Not as good as you think
Beneath the surface Minnesota’s economy shows inherent weakness.
Economic growth in Minnesota
It has become fashionable in recent years to question whether developed countries need more economic growth. “Society” has everything it needs, the argument goes, we just need to bring more “fairness” to how we divide it up and, anyway, the planet could not sustain further economic growth.
But, as the old song goes, “You don’t know what you got till it’s gone.” In his book, The Moral Consequences of Economic Growth, economist Benjamin M. Friedman argues that material growth has non-material benefits. “Economic growth—meaning a rising standard of living for the clear majority of citizens—more often than not fosters greater opportunity, tolerance of diversity, social mobility, commitment to fairness, and dedication to democracy ” he writes “[M]any countries with highly developed economies, including America, have experienced alternating eras of economic growth and stagnation in which their democratic values have strengthened to weakened accordingly.”
It is not true, as the Marxists argued, that society is driven by its economics. But it seems unarguable that some element of recent political turmoil stems from the financial crisis of 2008-2009 and the sluggishness of the recovery. Even the rich world needs economic growth.
On some commonly-cited measures, Minnesota’s economy appears to be in good health. Take Gross Domestic Product (GDP) per capita, which simply divides the amount of GDP (goods and services produced) in a given state by the population. On this metric, Minnesota performs better than the nation as a whole. In 2017, our state ranked 15th nationally, with a per capita GDP of $62,962. By comparison, average GDP per capita for the U.S. as a whole was $59,141.
But other signs are less comforting. The growth rate of GDP is one of them. Sine 2000, our state’s economy has grown more slowly that the U.S. In 2017, the United State’s economy was 32.8 percent larger in real terms than it was in 2000. Minnesota’s economy was 30.2 percent larger. If Minnesota’s economy rate had matched that of the nation since 2000, the state’s GDP would be 2 percent higher that it actually is.