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In latest jobs numbers, a vindication for Minnesota’s policy choices

Minnesota employment
REUTERS/Aaron Josefczyk
Employment in Minnesota grew by 1.3% in 2016, with South Dakota and Wisconsin next at 0.5% and Iowa at 0.1%.

On Wednesday of last week, the Bureau of Labor Statistics released the latest data on employment and wages by state from December 2015 to December 2016. You’re probably not as excited about this as I am, but you should be: it provides insight into the effectiveness of various public policy choices.

Here are the data, in map form:

Total employment in Minnesota grew faster than in neighboring states.

Note: In all of the maps, the bluer the better, while orange represents decline. Source for all maps: Bureau of Labor Statistics.

Employment in Minnesota grew by 1.3% in 2016, with South Dakota and Wisconsin next at 0.5% and Iowa at 0.1%. North Dakota’s employment shrank by 3.2% due to the bust in oil prices.

No, this growth in employment is not due to rapidly growing government.

Government employment grew more slowly in Minnesota than in surrounding states.  North Dakota led with 1.6% growth in government employment, followed by South Dakota (1.1%), Wisconsin (1.0%), Iowa (0.8%) and in last place Minnesota (0.3%).

Private sector employment grew faster in Minnesota than in its neighbors, but was only at the national average. 

U.S. private employment grew by 1.2% in 2016. Minnesota did slightly better with 1.3% growth. Wisconsin and South Dakota were next with 0.5% growth, with Iowa showing no change in private employment and North Dakota contracting by 4.2%.

Wages fell in 2016 across the region and the nation.

Unfortunately, even though employment grew during 2016 the average weekly wage fell in the US by 1.5%.  Minnesota did better than the national average, with wages only falling by 0.8%. Iowa’s workers saw wages decline 1.1%, Wisconsin’s 1.3%, and South Dakota’s by 1.4%.  North Dakota got hammered, with the average weekly wage falling 5.2%.

These are nominal wages, that is, not adjusted for inflation. Given that prices rose between 1.5 and 2 percent in 2016, you can subtract that amount and get the truly bad news: average weekly wages fell by about 2.5 to 3 percent in Minnesota during 2016, but that was better than its neighbors.

The bottom line is that Minnesota’s labor market is performing above average, but not by much. However, our performance tops the five-state region.

Some policy takeaways:

  • North Dakota rode the oil boom and now is riding out the bust.
  • South Dakota kept taxes and regulation at a minimum but still does not do as well as Minnesota.
  • Wisconsin enacted policies busting unions through “right to work” laws, cutting corporate taxes, weakening environmental and safety regulations, slashing government spending, and then watched as employment grew more slowly and wages shrank more than in Minnesota.
  • Iowa tried to be Wisconsin-lite and fared no better.

During the recent legislative session, we often heard cries that Minnesota’s government expanded rapidly during the past biennium and this held back economic activity. Neither of these assertions holds true. We are doing better than our neighbors, which suggests that there are no magic formulas to jumpstart employment growth. Rather, the slow, patient work of improving our education systems, investing wisely in infrastructure, and promoting a healthy workforce will keep Minnesota in the lead.

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Comments (5)

Well...

"Wisconsin enacted policies busting unions through “right to work” laws, cutting corporate taxes, weakening environmental and safety regulations, slashing government spending, and then watched as employment grew more slowly and wages shrank more than in Minnesota."

I am sure our friends on the right will just call that fake news and if that strategy falls through they will offer an alternative fact on how great WI is doing in comparison to MN.

Wisconsin like many repub states = failure

Wisconsin lost manufacturing jobs in 2016, trailing the national rate for job creation since 2011. Just another inept repub governor...slow growth, deficits and job losses while pushing for tax cuts for their wealthy benefactors. It won't be long before they're in the same economic chaos as Kansas, one of the worst.
Interesting that Wisconsin USED to have a good educational system that is now failing with many teachers dropping out.
Sad that this is what repub policies are...ineptness.

And When Those Teachers All Leave

Once the teachers who have the skills to command a middle class wage are gone, the void will be filled by those whose skills only command warehouse job level wages. It is important to remember that this is not a bug but a feature of the program. When public schools no longer function, why we'll just have to unleash for profit charter schools.

Setting public schools up to fail is the plan.

Slow and patient

“…the slow, patient work of improving our education systems, investing wisely in infrastructure, and promoting a healthy workforce will keep Minnesota in the lead.” This message is largely anaethema to the state's Republican policymakers, though the new GOP chair, Ms. Carnahan, might be more receptive than many legislative Republicans.

Inflation

Whenever I read statistics on employment, wages and inflation I always have to ask myself where are they getting this inflation of 1.5 - 2 per cent price increases. Every bill I have gotten in the last 18 months has gone up well over these amounts, specifically rent, electricity, water and sewer, auto insurance etc.. The only thing that has gone down is gas, automobile not utility gas. I just don't believe the government statistics.