Trigger the alarm

Whatever you think of Minnesota’s present, we are heading for a below-average future

It is always easier to convey good news than bad news. Sometimes, however, we have to tell our friends, gently, that things are not going as well as they think. That is the case with regard to Dr. Joseph Kennedy’s paper on Minnesota’s economy, which is featured in this issue of Thinking Minnesota.

Many Minnesotans—most Minnesotans, I suspect—cherish the idea that our state enjoys a progressive, high technology economy that should be envied by residents of most other states. Unfortunately, while that might have been true at one time, it is not true today. As Dr. Kennedy’s paper demonstrates, Minnesota’s current economy is average at best, and below average by several key measures, most notably the state’s rate of economic growth.

More troubling still are multiple leading indicators that should trigger alarm in every Minnesotan. Whatever you think of Minnesota’s present, we are heading for a below-average future. Declining numbers of Minnesotans working in high-tech jobs, increasing concentration of employment in low-wage occupations, a startling racial gap that is one of the widest in the United States, a declining rate of entrepreneurship, and, most concerning of all, a persistent net out-migration of prosperous Minnesotans, are just some of the trends that bode poorly for Minnesota’s economic future.

If there is one thing I hope every reader takes away from Dr. Kennedy’s paper, it is this: Minnesota’s own state agencies currently predict a below-average economic future for our state. In the years to come, the agencies project below-average growth in real personal income, below-average payroll growth, and a below-average rate of job growth in 19 out of 22 major occupational categories. Should Minnesotans be satisfied with that picture of our future? I don’t think so.

This is not to say that there are no bright spots. Minnesotans are hard-working. While our labor force participation rate is falling, it is still well above the national average. This raises our per capita incomes. Similarly, Minnesota has more intact two-parent families than almost any other state. This means that we have more two- and three-earner families, which results in a higher than average median household income.

It is perhaps ironic that Minnesotans’ conservative social and cultural values are propping up an economy that has been weakened by blue-state government policies, but that is what the data show.

One of American Experiment’s themes is that Minnesota can do better. You hear this mantra in our radio ads, and see it on the baseball caps we are raffling off at the State Fair. Our cause is not hopeless; on the contrary, Minnesotans have surmounted worse economic problems than the ones we face today. But in order to identify the actions that will reverse current trends and allow our children and grandchildren to have the economic opportunity they deserve here in Minnesota, we need to start with an honest assessment of where the state now stands. Dr. Kennedy’s paper provides that objective evaluation.

Minnesota is not the first blue state to experience a troubled economy; on the contrary, we are one of the last. By acting now, we can avoid the sub-par future that our own agencies foresee for our state. What, exactly, should we do? We can start with the Center’s Minnesota Policy Blueprint, which contains policy recommendations across a broad range of state issues. The Center continues to update and expand the Blueprint; let’s hope that it truly does become the blueprint for a brighter future for Minnesota.