New study finds Minnesota eighth worst state for hiring
The Star Tribune ran a story last Wednesday titled “Minnesota’s big economic challenge is where to find people to fill jobs, state demographer says.” It followed this with another on Friday titled “Gov. Tim Walz ‘asking our team to be bold’ to attract workers to Minnesota.” A new report suggests that this team will have its work cut out.
A study by recruitment firm Career Cloud — The Best and Worst States to Hire Workers — finds that looking ahead to 2023, Minnesota is the eighth worst state for hiring. Breaking that down, the study finds that our state has good raw material — we rank 10th on the percentage of adults with bachelor’s degrees — but we fare badly on a range of other measures: 33rd for best influx of talent; 34th for lowest job openings rate; 37th for best diversity among job candidates; and 45th most favorable business tax policies.
This will come as no surprise to regular readers of this site. In our report “Taxes and Migration — Minnesotans on the Move to Lower Tax States,” we found that net domestic migration of people into Minnesota turned negative in 2002 and remained negative until 2017. That year and the following, our state actually gained residents on net from other states, but this inflow dried up as suddenly as it had come. In 2019, Minnesota lost 965 residents on net, and in 2020 the net loss was 9,757, the third-largest net loss of residents to other states in thirty years. This trend has continued. In 2021, Minnesota lost 13,453 residents to other states, the Twin Cities losing 15,462 residents to other parts of America.
Research, including our report, finds compelling evidence that our state’s high taxes play some role in pushing people out of Minnesota and keeping others from moving here. Indeed, since 2011 Minnesota has lost 41,000 residents on net to states without an income tax.
But Governor Tim Walz might be tying his people’s hands here. The Star Tribune reports:
“I’ve never denied that tax policy is a piece of that,” Walz said. “I oftentimes say, ‘You get what you pay for.’ Minnesotans pay a little more; they get a little more. [But] if they’re not getting that little more, then they have a right to ask, ‘What can we do differently?'”
Gov. Walz is wrong. There is, in fact, no statistical relationship between a state’s tax burden and its quality of life. Indeed, one could ask why, if high taxes pay for a high quality of life, are people moving to low-tax states? If the Walz administration is serious about attracting talent, it needs to be led by the data, not wishful thinking.