the state of minnesota’ s economy: 2017 · 2018. 8. 18. · minnesota was once a strong performer...

John Phelan, with assistance from tori roloff, based on a rePort by dr. JosePh Kennedy

the state of minnesota’s economy:

2017Performance continues to be lackluster

John Phelan is an economist at the Center of the American Experiment. He is a graduate of Birkbeck College, University of London, where he earned a BSc in Economics, and of the London School of Economics where he earned an MSc. He worked in finance for ten years before becoming a professional economist. He worked at Capital Economics in London, where he wrote reports ranging from the impact of Brexit on the British economy to the effect of government regulation on cell phone coverage. John has written for City AM in London and for the Wall Street Journal in both Europe and the U.S. He has also been published in the journal Economic Affairs.

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Center of the American Experiment • 1

executive summary

Money isn’t everything, but a strong and growing economy is vital for many of the things we take for granted living in Minnesota. Without high incomes we would struggle to cope with the harsh winter weather or support the vibrant cultural life we take pride in. Nor would we be able to fund public services such as education and policing.

Last year, Center of the American Experiment took an in depth look at Minnesota’s economy, with a report authored by Dr. Joseph Kennedy. A source of pride for many in the state, we found that, in fact, the data showed our state’s economic performance to be only mediocre. We concluded that Minnesota can do better.

A year later we look again at Minnesota’s economy. We use the most current data to assess its health. And we apply a framework of economic growth theory to look at where it might be headed in the future.

We find that:

• Minnesota’s GDP growth has lagged that of the nation generally. As a result, it has not made back the ground it lost in the mid-2000s, and is 2.5 percent below what it would have been had it grown at the national rate since 2000.

• Minnesota’s private sector productivity is be-low the national average. The average Minne-sota worker produces just 92 percent as much as the average U.S. worker.

• Personal income growth has been almost exactly equal to the national average, but that growth has been driven by government trans-fer payments. These account for 47 percent of the rise in personal income.

• Minnesota has a high household income compared to the national average, but, reflect-ing lower productivity, this is a result of more workers per household.

J o h n P h e l a n , w i t h ass i sta n c e f r o m to r i r o lo f f, b as e d o n a r e P o rt by d r . J os e P h K e n n e dy

n oV e m b e r 2 0 1 7

the state of minnesota’s economy:

2017Performance continues to be lackluster

2 • The State of Minnesota’s Economy: 2017

• Minnesota’s rate of job growth has tracked the national average, but new jobs have been concentrated in less productive sectors. Since the onset of the recession in December 2007, Mining & Logging, which contributes $447,603 of value per worker, has added just 700 new jobs. Health care, which adds just $88,761 of value per worker, has added 93,300 jobs.

• The Twin Cities are lagging comparable urban areas in GDP growth and job creation. Of the 15 Metropolitan Areas with the largest GDP, the Twin Cities rank 12th for GDP growth and 11th for job growth since 2000.

• There are wide variations in economic strength across the state. Some counties in Greater Minnesota, notably in the southwest of the state, have narrowed the income gap with the Twin Cities.

• Minnesota’s urban areas—its MSAs—com-pare poorly with those in neighboring states. In terms of economic growth this millenni-um, only Mankato is in the top ten. Iowa has three MSAs on that list.

• Minnesota’s declining labor force participa-tion rate will be a drag on per capita GDP growth for the next 20 years. From 69.9 per-cent now, it is forecast to fall to 64.6 percent in 2035.

• Increasing per worker productivity could off-set this, but Minnesota is suffering a net out-flow of workers earning over $25,000 a year. And it is losing residents in all age categories.

• To increase per capita GDP, Minnesota will need more capital per worker, but its high tax rates discourage such investment. Minnesota has the third highest rate of corporate taxa-tion in the U.S. Coupled with the federal tax, Minnesota has one of the highest corporate tax rates in the developed world. In 2015, Minnesota attracted only $108 of venture capital per worker, compared to a national average of $391.

• Partly as a result of this, the share of new and young businesses in Minnesota increasingly lags the national average. In 2000, Minne-sota’s rate was two percentage points behind the national rate. In 2015, the gap was four percentage points.

• Minnesota’s educational system is a positive for growth, but the state slightly lags the nation in Research & Development spending. In 2014, Research & Development spending accounted for 2.47 percent of Minnesota’s GDP compared to 2.53 percent nationally.


contentsExecutive Summary .................................................................................................................................... 1

I. Minnesota’s Economy Continues to Underperform ......................................................................... 4

1. Economic Output ............................................................................................................................. 4

a. Gross Domestic Product .......................................................................................................... 4

b. Productivity .............................................................................................................................. 5

2. Income Growth ................................................................................................................................. 8

a. Wages ........................................................................................................................................... 8

b. Growth in Personal Income and Disposable Income ......................................................... 9

c. Household Income ................................................................................................................... 14

3. Jobs .................................................................................................................................................... 16

a. Job Growth ................................................................................................................................ 16

b. Unemployment Rate .............................................................................................................. 19

c. Labor Force Participation Rate .............................................................................................. 19

d. Job Growth by Industry .......................................................................................................... 20

II. The Twin Cities Lag Other Urban Centers and Greater Minnesota Performs Poorly Compared to Neighbors ...................................................................................................................... 21

1. The Twin Cities Metropolitan Area is Falling Behind Comparable Urban Areas ............... 21

a. Gross Domestic Product ......................................................................................................... 22

b. Job Creation .............................................................................................................................. 22

2. Greater Minnesota .......................................................................................................................... 23

a. Employment Growth ............................................................................................................... 23

b. Per Capita Incomes .................................................................................................................. 24

c. Gross Domestic Product ......................................................................................................... 25

III. The Prospects for Economic Growth in Minnesota Are Mixed .................................................. 27

1. Sources of Per Capita Income Growth ........................................................................................ 27

a. Minnesota’s Labor Force Participation Rate ........................................................................ 28

b. Capital Per Worker .................................................................................................................. 32

c. Total Factor Productivity ........................................................................................................ 37

IV. Conclusion – The State of the State................................................................................................... 41

i. minnesota’s economy continues to underPerform

To assess Minnesota’s economic health, we begin by looking at the state’s economic performance in three key areas: output, income, and jobs. We see that in recent years our state’s growth has been mediocre by national standards, with productivity a particular problem. Personal income growth has been driven by a rise in government transfer payments. What job growth there has been in Minnesota, has increasingly been found in labor intensive, low productivity sectors.

1. ECOnOMIC OUTPUT

Here we examine Minnesota’s economy on two key macro-metrics, GDP and productivity. These give us an overall, “big picture” view of the health of the Minnesotan economy.

a. Gross Domestic Product

Gross Domestic Product (GDP), also referred to as Gross State Product (GSP), is the most com-monly used measure of economic performance. It measures the total market value of goods and services produced within an economy.

Minnesota was once a strong performer compared with other states. From 1965 to 1997, our state’s aver-age annual growth rate of real GDP was 3.1 percent, a little above the national rate of 2.9 percent. Since then, however, Minnesota’s rate of GDP growth has dipped below the national average of 2.0 percent to 1.9 percent.1 As shown in Figure 1, Minnesota’s output remained more or less flat from about 2005 to 2008. Then the recession struck, which impacted our state more than the nation as a whole. Since then Minnesota’s growth has lagged the national average. It has not regained any of the relative ground it lost in the mid-2000s. If Minnesota’s economic growth rate had matched that of the nation since 2000, the state’s GDP would be 2.5 percent higher.

1 1997 is chosen because there is a break there in the data. As the Bureau of Economic Analysis ex-plains, “There is a discontinuity in the GDP-by-state time series at 1997, where the data change from SIC industry definitions to NAICS industry definitions…Users of GDP by state are strongly cautioned against appending the two data series in an attempt to construct a single time series.”



b. Productivity

What matters most for long-term growth is productivity. The ability to produce more outputs from a given amount of inputs, is the essence of economic growth.2 Here we look at Minnesota’s per worker productivity, and productivity per hour in the production of goods and services.

We can measure state productivity as state GDP per worker. As Figure 2 shows, Minnesota’s per worker productivity has consistently been below the national average since at least 2000. In 2016, Minnesota pro-duced 8.2 percent less GDP per worker than the national average. Minnesota lost relative ground between 2004 and 2009 and has not regained that lost ground since.

2 Considering the importance of productivity, it is surprising how little data exists at the state level. While the Bureau of Labor Statistics (BLS) measures national productivity, its data sources do not provide the information necessary to construct state productivity measures.

Figure 1: GDP Growth in the U.S. and Minnesota, 2000-2016 (2000=100)

Source: Bureau of Economic Analysis

100

105

110

115

120

125

130

135

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

United States Minnesota

A measure of GDP per worker, while useful, can be skewed by part time workers, who count the same as full time ones but work fewer hours and produce less. It can also obscure the variation between sectors.

To take this into account, Figure 3 shows GDP per hour worked in Minnesota’s goods producing sector. The data for hour worked only goes back to 2007. This shows that the state’s workers in this part of the economy are less productive than the U.S. average, producing 5.5 percent less GDP per hour worked. The gap has nar-rowed a little over time, but this is more a reflection of the poor performance on productivity nationally than any growth locally. Indeed, the average Minnesota goods producing worker’s productivity has stagnated for the last six years.

6 • The State of Minnesota’s Economy: 2017PAGE 1

Figure 2: Private Sector Productivity, 2000-2016 (Real GDP per Employee)

Source: Bureau of Economic Analysis (2009 Dollars); Bureau of Labor Statistics

$80,000

$85,000

$90,000

$95,000

$100,000

$105,000

$110,000

$115,000

$120,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016



Figure 4 shows GDP per hour worked for the service producing sector. Here, too, Minnesota is below the national average, producing 7.6 percent less GDP per hour worked. But whereas productivity has more or less flat lined since 2010 in the goods producing sector, in services it has drifted downwards. This is bad news for Minnesota, as a growing share of the state’s jobs are to be found in service industries (see next section).

PAGE 2

Figure 3: Goods Producing Productivity, 2007-2016 (Real GDP per Hour Worked)


$50

$55

$60

$65

$70

$75

$80

$85

$90

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016


2. InCOME GrOwTh

GDP and productivity are important starting points, but people experience the economy through their income and spending. Here we look at Minnesota’s wages, personal income, disposable income, and house-hold income.

a. Wages

Most people rely solely on labor earnings for their income. So, to better understand the economic status of the average worker, it is helpful to look specifically at the average wage people receive.

Here, Minnesota tracks very closely to national averages. As Figure 5 shows, in 2016, Minnesota’s average wage of $54,270 was just $659, or 1.2 percent, more than the U.S.3

3 Respectively $53,519; $582; and 1.1 percent in 2016’s report.

8 • The State of Minnesota’s Economy: 2017 PAGE 3

Figure 4: Service Producing Productivity, 2007-2016 (Real GDP per Hour Worked)


$60

$61

$62

$63

$64

$65

$66

$67

$68

$69

$70

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016



b. Growth in Personal Income and Disposable Income

Personal income measures the total income people receive from all sources, including wages, salaries, dividends, interest, rental income, and government transfer payments. It is a useful barometer of economic wellbeing, but it is only a starting point. Minnesotans pay tax on this income. To account for this, we look at per capita disposable income, which is personal income minus income taxes.

Minnesotans’ personal incomes grew at a slightly faster pace than the national average over the past 50 years. In 1965, per capita personal income in Minnesota was 4.1 percent below the U.S. level. Since then, it has grown to be 5.1 percent higher.4 Minnesota’s per capita income now ranks fourteenth in the coun-try.5 Since the 1990s, as shown in Figure 6, Minnesota’s per capita income has grown slightly ahead of the national rate.

4 Down from 6.0 percent higher in 2016’s report.5 Down from 13th in 2016’s report.

PAGE 4

Figure 5: Average Annual Wage in the U.S. and Minnesota, 2000 -2016

Source: Bureau of Labor Statistics (2016 Dollars)

$46,000

$47,000

$48,000

$49,000

$50,000

$51,000

$52,000

$53,000

$54,000

$55,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016


But because of its high income taxes—Minnesota has the third highest top rate of income tax in the coun-try—a hefty chunk of this is taken in taxes. In 2009, Minnesotans’ disposable income was 89.4 percent of their total income. By 2016, that was down to 86.2 percent, as Figure 6 shows.

Though Minnesota’s growth in total personal income kept pace with the national average, a majority of states still outperformed Minnesota. As shown in Figure 7, Minnesota’s per capita income growth from 2000 to 2016 ranked 32nd overall among the states.6

6 Down from 30th for 2000 to 2015.


PAGE 5

Figure 6: Real per Capita Income and per Capita Disposable Income, 2000-2016

Source: Bureau of Economic Analysis (2016 Dollars)

$30,000

$35,000

$40,000

$45,000

$50,000

$55,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

United States, Real per capita income

Minnesota, Real per capita income

United States, Real per capita disposable income

Minnesota, Real per capita disposable income


Figure 1: Real per Capita Income Growth, 2000 to 2016


-5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55%

NevadaDelaware

GeorgiaMichiganColorado

ArizonaNorth Carolina

FloridaIndiana

IdahoMissouri

IllinoisNew Jersey

OhioOregon

South CarolinaKentucky

WisconsinTennesseeMinnesota

AlabamaMaine

WashingtonMaryland

ConnecticutVirginia

New HampshireMississippi

West VirginiaNew York

PennsylvaniaUtah

New MexicoMassachusetts

CaliforniaTexas

IowaRhode Island

KansasNebraska

HawaiiArkansasVermont

AlaskaDistrict of Columbia

South DakotaMontana

LouisianaOklahomaWyoming

North Dakota

U.S. Average

PAGE 6

Figure 7: Real per Capita Income Growth, 2000-2016


-5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55%

DelawareGeorgia

MichiganColorado

ArizonaNorth Carolina

FloridaIndiana

IdahoMissouri

IllinoisNew Jersey

OhioOregon

South CarolinaKentucky

WisconsinTennesseeMinnesota

AlabamaMaine

WashingtonMaryland

ConnecticutVirginia

New HampshireMississippi

West VirginiaNew York

PennsylvaniaUtah

New MexicoMassachusetts

CaliforniaTexasIowa

Rhode IslandKansas

NebraskaHawaii

ArkansasVermont

AlaskaDistrict of Columbia

South DakotaMontanaLouisiana

OklahomaWyoming

North Dakota

U.S. Average


Figure 8: Real per Capita Dis posable Income Growth, 2000-2016


0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

NevadaDelaware

GeorgiaMichigan

FloridaColorado

North CarolinaIndianaArizona

MissouriIllinoisIdaho

OregonNew Jersey

South CarolinaOhio

TennesseeKentucky

WisconsinMinnesota

AlabamaMaine

MarylandWashington

VirginiaNew York

MississippiWest Virginia

ConnecticutNew Hampshire

IowaUtah

TexasNew Mexico

PennsylvaniaNebraska

Rhode IslandArkansas Hawaii

CaliforniaKansas

MassachusettsVermont

AlaskaSouth Dakota

District of ColumbiaMontanaLouisiana

OklahomaWyoming

U.S. Average

Figure 8: Per Capita Disposable Income Growth, 2000-2016

Source: U.S. Bureau of Economic Analysis (2016 Dollars)

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

North Dakota Wyoming

Oklahoma Louisiana Montana

District of Columbia South Dakota

AlaskaVermont

Massachusetts Kansas

CaliforniaHawaii

ArkansasRhode Island

Nebraska Pennsylvania New Mexico

TexasUtahIowa

New Hampshire Connecticut

West Virginia MississippiNew York

Virginia Washington

MarylandMaine

Alabama Minnesota Wisconsin Kentucky

TennesseeOhio

South Carolina New Jersey

OregonIdahoIllinois

MissouriArizonaIndiana

North Carolina Colorado

FloridaMichiganGeorgia

DelawareNevada

U.S. Average

Figure 8: Real per Capita Dis posable Income Growth, 2000-2016


0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

NevadaDelaware

GeorgiaMichigan

FloridaColorado

North CarolinaIndianaArizona

MissouriIllinoisIdaho

OregonNew Jersey

South CarolinaOhio

TennesseeKentucky

WisconsinMinnesota

AlabamaMaine

MarylandWashington

VirginiaNew York

MississippiWest Virginia

ConnecticutNew Hampshire

IowaUtah

TexasNew Mexico

PennsylvaniaNebraska

Rhode IslandArkansas Hawaii

CaliforniaKansas

MassachusettsVermont

AlaskaSouth Dakota

District of ColumbiaMontanaLouisiana

OklahomaWyoming

U.S. Average


The story is much the same with disposable income. Over the last 16 years, as shown in Figure 8, Minneso-ta ranks 31st among the states in per capita growth of disposable income.7

Personal income can be separated into three categories: labor income, capital income, and transfer income. As Figure 9 shows, Minnesota has experienced much stronger growth in transfer income—e.g., Social Security, Medicaid, Medicare, welfare, and other government program distributions—than in other catego-ries, compared to the nation as a whole.

As a result of this, as Figure 10 shows, the growth in government transfer payments accounts for 47 percent of the increase in Minnesota’s personal income gains since 2000.

7 Up from 34th in 2016.

PAGE 8

Figure 9: Real per Capita Income Growth by Component of Income, 2000-2016


9.0%13.3%

59.9%

9.4% 10.2%

69.1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Labor Capital Transfer


c. Household Income

Another measure of the typical family’s wellbeing is median household income.

On this measure, the median Minnesota household earns a higher income than the median U.S. house-hold. As Figure 11 shows, median household income in Minnesota was $63,488 in 2016, 13.8 percent above the national median of $55,775.8

8 Respectively $61,481; 15 percent; and $53,657 in 2016’s report.


Figure 10: Sources of Growth of Real per Capita Income by Component of Income, 2000-2016


Labor income41%

Capital income12%

Transfer income47%


A large factor behind Minnesota’s relatively high median household income is the fact that our state has a greater than average percentage of households with two or more income earners. As Figure 12 shows, house-holds with two workers account for 33.8 percent of Minnesota households, but only 28.4 percent of house-holds nationally.9 Minnesota also has a smaller portion of households with one worker or no workers.

9 Respectively 33.6 percent and 28.2 percent in 2015.

PAGE 10

Figure 11: Median Household Income for the U.S. and Minnesota, 2000-2015

Source: Census Bureau, (2015 Dollars)

$45,000

$50,000

$55,000

$60,000

$65,000

$70,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Minnesota United States


3. JOBS

Here we assess the state of Minnesota’s labor market. We look at four measures: job growth, unemploy-ment, labor force participation, and job gains and losses by industrial sector.

a. Job Growth

Since 2000, the rate of job growth in Minnesota has lagged the nation as a whole.

As Figure 13 shows, Minnesota fell behind between 2005 and 2008. It recovered somewhat from 2010, but in each of the last five years the rate of job growth in Minnesota has been below the national average.

PAGE 11

Figure 12: Proportion of Households by Number of Workers, 2015

Source: Census Bureau

26.8%

38.2%

28.4%

6.7%

23.7%

35.0%33.8%

7.5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

No Workers 1 Worker 2 Workers 3 or More Workers



Figure 14 shows that between 2000 and 2016, Minnesota ranked 28th among the 50 states and the District of Columbia in the rate of job creation.10

10 Unchanged from 28th in 2016’s report.

PAGE 12

Figure 13: Employment Growth in the U.S. and Minnesota, (2000=100)

Source: Bureau of Labor Statistics

92

94

96

98

100

102

104

106

108

110

112

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016



Figure 14: Employment Growth, 2000-2016


-10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40%

MichiganOhio

MississippiConnecticut

IllinoisWest Virginia

New JerseyMaine

AlabamaIndiana

Rhode IslandLouisianaWisconsin

PennsylvaniaMissouriKansas

VermontKentuckyArkansas

IowaMassachusetts

New HampshireDelaware

MinnesotaTennessee

New YorkOklahoma

GeorgiaMaryland

South CarolinaNorth Carolina

NebraskaVirginia

New MexicoCalifornia

OregonSouth Dakota

AlaskaWyomingColorado

HawaiiWashington

FloridaMontana

District of ColumbiaArizona

IdahoNevada

TexasNorth Dakota

Utah

U.S. Average


b. Unemployment Rate

In recent years, Minnesota’s unemployment rate has been below the national average, as Figure 15 shows. Through 2016, Minnesota’s average unemployment rate of 3.9 percent was well below the national average of 4.7 percent, although the gap narrowed somewhat.

c. Labor Force Participation Rate

Minnesota’s labor force participation rate—69.5 percent in 2016—has long been among the highest in the country. But demographic changes are impacting Minnesota’s labor force. As Figure 16 shows, over the last 16 years, as the nation’s participation rate has declined due to an aging population, so has Minnesota’s, by 5.9 percentage points since 2000.

PAGE 14

Figure 15: Unemployment Rates in the U.S. and Minnesota -2016 , 2000


0%

2%

4%

6%

8%

10%

12%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016



d. Job Growth by Industry

Jobs may be growing in Minnesota at close to the same rate as the U.S. as a whole, but what types of jobs are we getting?

Figure 17 shows the Gross Value Added11 (GVA) associated with the average job in various occupational categories as well as the percentage increase or decrease in those jobs since 2000. In some occupations with a high GVA per job, such as mining, information, and manufacturing, the number of jobs has stagnated or even fallen. Mining & Logging, for example, generated $447,603 per job in 2016 and Information $319,596. But, in the previous sixteen years, Minnesota lost 23.5 percent of its jobs in Mining & Logging and 26.9 percent of those in Information. In contrast, the fastest growing occupations, Health Care and Educational Services, have a relatively low GVA per job. Health Care jobs, for example, generate an average of $88,761 of GVA annually, but jobs there have increased by 60.8 percent since 2000. Educational Services jobs generate an average of $58,239 of GVA annually, and employment in that sector has risen by 61.2 percent over the same period. For as long as this continues to be the case, net job growth may not imply rising per capita GDP.

11 Another measure of the value of goods and services produced in an area, industry, or sector of an economy.

PAGE 15

Figure 16: Labor Force Participation Rates in the U.S. and Minnesota, 2000-2016


55%

60%

65%

70%

75%

80%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016



ii. the twin cities laG other urban centers and Greater minnesota Performs Poorly comPared to neiGhbors

Minnesota has long been noted for the diversity of its economy. Northern Minnesota has a long history of logging and mining. The southern and western areas have a large agricultural base. There are manufactur-ing clusters dotted around the state, such as St. Cloud. Rochester is a hub of the healthcare industry. And the Twin Cities are a center of high-value innovation. To capture some of this variation, we look here at some of the economic statistics for the Twin Cities and Greater Minnesota. we find that, so far this century, the Twin Cities lag comparable urban areas for GDP and job growth. Across Minnesota, the Twin Cities areas have led in job growth, but southern and western counties have led in income growth. Comparing GDP growth in Minnesota’s metropolitan statistical areas (MSAs) to those of neighboring states, shows that our state has lagged.

1. ThE TwIn CITIES METrOPOLITAn ArEA IS FALLInG BEhInD COMPArABLE URBAN AREAS

The Twin Cities are the state’s dominant economic center. To get a sense of how they are performing, this section takes a look at GDP growth and job creation to see how the Twin Cities metropolitan area com-pares with the 15 largest MSAs by GDP.

PAGE 16

Figure 17: Minnesota GVA and Job Growth

Sources: Bureau of Labor Statistics; Bureau of Economic Analysis

-50%

-30%

-10%

10%

30%

50%

70%

90%

-$300,000

-$200,000

-$100,000

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$300,000

$400,000

$500,000

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Gross Value Added per Job, 2016 Change in Jobs, 2000-2016


a. Gross Domestic Product

Since the beginning of the century, GDP growth in the Twin Cities metropolitan area has lagged behind many of the nation’s more dynamic cities. Figure 18 shows the GDP growth between 2001 and 2016 for the fifteen MSAs with the largest GDP in 2016. Minneapolis/St. Paul is now ranked twelfth.

b. Job Creation

The picture is similar with regard to job creation, as Figure 19 shows. The Twin Cities lag behind other major metropolitan areas, ranking 11th out of the 15.12

12 The charts corresponding to Figures 18 and 19 in last year’s report were based on a different selec-tion of MSAs and are not directly comparable.

Figure 18 : Percentage Change in Real GDP, Top 15 MSAs, 200 1 - 201 6

Source: Bureau of Economic Analysis (2009 dollars)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

San

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Hou

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Metro Average


It should be noted, too, that some of the MSAs that have done worse than the Twin Cities over this period have widely acknowledged structural problems that have built up over decades. The Twin Cities are not in the position of, say, Detroit or Chicago, but that should not be the relevant standard. When the field is nar-rowed to MSAs without obvious long-term problems, and with which the Twin Cities compete for business and job creation, the region has clearly trailed most other large urban areas.

1. GrEATEr MInnESOTA

Policymakers in St. Paul all too often fail to see much beyond highways 494 and 694. Here, we take a look at Minnesota beyond the Metro. We look at employment growth, per capita incomes, and GDP for Minneso-ta’s counties. For comparison, we also look at MSAs in neighboring states.

a. Employment Growth

Figure 20 shows that the strongest employment growth springs from the suburban and exurban areas in the western portion of the Twin Cities and along the St. Croix. In Greater Minnesota, such as along the Minne-sota River valley, however, the number of jobs has fallen.

Figure 19: Percentage Change in Total Employment, 2000-2015


-10%

0%

10%

20%

30%

40%

50% Metro Average

b. Per Capita Incomes

Per capita incomes remain much higher in Hennepin and Carver counties than elsewhere. However, in-comes are catching up across Minnesota, as Figure 21 shows. The most substantial gains have occurred in the agricultural southwest portion of Minnesota. By contrast, growth has been lower in the urban counties, which already had high levels, and those towards the northeast of the state, where they were lower.


Figure 20: Change in Total Employment, 2000-2015


PAGE 19

Figure 20: Change in Total Employment, 2000-2015


< -13.1%

-13.1% to 0%

0% to 12.9%

13% to 25.9%

26% to 39.9%

> 40%

Growth of productivity


c. Gross Domestic Product

Over the period from 2001 to 2016, Mankato and Rochester show the strongest growth in real GDP among Minnesota’s MSAs. As Table 1 shows, rochester’s GDP grew by 35.5 percent, behind Mankato’s at 45.1 percent. In contrast, the Twin Cities area GDP grew by 23.1 percent.

Though growth might be strongest in Rochester and Mankato, only the latter breaks into the top ten when compared with the thirty MSAs in Minnesota and bordering states. Fargo and Bismarck, North Dakota, take the top two spots. Notably, three of the top ten cities are located in Iowa.

PAGE 20

Figure 21: Change in Real Personal Income Per Capita, 2000-2015


PAGE 20

Figure 21: Change in Real Personal Income Per Capita, 2000-2015


0% to 20%

21% to 40%

41% to 60%

61% to 80%

81% to 100%


Table 1: GDP by MSAs in Minnesota and Bordering States

MSA GDP Percent Change2001 2015

Bismarck, ND $3,919 $7,101 81.2 percentFargo, ND-MN $8,021 $13,713 71.0 percentSioux Falls, SD $10,591 $16,329 54.2 percentCedar Rapids, IA $10,940 $16,552 51.3 percentDes Moines-West Des Moines, IA $28,595 $41,422 44.9 percentMadison, WI $29,462 $41,894 42.2 percentEau Claire, WI $5,129 $7,280 41.9 percentDubuque, IA $3,561 $4,972 39.6 percentMankato-North Mankato, MN $3,214 $4,429 37.8 percentRapid City, SD $4,198 $5,686 35.4 percentGrand Forks, ND-MN $3,266 $4,400 34.7 percentRochester, MN $7,623 $10,263 34.6 percentIowa City, IA $6,369 $8,391 31.7 percentWaterloo-Cedar Falls, IA $6,331 $8,211 29.7 percentAmes, IA $3,391 $4,336 27.9 percentWausau, WI $5,353 $6,810 27.2 percentMinneapolis-St. Paul-Bloomington, MN-WI

$177,712 $223,718 25.9 percent

La Crosse-Onalaska, WI-MN $4,971 $6,256 25.8 percentOshkosh-Neenah, WI $6,996 $8,780 25.5 percentSioux City, IA-NE-SD $6,657 $8,144 22.3 percentSt. Cloud, MN $6,860 $8,390 22.3 percentAppleton, WI $9,212 $11,023 19.7 percentMilwaukee-Waukesha-West Allis, WI $77,586 $91,738 18.2 percentGreen Bay, WI $14,207 $16,716 17.7 percentDavenport-Moline-Rock Island, IA-IL $14,964 $17,520 17.1 percentDuluth, MN-WI $9,557 $11,095 16.1 percentSheboygan, WI $5,091 $5,887 15.6 percentFond du Lac, WI $3,686 $4,139 12.3 percentJanesville-Beloit, WI $4,905 $5,386 9.8 percentRacine, WI $7,104 $6,824 -3.9 percent

Source: Bureau of Economic Analysis (millions of 2009 dollars)

Rank Area 2001 2016% growth, 2001-2016

1 Fargo, ND-MN $7,799 $13,534 73.52 Bismarck, ND $3,977 $6,890 73.23 Sioux Falls, SD $9,493 $15,768 66.14 Des Moines-West Des Moines, IA $28,118 $43,873 56.05 Mankato-North Mankato, MN $3,357 $4,871 45.16 Cedar Rapids, IA $10,967 $15,839 44.47 Eau Claire, WI $5,077 $7,325 44.38 Madison, WI $29,854 $42,029 40.89 Grand Forks, ND-MN $3,333 $4,612 38.4

10 Dubuque, IA $3,500 $4,827 37.911 Iowa City, IA $6,330 $8,661 36.812 Ames, IA $3,193 $4,358 36.513 Rochester, MN $8,051 $10,910 35.514 Wausau, WI $5,167 $6,764 30.915 St. Cloud, MN $6,815 $8,749 28.416 Waterloo-Cedar Falls, IA $6,206 $7,936 27.917 La Crosse-Onalaska, WI-MN $5,005 $6,321 26.318 Oshkosh-Neenah, WI $7,191 $9,060 26.019 Minneapolis-St. Paul-Bloomington, MN-WI $176,780 $217,566 23.120 Fond du Lac, WI $3,474 $4,183 20.421 Appleton, WI $9,137 $10,943 19.822 Rapid City, SD $4,716 $5,637 19.523 Green Bay, WI $13,712 $16,321 19.024 Sioux City, IA-NE-SD $7,117 $8,290 16.525 Duluth, MN-WI $9,681 $11,117 14.826 Milwaukee-Waukesha-West Allis, WI $77,852 $89,155 14.527 Janesville-Beloit, WI $4,908 $5,617 14.428 Davenport-Moline-Rock Island, IA-IL $15,319 $16,765 9.429 Sheboygan, WI $4,925 $5,326 8.130 Racine, WI $7,130 $6,799 -4.6


iii. the ProsPects for economic Growth in minnesota are mixed

Parts I and II of this report looked at Minnesota’s economic performance in recent years up to the pres-ent day. What might the future hold? What matters for Minnesotans is per capita or per person economic growth. If the number of Minnesotans increases by 50 percent and state GDP also increases by 50 percent, then the average person is no better off. With this in mind, here we identify the sources of per capita in-come growth and look at indicators and prospects for Minnesota.

1. SOUrCES OF PEr CAPITA InCOME GrOwTh

There are three sources of per capita GDP growth: an increase in the Labor Force Participation rate; a rise in capital per worker; and higher Total Factor Productivity.13

Older economic growth theories held that there were constant returns to scale. This means that any in-crease of labor or capital will increase the rate of growth.14 Subsequent theories held that there were, beyond a point, diminishing returns. In this case, the addition of an extra unit of labor or capital would increase output, but by less than the addition of the previous unit. According to this theory, increases in long run economic growth came from improvements in technology which were driven by factors, such as innova-tion, which were determined outside the model.15

Still more modern, are theories of increasing returns to scale. This theory states that knowledge and en-trepreneurship are key for economic growth in the long run. These economists argue that policymakers can have some influence on this and on technological improvements through education and research and development spending. As a result, with these factors being determined inside the model they are known as endogenous growth theories.16 The two key factors, technological change and productivity, are what make up Total Factor Productivity. Theory and evidence have shown that this is the main driver of long-run growth.17

13 David Weil, Economic Growth (Prentice Hall, New Jersey), 2004.14 Roy F. Harrod, “An Essay in Dynamic Theory,” The Economic Journal, Vol. 49, No. 193, 1939. pp. 14- 33 and Evsey Domar, “Capital Expansion, Rate of Growth, and Employment,” Econometrica, Vol. 14, No. 2, 1946. pp. 137-147.15 Robert M. Solow, “A contribution to the theory of economic growth,” Quarterly Journal of Econom-ics, Vol. 70, No. 1, 1956. pp. 65-94.16 Paul Romer, “The Origins of Endogenous Growth,” The Journal of Economic Perspectives, Vol. 8, No. 1, 1994. pp. 3-22 and David Warsh, Knowledge and the Wealth of Nations: A story of economic discovery (W.W. Norton & Company, New York), 2006.17 YiLi Chien, What Drives Long-Run Economic Growth? available at https://www.stlouisfed.org/on-the-economy/2015/june/what-drives-long-run-economic-growth (accessed August 2, 2017).


a. Minnesota’s Labor Force Participation Rate

The labor force participation rate is the percentage of the population that is either employed or unemployed and actively seeking work.

GDP per capita is defined as total GDP divided by the number of people in the state. If more of those peo-ple are working then there is more GDP to divide among them. As a result, a higher Labor Force Participa-tion Rate can drive greater per capita GDP.

PAGE 21

Figure 22: The Sources of Per Capita GDP Growth

Source: Louis D. Johnston, How Can Minnesota Stay Above Average?

Growth of participation

rate

Growthof percapita

income

Growth of capital per

worker

Growth of productivity


The outlook here is not good, as Figure 23 shows. The decline in Labor Force Participation shown in Figure 15 has been driven largely by the retirement of Baby Boomers, those born between 1946 and 1964. As this trend continues, the Participation Rate will continue to decline. The Minnesota State Demographic Center projects that the Labor Force Participation rate will fall to 64.6 percent in 2035, as shown in Figure 23.18

Labor Force Productivity

Minnesota’s dwindling share of workers will be able to generate the wealth to maintain growth and sustain retirees only if they become more productive. As we saw in Section I, there is scope for this in Minnesota. In the next two sections, we look at ways productivity might be improved with increased capital per worker and improved Total Factor Productivity (TFP). But here we can say a few words about the prospects for the average Minnesota worker’s productivity.

Minnesota’s Brain Drain

Minnesota’s per worker productivity will suffer if more productive workers move out of the state and less productive workers move in. There is evidence to show that this is currently happening. Using income as a proxy for productivity, Figure 24 shows that Minnesota attracts low-income residents and loses higher-in-

Figure 23: Minnesota’s Labor Force Participation Rate, 2016-2050

Source: Minnesota State Demographic Center

61%

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18 MN State Demographic Center, In the shadow of the Boomers: Minnesota’s labor force outlook (MN State Demographic Center, St. Paul), 2013.


come ones. Furthermore, these losses are not limited to the so-called “rich” who might be fleeing the state’s high top rate of tax. Between 2011 and 2015, Minnesota saw a net outflow of people earning more than a modest $25,000 annually.

There is evidence that Minnesota’s high personal tax rates are a factor in these movements.19 As a share of personal income, state-local taxes are higher in Minnesota than in all but seven other states, as Figure 25

Figure 24: Net Flow of Taxpayers and Dependents to Minnesota by Income of Primary Taxpayer, 2011-2015

Source: Internal Revenue Service, Statistics Income Division, U.S. Population Migration Data

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19 Peter J. nelson, Minnesotans on the Move to Lower Tax States 2016 (Center of the American Ex-periment, Minneapolis), 2016, and Peter J. nelson, Do Minnesotans Move to Escape the Estate Tax? (Center of the American Experiment, Minneapolis), 2016. For more general evidence on the impact of taxes on interstate migration see Roger Cohen, Andrew Lai and Charles Steindel, “State Income Taxes and Interstate Migration,” Business Economics, Volume 49, Issue 3, July 2014. pp. 176-190, Enri-co Moretti and Daniel wilson, “The Effect of State Taxes on the Geographical Location of Top Earn-ers: Evidence from Star Scientists,” Federal Reserve Bank of San Francisco Working Paper, No. 215-06, March 2017.


shows. Minnesota is one of the 43 states to have its own income tax, but the top rate—9.850 percent on incomes over $156,911—is higher than anywhere else apart from California, Maine, and Oregon. Equally significant, perhaps, is the fact that Minnesota’s lowest income tax rate of 5.35 percent is higher than the highest tax bracket in 23 states.

A common misconception is that this out-migration is primarily accounted for by “snow birds,” older Min-nesotans leaving the state for friendlier climates. This is not the case. As Figure 26 shows, between 2011 and 2015 Minnesota lost residents in every age group. Those less than 26 years old made up a large share of the loss. People aged 45 to 54—people in the prime of their working lives—also made up a substantial share of the loss.

PAGE 1

Figure 24: Net Flow of Taxpayers and Dependents to Minnesota by Income of Primary Taxpayer, 2011 to 2015

Source: Internal Revenue Service

Figure 25: State-Local Tax Burdens per Capita as a Percentage of Income

Source: The Tax Foundation

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b. Capital per Worker

Capital per worker refers to the amount of capital each worker has to work with.

Increasing capital per worker makes workers more productive, until the point where diminishing returns set in. By enabling workers to produce more, it raises wages and GDP per capita. Growth in the capital available to Minnesota’s workers will be driven by the amount of investment capital business owners have access to. This will move with the expected after-tax rate of return on investment, which is a measure of the flow of income generated by an investment in the stock of capital. It is primarily affected by tax rates.20

Evidence indicates that corporate income taxes have a large negative effect on aggregate investment and entrepreneurial activity.21


Figure 26: Net Flow of Taxpayers and Dependents to Minnesota by Age of Primary Taxpayer, 2011-2015


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20 Along with the growth rate of TFP, discussed below. See Congressional Budget Office, The 2017 Long-Term Budget Outlook (Congressional Budget Office, washington D.C.) March 2017. 21 Djankov et al, “The Effect of Corporate Taxes on Investment and Entrepreneurship,” national Bu-reau of Economic Research working paper, No. 13756, 2008.


Figure 26: Net Flow of Taxpayers and Dependents to Minnesota by Age of Primary Taxpayer, 2011-2015


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Taxation in Minnesota

Minnesota’s taxes are not conducive to capital investment.

The Tax Foundation ranks Minnesota 46th out of the 50 states for its business tax climate. Minnesota im-poses a deduction schedule for natural resource depletion on top of the federal one, and is one of only eight states to have an Alternative Minimum Tax on corporations. These add another layer of compliance diffi-culties beyond the federal. Furthermore, as Figure 28 shows, while we exempt items like food and clothing, we have the eighth highest state sales tax in the country.

PAGE 25


Figure 27: Sources of Growth in Capital per Worker

Growth ofcapital per

worker Returns on investment


More importantly perhaps, Minnesota’s top rate of Corporate Income Tax is 9.8 percent. As Figure 29 shows, this is the third highest in the U.S. Only Iowa (12 percent) and Pennsylvania (9.99 percent) have higher rates. Evidence shows that corporate income tax rates are a big influence in foreign investment deci-sions. 22

PAGE 3

Figure 28: State Sales Tax Rates

Source: The Tax Foundation’s State Business Tax Climate Index

Figure 29: Top Rates of Corporate Income Tax


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Countries increasingly have to compete on a global level for investment capital. Added to the federal Corporate Tax rate of 35 percent—one of the highest in the developed world—Minnesota has one of the highest rates of corporate taxation of any advanced economy. The state’s relatively uncompetitive position can be seen in its poor recent record in attracting venture capital, shown in Figure 30. In 2015, the average American worker had $391 of venture capital behind him or her. In Minnesota, the figure was just $108.

PAGE 3

Figure 28: State Sales Tax Rates


Figure 29: Top Rates of Corporate Income Tax


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In turn, the effects of this lack of venture capital can be seen in Minnesota’s relatively poor record on new business creation. Figure 31 shows the share of new and young businesses (those aged 0 through 5 years) for Minnesota and the U.S. These businesses are of vital economic importance. They create the majority of new jobs and the small companies of today are the big companies of tomorrow. In 2000, new and young businesses as a share of all businesses were 41 percent in Minnesota and 43 percent nationally. By 2014, that number had fallen nationally to 34 percent but in Minnesota to 30 percent.

PAGE 4

Figure 30: Venture Capital per Worker, 2002-2015

Source: PwC/NVAC Money Tree Report, Bureau of Economic Analysis

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c. Total Factor Productivity

The third source of per capita GDP growth is an increase in Total Factor Productivity. This is a measure of technological improvement and productivity.

The first, technological improvement, simply refers to the improvement in the quality of capital, rather than its quantity (which is discussed above). A farm’s workers, for example, might initially become more pro-ductive if they were given more tractors. But, if they had more than one tractor each or too many to operate usefully on the farm’s land, then any further increase in the number of tractors would bring diminishing returns. By contrast, the adoption of new technology, such as enhancement of seed planting efficiency, will raise productivity by raising the quality of technology.

The second refers to the skill with which inputs such as land, labor, and capital are combined. It might be termed entrepreneurship. An example here would be Henry Ford’s pioneering of the production line tech-nique which enabled his workforce to produce a vastly greater quantity of motor cars.

PAGE 5

Figure 31: New and Young Businesses as a Share of All Businesses, 2000-2014

Source: Census Bureau

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Research shows that U.S. states with better educational attainment and greater investment in research and development see faster growth in TFP.23

Education in Minnesota

Education can play an important economic role.

First, we can think of the workforce in the same way we think of our capital stock. Increasing the invest-ment in our stock of human capital can yield rewards just as can investments in physical capital.24

Growth in Total Factor

Productivity Research &

Development Spending

Educational Attainment

PAGE 30

Figure 32: Sources of Growth in Total Factor Productivity

Table 2: Minnesota’s Education Achievement Indicators

National Assessment of Educational Progress

State average

Rank National Average

8th grade math 47.80% 2 32.1% 8th grade reading 39.70% 6 32.7% Achievement Gains 8th grade math +3.5% 30 +5.2% 8th grade reading +2.5% 25 +2.7% Poverty Gap Reading gap 31.2% 45 27.5% Math gap 29.8% 41 27.8% Achieving Excellence Math excellence 13.3% 3 7.8% High School Graduation Graduation rate 88.0% 7 81.0% Advanced Placement High AP test scores 29.1% 17 29.3% GRADE C 6 C-

Source: Education Week Research Center

23 roberto Cardarelli and Lusine Lusinyan, “U.S. Total Factor Productivity Slowdown: Evidence from the U.S. States,” IMF Working Paper 15/116, 2015. The paper uses average years of schooling as proxy for “educational attainment.” This, however, is a measure of an input—time in school—when “educa-tional attainment” is an output—test scores, for example. For that reason, our analysis looks at educa-tional attainment directly using measures of academic performance. 24 Gary S. Becker, Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education (University of Chicago Press, Chicago), 1993.


Minnesota’s educational system has long been one of its economic trump cards. Table 2 shows comparisons of the state’s educational attainment with the national average. Minnesota compares favorably on a range of educational outcomes, though the mediocre performance on AP test scores should be noted. Overall, if a focus on academic excellence and these standards can be maintained, education will continue to boost the state’s economic future.

Table 2: Minnesota’s Education Achievement Indicators

National Assessment of Educational Progress State average Rank National Average

8th grade math 47.80 percent 2 32.1 percent8th grade reading 39.70 percent 6 32.7 percentAchievement Gains 8th grade math +3.5 percent 30 +5.2 percent8th grade reading +2.5 percent 25 +2.7 percentPoverty GapReading gap 31.2 percent 45 27.5 percentMath gap 29.8 percent 41 27.8 percentAchieving ExcellenceMath excellence 13.3 percent 3 7.8 percentHigh School GraduationGraduation rate 88.0 percent 7 81.0 percentAdvanced PlacementHigh AP test scores 29.1 percent 17 29.3 percentGRADE C 6 C-

Source: Education Week Research Center

Research and Development Spending in Minnesota

Broadly speaking, if education can be seen as improving the quality of human capital, research and devel-opment (R&D) can be seen as improving the quality of physical capital.

Figure 33 shows the R&D intensity for Minnesota and the national average. This is the ratio of total R&D performed in a state to its state GDP. It may come as a surprise to Minnesotans who are apt to think of their state as a technology leader, but the state currently lags the national average on this measure of R&D spending. Between 2003 and 2011, as a share of GDP, Minnesota devoted more resources to R&D than the national average. But since 2012, our state has lagged the nation. In 2014 the figure for the U.S. was 2.53 percent, in Minnesota it was 2.47 percent.


This spending has, however, brought impressive results in terms of patents. As Figure 34 shows, Minneso-tans generated 885 patents per million people in 2015, the fourth best in the U.S.

PAGE 7

Figure 33: R&D Intensity, 2000-2014

Source: National Science Foundation’s National Patterns of R&D Resources

Figure 34: Patents per Million of Population, 2015

Source: U.S. Patent Office, Bureau of Economic Analysis

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iV. conclusion – the state of the state

Our findings for 2017 echo those of 2016.

Overall, the evidence reviewed in sections I and II shows that, so far this century, Minnesota has not been one of the country’s stronger economic performers. Over the past 16 years, the state’s GDP grew at a rate below the national average. The state’s per capita personal income is higher than average, but growth is just average and even this moderate growth is a result of increases in transfer income, not income related to productive activities. Minnesota ranks in the bottom half of states with respect to both income growth and job growth. A high median household income and a low unemployment rate are positive factors. Yet, as discussed, these apparent strengths do not necessarily reflect superior overall economic performance by Minnesota. The state’s economy is not in the doldrums, but the sum of these measures points to average economic performance at best. Mediocre continues to be an apt label, considering the many advantages Minnesota still possesses that should produce stronger growth.

Looking to the future, Minnesota will face economic challenges. The state’s relatively well educated work-force will be a definite asset if academic standards are maintained. But Minnesota also faces some head-winds that could hinder future growth. As Baby Boomers retire, the state’s labor force will shrink, providing a drag on growth for perhaps the next two decades. An increasing share of seniors will need workers in productive jobs to support them and the growing number of workers who will be required in low produc-tivity sectors such as personal healthcare services. Yet, the high rate of corporate tax will deter the invest-ment needed to make workers more productive. And Minnesota lags the rest of the nation in Research & Development spending.

Minnesota retains some historic advantages, but prosperity should not be taken for granted. Minneso-tans and their policymakers will have to make their state more competitive to assure Minnesota’s future prosperity.

PAGE 7

Figure 33: R&D Intensity, 2000-2014

Source: National Science Foundation’s National Patterns of R&D Resources

Figure 34: Patents per Million of Population, 2015

Source: U.S. Patent Office, Bureau of Economic Analysis

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8421 Wayzata Boulevard Suite 110Golden Valley, MN 55426

americanexperiment.org

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To obtain copies of any of our publications please contact American Experiment at (612) 338-3605 or [email protected]. Publications also can be accessed on our website at www.AmericanExperiment.org.

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Center of the American Experiment develops and promotes policies which encourage economic growth and a culture of individual, family and civic responsibility. Our work—firmly rooted in conservative and free market principles—focuses on original research, op-eds, public forums, legislative briefings, and various other means for turning essential ideas into tangible action.

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o obtain copies of American Experiment’s recent reports—Steven F. Hayward and Peter Nelson’s “Energy Policy in Minnesota: The High Cost of Failure”, Amanda L. Griffith’s “No Four-Year Degree Required: A look at a selection of in-demand careers in Minnesota,” and Randall O’Toole’s “Twin Cities Traffic Congestion: It’s No Accident,” or to subscribe to the Center’s free quarterly magazine, Thinking Minnesota, email Peter Zeller at [email protected], or call (612) 338-3605.

t

Twin Cities

Traffic Congestion:

It’s No Accident

BY RANDAL O’TOOLE

No Four-YearDegree Required

AMANDA L. GRIFFITH PH.D.

Ollen R. Nalley Associate Professor and Associate Chair,

Department of Economics, Wake Forest University

A look at a selection of in-demandcareers in Minnesota

Steven F. Hayward and Peter J. nelSon

energy Policy in Minnesota:the High Cost of Failure

ISSUE 8

SUMMER 2017$4.95

How exonerated CEO Howard Root is using a

long and ugly court ordeal to seek judicial reform

THE ROOT CAUSE

TRAFFICCONGESTION

IS NO ACCIDENT

MnDOT and the Met Council intentionally

increase congestion to move people on

to bikes, buses

or light rail

After string of IT disasters, have state agencies learned any lessons?

ANOTHER FAILURE TO LAUNCH?

ISSUE 9FALL 2017$4.95

THINKING MINNESOTA • FALL 2017

WHOSE VALUES?schoolsEdinain

Educational excellence threatenedideologyby

the state of minnesota’ s economy: 2017 · 2018. 8. 18. · minnesota was once a strong performer...

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