Employment data upends liberal narrative on the border battle between Minnesota and Wisconsin

People love comparing the economic performance of Scott Walker’s Wisconsin to Mark Dayton’s Minnesota.  Both governors were elected in 2010 and took their states in dramatically different policy directions.  Walker lowered taxes, ended collective bargaining for public employees, and eventually made Wisconsin a right-to-work state.  Dayton raised taxes on the rich, raised the minimum wage, and worked to expand public unions.  Most of these policies were implemented between 2013 and 2015.

Public policy changes take a long time to begin showing economic impact, but that didn’t stop University of Minnesota professor Larry Jacobs from opining on this border battle in a 2013 New York Times op-ed.  Nor did it stop all sorts of liberals, including President Obama, from touting Minnesota’s superior economic performance over Wisconsin ahead of the last presidential election as proof that blue state policies work.

As more time passes, however, it’s getting harder for liberals to hold up Minnesota as a model.  First off, American Experiment’s 2016 report on Minnesota’s economy shows the state’s economic performance is, at best, average across a wide range of metrics.

But it’s also becoming harder to argue Minnesota bests Wisconsin.  While economic output and income remain higher in Minnesota, Wisconsin employment numbers are now besting Minnesota.  The chart below shows Wisconsin total employment minus Minnesota total employment, which shows employment has been growing far faster in Wisconsin for over four years.  Since February 2013, Wisconsin’s employment lead over Minnesota nearly doubled, growing from 70,108 jobs to 138,383 jobs in June 2017.

Source: U.S. Bureau of Labor Statistics

To some degree, stronger growth should be expected in Wisconsin, considering the state experienced a much larger drop during the recession.  A larger drop should mean a larger pop at some point.  And, as the chart shows, Wisconsin hasn’t fully regained the lead it held prior to the recession.

But we’re now well past the recession and Wisconsin employment growth just hit overdrive.  Minnesota did too, but nothing like Wisconsin.

Since the beginning of the year, Wisconsin added 75,881 jobs, compared to Minnesota’s 43,761 jobs.  As a result, Wisconsin’s unemployment rate dropped below Minnesota’s rate in February for the first time since December 2008.  Employment data released yesterday report Wisconsin’s unemployment rate sat at 3.06 percent in June, over half a percentage point lower than Minnesota.

These new jobs also appear to be good jobs.  Wisconsin’s per capita personal income rose by 1.2 percent in the first quarter of 2017 compared to the 4th quarter of 2016.  By comparison, per capita personal income grew by 0.3 percent in Minnesota.

Of course, no one should read too much into this data when it comes to the success or failure of either states’ policies.

But the data does prove one thing.  Liberals have themselves been reading way too much into the data. When Obama spoke to students in La Crosse in July 2015, he highlighted Minnesota’s lower unemployment rate as evidence Minnesota was winning the border battle.  Well, today Wisconsin has the eighth lowest unemployment rate in the country, ten spots higher than Minnesota.  Sorry Obama.  Economics ain’t so simple.