Burke built UnitedHealth Group into the world's largest health...

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