Minnesota’s population growth is below average

In April, Minnesotans breathed a sigh of relief when numbers for the 2020 census showed that the state would not lose one of its eight congressional seats, as had been widely predicted. But it was a close run thing: if the state of New York had counted just 89 more people in the census, it, rather than Minnesota, would have been allotted the 435th of the 435 House seats.

Minnesota’s population growth has long lagged that of the United States. As Figure 1 shows, since the turn of the 21st century, Minnesota has ranked 26th among the fifty states and District of Columbia with population growth of 14.7 percent over this period compared to 16.8 percent for the United States.

Figure 1: Population change, 2000 to 2020

Source: Census Bureau

It has been argued that this is part of broader phenomenon as a growing share of the United States’ population is found in Southern and Western states, driven to migrate there by things like the invention of air conditioning. But Minnesota’s population growth this century has also lagged that of its neighbors to the west, South and North Dakota. With growth of 18.1 and 19.2 percent respectively, the Dakotas have also seen their populations grow at a rate greater than the United States. Neither of them has a climate much different from Minnesota which suggests that geography isn’t necessarily destiny.

In fact, an annual Census Bureau survey asks people who move any distance their main reason for doing so. Of those who moved in 2020, just 0.4 percent cited ‘Change of climate’ as the main reason for their move. The three most popular choices were ‘Wanted newer/better/larger house or apartment’ (14.6 percent), ‘New job or job transfer’ (11.4 percent), and ‘To establish own household’ (10.6 percent).

Each of these relates to the opportunities offered for employment or housing, which suggests that state government policy in these areas could influence migration decisions, either positively or negatively.

From an economic standpoint, slow or even no population growth need not spell doom. Per capita economic growth is what matters for prosperity and that comes from greater productivity per worker, not more workers necessarily. To boost the rate of per capita economic growth, what Minnesota needs is more productive workers, either by making those currently in the state more productive or attracting more productive workers from elsewhere.

It is also the case that higher productivity workers tend to earn higher incomes and, as a result, pay higher taxes. State income tax revenues come, disproportionately, from higher income residents. Just as losing these people will hit state government revenues, attracting them here will boost them.

This is an excerpt from our new report ‘Taxes and Migration: Minnesotans on the Move to Lower Tax States.’