To help small businesses, lawmakers should loosen regulations
This week is National Small Business Week. And to celebrate small businesses, a bunch of events have been planned around this topic in Minnesota. As the Department of Employment and…
Another day, another ranking of the states of the union. This time it is U.S. News which has ranked Minnesota the second best state in the union. But a closer look at the rankings shows that there is little to be proud of here in terms of our state’s economic policy.
What we do well and not so well…
The rankings are driven by a number of criteria. On some Minnesota does very well. We rank second in the country for Quality of Life. For Opportunity we rank third. We are seventh nationwide for Health Care.
But our state doesn’t fare so well on other measures, specifically those relating to economic policy.
Ranking Minnesota’s economy
The category Economy “tracks unemployment rates, GDP growth, migration into the state, patents, new businesses and more.” Here, we rank 20th in the nation. We can look at the factors that generate this score.
On Employment, we score a healthy 7th, but within that Minnesota ranks 3rd for Labor Force Participation, 10th for Low Unemployment Rate, and a lowly 34th for Job Growth.
For Business Environment, Minnesota ranks 18th. Contributing to this are rankings of 4th for Patent Creation, 8th for Top Company Headquarters, 17th for Venture Capital, 38th for Entrepreneurship, and 44th for Low Tax Burden.
For Growth, where Minnesota ranks 24th, our state ranks 19th for GDP growth, 24th for Net Migration, 43rd for Growth of Young Population.
Ranking Minnesota’s fiscal stability
Another measure, Fiscal Stability, “tracks states’ government credit ratings, liquidity, pension fund liability and budget balancing.” On this measure, we rank 21st .
Within this, on Short-Term Fiscal Stability, Minnesota ranks 22nd in the Union. Drilling down further, we rank 16th for Budget Balancing and 26th for Liquidity.
For Long-Term Fiscal Stability, we rank 27th. Here, we rank 15th for our Government Credit Rating Score and, worryingly, 33rd for our Pension Fund Liability.
Minnesota’s economy is lackluster
Little of this will come as news to those who read our recent report, The State of Minnesota’s Economy: 2017. Also, those who have read my colleague Kim Crockett’s work on Minnesota’s state pensions will be unsurprised by the weak outlook for the fiscal future.
But what about the good bits?
But didn’t we come in 2nd? Yes, thanks to those good scores on Quality of Life, Opportunity, and Health Care. But neighboring North Dakota came in 4th. Neighboring Iowa came in 1st. There is something, it seems, about this part of the world. I doubt its the weather, maybe its the social capital?
But it is not Minnesota’s economic policies. The two measures which approximate to state economic policy are Economy and Fiscal Stability. These are also the two measures where the state performs worst. Minnesota has some strong cards in its economic deck. Its Big Government economic policies aren’t among of them.
John Phelan is an economist at the Center of the American Experiment.