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That Center of the American Experiment report on the Minnesota economy? It’s politics, not economics

MinnPost photo by Peter Callaghan
Minnesota will continue to be rich — it just won’t have as big of a lead over other states as it does now.

Last week, the Center of the American Experiment issued what it called a “groundbreaking paper” on the Minnesota economy, “Minnesota’s Economy: Mediocre Performance Threatens the State’s Future.” Their conclusion is stark:

Are Minnesota’s blue-state policies responsible for its economic underperformance? There is no question Minnesota’s higher tax and regulatory burdens add to the cost of doing business. In recent years, Minnesota has increased these burdens while a number of other states, such as North Carolina, Indiana and Tennessee, have taken serious steps to reduce them. Without any other obvious weak points—beyond the inescapable realities of the state’s northern locale—Minnesota’s tax and regulatory burdens are among the only suspects at the scene of Minnesota’s mediocre economic performance.

Though it looks like a research paper, with 30 figures, 5 tables, and a page of footnotes in tiny print, the report is actually an advocacy document more akin to a 40-page op-ed than an academic study. In particular, the conclusion (that Minnesota must lower taxes and reduce regulatory burdens) is the starting point, with evidence marshalled to support that end. This is in line with the Center’s stated goal of formulating policies “that emphasize free enterprise, limited government, personal responsibility and government accountability.”

The research literature on economic growth and standards of living across states is much more nuanced than the Center’s paper lets on. In particular, average growth does not mean Minnesota’s performance is mediocre; rather, average growth is exactly what economic theory predicts for a high-income state like Minnesota.

The Center makes the following argument:

  1. Minnesota is growing at average or below average rates, depending on the measure chosen.
  2. There are three reasons why states grow at average or below average rates:
    • Poor ranking on social indicators such as education levels, health measures, and labor force participation.
    • High taxes
    • Burdensome levels of regulation

    Minnesota ranks high in social indicators, so it must be high taxes and regulations that lead to the state’s “mediocre performance.”

There are two problems with the Center’s argument: First, their assertions about taxes and regulation are not borne out by scholarly research, and second, they are missing a critical reason for slower growth that scholars across the political spectrum agree on.

Little correlation between taxes, regulation and growth

An enormous amount of academic work has been done over the past 30 years on the sources of economic growth across countries, states, and regions; yet the Center takes no account of it at all.

This is too bad, since we’ve learned an enormous amount about why some states grow rapidly while others don’t. Among the findings are:

  • There is no hard and fast relationship between taxes and economic growth. Some scholars read the literature as showing that taxes strongly affect growth while others contend that the same group of studies show no relationship.
  • There is no hard and fast relationship between regulations and economic growth. A nice recent illustration of this is here, where Menzie Chinn of the University of Wisconsin-Madison updates his annual look at the relationship between state-level growth and the American Legislative Exchange Council (ALEC) Economic Outlook Ranking.

Poor get richer, rich stay rich

However, there is a relationship between a state’s level of income and its growth rate. Specifically, research has shown time and again that states which start out with low levels of income per person grow faster than states that begin with higher levels of income per person. This phenomenon is known as income convergence, and shows up across countries, regions, provinces, prefectures, and states. (Robert Barro, a Harvard professor and fellow at the Hoover Institution, is the leading scholar in this area.)

A clear implication of income convergence is that high-income states, like Minnesota, tend to have below-average growth rates. That is, high income states don’t run away from the pack; instead, through movements of people, capital, and ideas, low income states catch up to the high income states by growing faster — but not forever.

For example, Figures 6 and 7 in the Center’s report show that South Dakota grew significantly faster than Minnesota from 2000 to 2015. In 2000, income per person in South Dakota was $ 36,110 (in 2009 dollars) while Minnesota’s was $48,055. By 2015 South Dakotans had almost reached Minnesota’s 2000 level, hitting $ 47,460. In the meantime, Minnesotans saw their per capita income continue to rise, to $54,431.

Yes, South Dakota grew twice as fast as Minnesota (1.8 percent per year versus 0.8 percent per year), and could catch up to Minnesota by 2028 if these growth rates stayed the same. However, another implication of the income convergence literature is that a state like South Dakota will see its growth rate slow as it gets closer to the leaders. Meanwhile, Minnesota will continue to be rich — it just won’t have as big of a lead over other states as it does now.

Other states to follow?

Finally, is Minnesota falling behind? Should we follow the examples of North Carolina, Indiana and Tennessee? Let’s take at income per capita, relative to the national average, for Minnesota versus these three states:

Real GDP per person, 2000–2015
Per capita real GDP in chained 2009 dollars, as ratio of U.S. average.

Minnesota, after losing ground in the 2000s, regained its 8 percent lead on the national average while North Carolina, Tennessee, and Indiana continued to lag behind. Perhaps the effects of their new tax and regulatory policies will show up in the years to come, but as of 2015 they have a long way to go to catch up to Minnesota.

Keeping our edge

How Can Minnesota Stay Above Average?” is the title of a talk I’ve been giving since 2009 (and wrote about in a couple of MinnPost columns here and here.) Terry Fitzgerald, an economist at the Federal Reserve Bank of Minneapolis, first studied this  topic back in 2003. I am happy that the Center of the American Experiment agrees that this is an important question to investigate and has joined the hunt for answers.

I hope that in the future, rather than starting with policy prescriptions, the Center will first look at the evidence, formulate hypotheses about Minnesota’s growth performance based on economic theory, and then test these hypotheses against the data. We can then have a fruitful conversation about a variety of policies that could boost Minnesota’s growth rate.

Comments (38)

  1. Submitted by RB Holbrook on 08/23/2016 - 11:26 am.

    Good Article

    This was a very good discussion of how to read and understand economic performance statistics.

    You also had one of the wryest bits of humor ever to appear in MinnPost:

    “I hope that in the future, rather than starting with policy prescriptions, the Center will first look at the evidence, formulate hypotheses about Minnesota’s growth performance based on economic theory, and then test these hypotheses against the data.”

    That will never happen. As you noted, the CAE (or, as I believe suits them better, Get Rid Of Slimy liberalS) is just another conservative advocacy group. That they play “think tank” every so often can’t change that fact.

  2. Submitted by Todd Hintz on 08/23/2016 - 12:10 pm.

    Real Story

    It’s funny how the narrative changes when you start digging into the details.

    Beating up the poor and the government have become a full time sport for a lot of people on a certain side of the isle. Those who aren’t wealthy are characterized as lazy, takers, and unwilling to pull themselves up by their bootstraps. Any efforts to leveling the playing field are painted as anti-business or base jealousy of those who have made it big.

    All the while the rich continue to get richer and the poor and middle class get a long ride on the pointed end of a stick.

    And the solution? More of the same that got us into this mess in the first place. Cut regulations because it’s “bad for business.” Never mind that it’s those very regulations that give us clean drinking water, safe cars, and workers who aren’t maimed and killed on the job.

    Government is not the problem and small government is not the solution. The only reason people fawn over the prospect of smaller government is because they want it so it’s ineffective and can’t monitor industry. Fewer inspectors, fewer regulators, and more sub-prime mortgages bundled with triple A ratings so a few people can make billions while the American economy (scratch that–world economy) collapses.

    They don’t care if you’re losing your job and house as long as they got theirs.

    On the local level here in Minnesota, look at the people who are fighting tooth and nail against light rail. They’ll give you all kinds of reasons why we shouldn’t do it, but the real motivation gets down to one and only one item: follow the money.

    Their donors have invested heavily in land in the outlying suburbs and for each dollar spent on light rail, it’s a dollar that can’t be spent on a sewer hookup in Rogers.

  3. Submitted by Frank Phelan on 08/23/2016 - 12:49 pm.

    What The Writter Misses

    Is the benefit of reducing government spending, specially transfer payments and the like. The have a deleterious effect on one’s spirit and economic ambition. I’m very concerned about this issue in relation to The Wilfs and the Pohlads. The government largesse they receive is a prime target for cutbacks.

  4. Submitted by Greg Kapphahn on 08/23/2016 - 12:59 pm.

    Thank You for the Factual Corrective

    It’s too bad the Star Tribune editorial staff doesn’t bother to seek out more accurate information before they tout conservative propaganda pieces,…

    as the solution to our very successful state’s supposed “problems.”

    • Submitted by Joe Musich on 08/23/2016 - 08:22 pm.

      Yes I too wondered …

      why the editorial staff would take such a position regarding the CAE opinion paper then I remembered all the other nonsense the editorial staff gives us on a regular basis, who owners the paper and who seems to be writing there these days. There are those out saying Trump’s end game is to create a conservative media empire. I wonder where some thing like that would fit today. Oh yea ! Bring back Clifford Simak. Journalism nowadays takes a back seat to capital in someways as it always has.

  5. Submitted by David Broden on 08/23/2016 - 01:05 pm.

    Minnesota Economic Growth- Some Missing Factors but Strong

    The CAE report and the Mn Post article both are deficient in real grasp of the MN economic growth status and vision forward. First lets all get off the claim that MN is not good for economic development due to north climate- how did we get to be the rail and then air transit hub to the pacfic and northwest? How did it happen that we have so many Fortune 500 companies etc.– we are hurting ourselves by this reference. Second we are definitely one of the best educated states at all levels and skill. As the pace of technology and economic change occurs are we adapting fast enough at all levels and are we retraining workers of all ages for the jobs of today and the future? Perhaps not as well as we can but likely that no other state is either. Third the economic development focus seems to be one service, low skill, and health care with few exceptions. States with a real solid vision foreward are looking at high tech high skilled jobs that are value added. MN does not appear to have a vision for the skilllled industries that create jobs of all categories and incomes- perhaps way too much on the low income jobs. Fourth– productivity– do we discussi productivity or are we too focused on hourly wage etc.- if we stress productivity and people earn a postion the wages and productivity rise. Also it is difficult to measure productivity of service work and low income job so any comment that MN productivity is low is off base. Bottom line is the MN economy is strong, needs mrore vision focus and needs to understand why some key companies which had job skill mix and income mix have left for elsewhere- some is simple movement others due to business climate and interest of the state and communities. The CAE study and this article may have stimulated a discussion.

    dAve Broden

  6. Submitted by Ray Schoch on 08/23/2016 - 02:49 pm.

    Thank you,

    …Professor Johnston, for providing some much-needed – and fact-based – balance to the typical anti-tax, anti-government screed from the CAE. Sometimes, they ask useful questions, but virtually always, it’s with an answer already in mind, which isn’t a good model to follow if you’re going to try to pass off the result as “research.”

  7. Submitted by David Broden on 08/23/2016 - 03:05 pm.

    Why to few comments on perhaps the central Issue Re: Minnesota

    It seems that the relatively few comments to the article on the economy may be an indication that the readers do not full a full understanding of how this topic is and should be the central point in discussion of the future of MN vision? Why does the topic not resonate with the readers in a more intense manner??? Lets have some serious dialogue re the future of MN jobs–service-high tech, management, mid level etc.What do we need and what type of companies do we need and how do we get them?

    Dave Broden

  8. Submitted by Brent Stahl on 08/23/2016 - 03:31 pm.

    Minnesota Business Climate

    Back in the late 1970s before switching careers, I did some writing for Corporate Report magazine, which for a while was a well-known monthly general interest business magazine published in the Twin Cities.

    One of the staff editors had a column, and practically every issue he raged against the “awful Minnesota business climate,” He would cite anecdotal evidence and some occasional unsystematic numbers about businesses moving to South Dakota or Texas. He would have fit right in with the group now running the Center of the American Experiment. It is a pity that they share a disinclination to consider countervailing data, more sophisticated analysis, and the broader context.

    Their business and economic arguments have not advanced a whit in at least 40 years.

  9. Submitted by Connie Sullivan on 08/23/2016 - 03:58 pm.

    Great article! I never took economics in college, so with each Johnston piece I get more informed about that field, and learn how a good economist analyzes a politically-tinged and non-academically-sound “report” like the CAE’s.

    I don’t have the tools to do this. Neither do most readers of MinnPost, and it goes without saying, that the CAE “report” authors depend on most Minnesotans not having those tools to see through their advocacy.

  10. Submitted by Charlie Quimby on 08/23/2016 - 08:17 pm.

    Two Observations

    You don’t have to know economics to spot the hole in the CAE’s growth claim. A five-year-old is growing a lot faster than its parent, but it’s a long way from getting the keys to the car, let alone being able to pay for one.

    From a few years ago, I recall seeing a presentation by the state demographer that showed when Minnesota was a mediocre performer on most comparative state indexes. Its rise to leadership coincided with increased state investment in education.

  11. Submitted by Paul Udstrand on 08/23/2016 - 08:49 pm.

    CAE has no credibility

    They have consistently and repeatedly produced poorly conceived and distorted work that is devoid of academic or intellectual integrity. Let’s hope local news outlets start taking this into consideration whenever CAE releases it’s “reports” in the future.

  12. Submitted by joe smith on 08/24/2016 - 07:08 am.

    It doesn’t take a study to show if you can be

    more profitable in a state where taxes are less and regulations are more business friendly, you move or start your business in that state. That doesn’t take a study and debate, it takes a calculator and a business man with half a brain.

    New York state did what Minnesota is doing now 30 years ago and have spent the past 7 years lessening taxes and regulations to attract new businesses. It is simple math.

    • Submitted by Theo Kozel on 08/24/2016 - 08:55 am.

      Reality strikes again

      Actually, business people with at least half a brain understand that there are a host of considerations about where to start a business- infrastructure, finding trained employees- which is why reality shows the barest sliver of a correlation between low taxes/less regulation and business success. You can triple down on conservative pabulum until you’re blue in the face: empirical evidence trumps dogma.

      • Submitted by joe smith on 08/24/2016 - 01:47 pm.

        Theo, can you inform me of one business

        that is located in Mpls that couldn’t ship its product if located in Madison, Wisc, due to infrastructure issues. Please be specific. Can you please tell me a company that is located in Mpls that couldn’t find trained employees to produce the same product in Columbus, Ohio. Again please be specific. I have been in business for 4 plus decades and every place I have been there has been railroads, Highways, workers willing to bust their butts for a pay check. I missed out on the- only in the state of Minnesota can you transport your product and only in Minnesota can you get trained workers. If that was truly the case the state of Minnesota wouldn’t be struggling to get good high paying middle class jobs!

        Theo, I am looking forward to your answer to back up your claim of empirical evidence versus dogma.

        • Submitted by Matt Bowers on 08/24/2016 - 03:37 pm.

          No one ever said that Minnesota is the only state with infrastructure and trained workers.

          You used taxes and regulations as two elements that a business person would evaluate in locating their business. What others have argued is that there are a host of issues that go into the decision to open a business, including regulations and taxes.

          You have been in business for over 40 years–do you make all of your decisions about your business based only on taxes and regulations?

  13. Submitted by Frank Phelan on 08/24/2016 - 07:19 am.

    As I’ve Asked Before

    Where does the CAE get it funding? isn’t that a relevant question?

  14. Submitted by Matthew Johnson on 08/24/2016 - 08:31 am.

    This whole blue team – red team thing is getting us nowhere.

    So if your intention in reading MinnPost is to find third party rationale to keep cheering for the blue team, read no further. Based on this embarrassing piece, I’m sure we can count on our own, local, Professor Johnston to continue to cheerlead the narrative by cherry picking facts, misrepresenting the whole of an issue to bolster his point, citing dubious sources and representing fifth grade principals of division (the same numerator relative to a smaller denominator will give you a higher rate of change) as insightful economic analyses to keep assuring us that he is right, the right is wrong, and everything is awesome.

    However, if you have the bandwidth to think beyond the binary blue and red and a desire to broaden your outlook, I would encourage you to read the CAE report. Because while our professor would apparently like you to think that this report is the product of a group of Republican activists who sat around and made stuff up, that is simply not true.

    The author is Joe Kennedy, Minnesota JD, Georgetown Econ PhD, former Chief Economist for the Department of Commerce, former officer at the Pew Charitable Trust and long time advisor to Congress and the manufacturing industry. And as Dr. Kennedy points out, and Dr. Johnston misrepresents, the data is all very public and the conclusions not new. The Brookings Institution, DEED, and the Metropolitan Council “all report similar findings, not surprisingly since each analysis relies on the same data sources”. The Minnesota demographer’s office shared the risks of our migration trends last year.

    This report is comprehensive, and quite interesting. You don’t need to agree with the policy conclusions, but the facts are the facts. They are presented well. If you bother to read the report you can decide for yourself what they mean for the state.

    I am discouraged for our future when I see people blindly chiming in with partisan statements and agreement about something that they haven’t bothered themselves to read. This whole blue team – red team thing is getting us nowhere. Professor Johnston does his readers and the citizens of Minnesota a disservice by his blatant partisanship and by so egregiously misrepresenting what is here.

    • Submitted by Jeremy Bergerson on 08/24/2016 - 12:28 pm.

      Best comment yet

      This is easily the best comment I’ve yet seen for this article. Grammatically accurate and dispassionate, this is the kind of non-echo chamber response that is sorely lacking in our public debate. While the analysis of these data is beyond my ken, I cannot agree enough that this whole blue-red divide is getting us nowhere … despite the fact that blue used to represent Republican and red Democrat. How short our memories and deep our tribalism!

      • Submitted by Henk Tobias on 08/25/2016 - 01:43 pm.

        How do you define dispassionate?

        Here’s what Miriam Webster says: not influenced by strong feeling; especially : not affected by personal or emotional involvement

        Here’s what you’re calling dispasionate:

        “Based on this embarrassing piece, I’m sure we can count on our own, local, Professor Johnston to continue to cheerlead the narrative by cherry picking facts, misrepresenting the whole of an issue to bolster his point, citing dubious sources and representing fifth grade principals of division (the same numerator relative to a smaller denominator will give you a higher rate of change) as insightful economic analyses to keep assuring us that he is right, the right is wrong, and everything is awesome.”

        Do you see the problem?

        • Submitted by Jeremy Bergerson on 08/26/2016 - 08:31 am.

          Random House

          When a proper Random House dictionary isn’t available, sure, Merriam-Webster will do.

          I stand corrected. What is important here, however, is that the commenter stressed not a political agenda (despite his asperity directed at lefties), but rather a desire to draw conclusions from facts. The value of this cannot be understated, for, despite MinnPost’s comments being hands-down the best of any on the internet, there is a left-of-center bent to its readership, and thoughtful responses such as Mr Johnson’s are of great value in popping the echo chamber bubble. The degree to which we self-select nowadays in respect of our political views is dangerously incestuous.

          You are right: Mr Johnson’s comment was not dispassionate in its wording. However, it does require a dispassionate mindset to analyze data accurately and draw conclusions from them. I saw little promotion of that in the rest of the comments. Instead, I saw a lot of finger-pointing at right-wingers. Hence my praise of a position that encouraged analysis, not mutual agreement about othering different viewpoints.

    • Submitted by John Appelen on 08/24/2016 - 08:30 pm.


      I am with you, Dr Johnston seems to be playing games here. It seems he is guilty of formulating an opinion against the CAE’s paper, and then setting out to prove his opinion.

      Just recently the Left was bragging about how great the Dayton/ DFL changes (ie tax increases) were for MN, when in reality they had not been in effect long enough to tell. Now that they have been in effect for 2+ years we are probably beginning to see the consequences. (for better or worse)

      The other pet peeve I have is anyone trying to compare between States without discussing the difference in cost of living. (ie taxes, housing, etc) Trying to compare SD and MN without this data is pointless.

      By the way, here is the link to the actual paper. My recommendation is that folks should push back against their personal bias and read it. That is my plan.

      • Submitted by Edward Blaise on 08/25/2016 - 10:39 am.

        Well, not exactly…

        From the CAE’s conclusion:

        “Minnesota has historically been home to a diverse and competitive economy”


        “But if Minnesotans want a better future, they cannot continue the same policies that have led to an erosion of the state’s historic competitiveness.”

        I did a little Google search of historic corporate tax rates and found a study of 1939 to 1950 tax burdens, state by state.

        And guess what? Drum roll please….

        1939 Tied for third on highest corporate tax rate.
        1950 Again tied for third on highest corporate tax rate.

        Sorry CAE, we can agree on your first conclusion:

        “Minnesota has historically been home to a diverse and competitive economy”

        But, on your second:

        “But if Minnesotans want a better future, they cannot continue the same policies that have led to an erosion of the state’s historic competitiveness.”

        We have been doing the same thing for over 80 years. Are you suggesting we go back to the robber barons of the 1890s to really get things going forward the way you envision?

        Conservatives continue to live in the fantasy land that a state can have top ten livability results and have bottom ten tax burdens. One would think our right leaning, ardent capitalist friends, more than anyone else, would understand:

        You get what you pay for.

        Want a bigger house: pay more.
        Want a faster car: pay more.
        Want a more luxurious vacation: pay more

        Want better schools: pay more.
        Want better roads and transportation: pay more.
        Want better parks and civic amenities: pay more.

        And that is what we have done in this state and that is why it works.

        And to the CAE: Don’t let the door hit you in the butt on your way out to Mississippi…

        • Submitted by John Appelen on 08/25/2016 - 08:46 pm.


          I have no problem paying a little more for good parks, roads, transportation, parks, civic amenities, etc. However the idea that one MUST PAY MORE for these sounds like a good explanation of why our local and state governments are so expensive. In my world I like to press the service and product providers to provide more for the same price.

          And I don’t know if you have been to NC, but they have a lot of really nice stuff.

          Now regarding “you get more of what you pay for”. We have a very generous welfare and healthcare system, does this mean that we draw more people who are happy living off the taxes paid by the efforts of others?

          And this is paid for by higher taxes on people with money / high incomes. Does this mean we are encouraging them to find a less expensive place to call home?

          In closing, I did skim the whole document. I do agree that they are a bit inconsistent, however there were also great points in there.

          • Submitted by Matt Haas on 08/26/2016 - 08:57 am.

            Such as?

            Haven’t been to NC, but have been elsewhere in the “red” south. Outside of metro areas, I’d say it’s barely above rural Mexico, i.e. less than first world conditions. I wouldn’t visit, much less live there. Say what you will about”high tax” states, but the facts are that even their worst areas are far more livable than the worst areas of the “booming” (conservatives definition, not mine) South.

      • Submitted by RB Holbrook on 08/25/2016 - 11:22 am.

        “Push Back Against Their Personal Bias”

        All well and good, but did the author (a very smart fellow with undoubtedly impressive credentials) push back against his personal biases when he wrote it? At the outset, we are told that the CAE’s “daily pursuit is a free and thriving Minnesota whose cultural and intellectual center of gravity is grounded in free enterprise, limited government, individual freedom, and other time-tested American virtues.”

        Put another way, would Dr. Kennedy or the CAE have issued any report if a full and fair review of the available data had led them to different conclusions?

        • Submitted by John Appelen on 08/26/2016 - 08:17 am.


          Please remember that I encourage reading both sides as often as possible.

          Elsewhere I just linked to various auto manufacturing plants across the country that were not built in MN. They were built in SC, KY, OH, while MN lost it’s Ford Truck plant. These plants are huge and employee 8,000+ people with pretty good paying jobs. (plus all the suppliers that locate near them) And many of them do not require a high level of education.

          We have a high minority unemployment rate and many complain that our less educated citizens have too low of an income. So what is MN going to do to draw more of those big higher paying employers here?

          Continually raising taxes and strengthening unions certainly is not doing it.

          • Submitted by Sean Olsen on 08/26/2016 - 09:55 am.


            Open up the checkbook. The auto plants you note above are getting massive subsidies from the states that host them.

            • Submitted by John Appelen on 08/26/2016 - 07:26 pm.

              Technically they are receiving NOTHING from the States. They just aren’t paying anything except salaries. (which are taxed) Please remember that if they are not in the State… The State gets NOTHING either, plus the State’s citizens and government don’t have the jobs, incomes, supporting jobs, etc.

              • Submitted by Anthony Walsh on 08/29/2016 - 02:05 pm.

                Technically they are getting a FREE RIDE from the States.

                They are using its infrastructure and its education system and probably more with out having to contribute to any of it.

                They are MOOCHING. They are welfare recipients.

                • Submitted by John Appelen on 08/29/2016 - 03:27 pm.

                  Point Taken

                  I understand your point, and yet I disagree that it is welfare.

                  To me it using tax policy to encourage someone or some business to do something they maybe wouldn’t normally do.

                  In the case of welfare, the recipient is given money, food, healthcare, heating assistance, etc for doing pretty much nothing. (ie except following some rules) And there is often minimal or no payback for the State and the other citizens.

                  In the case of the businesses, they usually need to invest a great deal of money into facilities, hire an agreed to number of employees, pay a lot in salaries, attract businesses to support them, support existing businesses, etc. And it is usually only for a fixed period of time.

                  I have yet to see a government just give a business money for nothing.

          • Submitted by RB Holbrook on 08/26/2016 - 10:05 am.

            High Paying Jobs

            My understanding was that the Ford plant closed because Ford was discontinuing the smaller trucks produced there, and also wanted to consolidate truck manufacturing operations. The St. Paul plant did not lend itself to expansion.

            SC, KY, and OH rank well below Minnesota in average income. In fact, they all rank below the national median.

            One complaint about unions is that they demand high wages for their members. So . . . we attract high paying jobs by discouraging bargaining for higher wages? Pardon me for thinking that makes no sense.

            High paying manufacturing jobs are disappearing all over the country. Instead of wringing our hands about how to bring back the Minneapolis Moline plant, perhaps we need to come up with a different strategy. Perhaps we need to invest more money in workforce training, including training for older workers, or people who haven’t made approved life choices. What am I saying? That will cost money!

            • Submitted by John Appelen on 08/29/2016 - 04:17 pm.


              High paying is relative. I think a lot of people living in Minneapolis and St Paul would be ecstatic if those cities could attract a company that wants to hire 8,000 employees and pays $15 /hr to $30 /hr for people with a HS degree… (like BMW, Ford and Honda do in those supposedly “low” income states)

              Definitely would be much better than the stadiums we bought… 🙂

  15. Submitted by Edward Blaise on 08/24/2016 - 10:18 am.

    The CAE and Powerline

    It is hard to accept the CAE as this thoughtful, reflective think tank with a conservative agenda when its’ leadership (John Hinderaker) spends half of its time on thoughtful, reflective, conservative principles and the other half throwing bombs at everything they disagree with through a sophomoric web site that is the intellectual successor to “Minnesota Democrats Exposed”. No parking ticket, marital difficulty or other personal failing of any perceived member of the left escapes their notice. Sorry Matthew Johnson; but, if it walks like a duck and quacks like a duck, it’s a duck.

  16. Submitted by Richard Bonde on 08/24/2016 - 10:18 am.

    Thank you Dr. Johnston. You clarify whatever subject you address.

  17. Submitted by Asesh Datta on 12/09/2016 - 02:29 am.

    Economics and Politics Are Inseperable

    From a Indian perspective, such debates are always interesting and then ends up in Blue Red controversies.
    Even some of the comments would like to be re-framed under 150 days later scenario.
    Economic indicators are measure of performance, but interpretation are purely judgemental. Picture is always dark and bright and see the trend. Predicting ‘Tipping Point’ is important and initiate developmental activities.
    Either case if things are bright now and then strive for brighter prospects (however marginal) and if any indicator is showing darker trend then reverse the trend (Opposite of Tipping Point or Bouncing Point).
    Political justifications are always under economical backdrop for the community they represent, then regional, national, continental and global perspectives.
    Every family wants to grow and state of Minnesota is no different. Identify the families who have not grown over last 5 years. Listen to their concerns and act proactively. They definitely will not vote to any color (Red and Blue) and remain indifferent.
    That is the concern needs addressing. Thanks and regards

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