Report says that Minnesota is in the top 10 states which residents are fleeing

On Monday, writing about Minnesota’s supposed labor shortage, I noted that our state’s birthrate has held up relatively well. On Tuesday, I wrote about how data show that Minnesota’s employment has declined most among 20- to 24-year-olds, with the fifth biggest fall in the United States.

And, as a recent report by labor market analytics firm Lightcast titled “Minnesota’s Vanishing Workforce,” helpfully summarized by Axios, found:

…with total net migration of -17,365 between 2020 and 2022, Minnesota is in the top 10 states with the highest domestic outflows in the country.

As with the numbers for declining employment of Minnesotans in their 20s, this will come as no surprise to those who have been following the Center’s work.

In December 2021, I wrote that:

New Census Bureau population data show that Minnesota’s population grew by just 225 people in 2021. One particularly alarming aspect of this was a loss of 13,453 residents to other states. This was our state’s biggest net loss of domestic migrants to other states in at least 30 years. [Emphasis added]

In December 2022, I wrote that:

New Census Bureau data show that our state smashed this record in 2022. From mid-2021 to mid-2022, 19,400 Minnesota residents left for other states, by far the highest number in at least three decades.

There are number of reasons for this, such as costs of living, job opportunities, recreation, crime, and weather and climate. But, as I wrote in May:

…this provides little comfort for Minnesotans concerned about this ongoing loss of residents to other parts of the United States. The state government exercises little control over factors such as “recreation,” and even so the 2023 U.S. News & World Report “Best States Rankings” study ranks our state 7th for ‘Natural Environment’ and we still have record numbers of people leaving. It exercises even less control over “weather and climate,” despite Gov. Walz’s bizarre claims to the contrary.

The state government exercises rather more control over the other factors; “cost of living, job opportunities, [and] crime.” But Minnesota scores poorly on these measures. Housing and child care are relatively expensive here, largely because of government actions; our state is one of only 13 not to have recovered its pre-pandemic peak of employment; and Minnesota’s crime rate is now higher than the national average. So, if you think these other factors drive some of that population outflow, I don’t disagree, and, as with high taxes, the poor performance of our state government is the culprit.

Indeed, a paper by economists Henrik Kleven, Camille Landais, Mathilde Muñoz, and Stefanie Stantcheva that “review[s] a growing empirical literature on the effects of personal taxation on the geographic mobility of people and discuss[es] its policy implications,” finds that:

There is growing evidence that taxes can affect the geographic location of people both within and across countries. This migration channel creates another efficiency cost of taxation with which policymakers need to contend when setting tax policy.

More specifically:

This body of work has shown that certain segments of the labor market, especially high-income workers and professions with little location-specific human capital, may be quite responsive to taxes in their location decisions.

Here is a push/pull factor the state government can do something about. Sadly, in the last session, it chose to hike taxes and increase that push factor, which will make our labor force shortage worse.