For the past six years, the standard response among Minnesota “progressives” when conservatives point to the success of Scott Walker (Milwaukee notwithstanding) is “Oh, yeah? Well, Minnesota’s doing better!”
And there has been a grain of truth to that; while much of Wisconsin’s economy is tied to dying rust-belt manufacturing centered in the southeastern part of the state, largely concentrated in cities that have been addled by half a century of “progressive” rule, Minnesota’s is heavily based on industries that are heavily subsizied (healthcare), beneficiaries of government stimuli (financial services), or just plain hot (medical devices).
But you can only subsiidize a boom for so long.
John Hinderaker – my former NARN colleague and new president of the Center of the American Experiment – has the story; the Minnesota economy isn’t nearly as solid as the DFL’s noise machine would have you believe:
This is the conclusion of a groundbreaking paper by Joseph Kennedy, former chief economist for the U.S. Department of Commerce, which Center of the American Experiment is releasing on Monday. Kennedy’s research indicates that over the last 15 years, Minnesota has been average with regard to economic growth; below average with respect to private-sector productivity; 30th among the states in per-capita income growth, and 28th in the rate of job creation.
Similarly, the Twin Cities metropolitan area ranks average or below average among the nation’s 15 major metropolitan areas in rates of economic growth and job creation.
Why does this matter? Because it means live in Minnesota is going to start to suck even worse than a La Nina winter:
But that isn’t the worst news. Kennedy also finds that, with respect to an alarming number of leading indicators, Minnesota’s current performance points toward below-average prosperity in the future.
Minnesota is experiencing a growing concentration of employment in industries and occupations that produce less economic output per job. Consistent with that trend, there are fewer Minnesotans working in high-tech jobs today than there were 15 years ago, according to the Bureau of Labor Statistics.
Minnesota’s economy is increasingly wrapped around financial services and health insurance – industries with fabulously wealthy executive classes, minimal and utterly non-innovative technical classes, and lots of service workers with stagnant wages.
Minnesota also is suffering from a decline in venture capital, a falling rate of new company formation and a decline in entrepreneurship.
Minnesota – a great place to be the CEO (of a Fortune 1000 corporation – not so much elsewhere).
Read the whole thing. Or tune in on Saturday; Hinderaker is at least tentatively scheduled to appear on the NARN.