Per capita GDP has grown more slowly in Minnesota than nationally in every year since 2014

Back in May, I noted that Minnesota’s economy has grown more slowly than the national average in every year since 2014. One respondent wrote: “Figures don’t lie, but liars sure do figure. Try the same analysis with per capita GDP growth and see where it gets you.”

Well, alright then.

Figure 1 shows the real, per capita, Gross Domestic Product (GDP) growth rates for the United States and Minnesota for the last sixteen years. We see that in the eight years prior to 2014 Minnesota’s rate of per capita GDP growth was faster than that of the United States in five. By contrast, Minnesota’s per capita GDP growth rate has been below that of the United States in every single year since 2014.

Figure 1: Real per capita Gross Domestic Product growth

Source: Bureau of Economic Analysis

Another way to look at this is to see the income ‘premium’ to living in Minnesota – the difference between per capita GDP in Minnesota and nationally – over time. As Figure 2 shows, as recently as 2014, per capita GDP was 8.2% higher in Minnesota than nationally. By 2022, that ‘premium’ was down to 2.0%, its lowest in at least a quarter of a century. Those above average per capita incomes Minnesotans like to boast about will, on current trends, soon be a thing of the past.

Figure 2: Difference between per capita GDP in Minnesota relative to the United States

Source: Bureau of Economic Analysis

Around 2014 something happened that put our state’s economy on a new, relatively lower growth path, which is eroding Minnesotan living standards relative to the rest of the country. What was it? Answers on a postcard…