Let’s say, hypothetically, that you live in a city.<\/p>\n
And in that city there are 19 big companies. \u00a0 They have everything that makes up a big enterprise – a CEO, executives, management, stores, labs, manufacturing plants – in your city.<\/p>\n
And then the economy picks up. \u00a0And the 19 big companies hire more people, because a good economy means good sales, which means you gotta develop, build and sell all of those 19 sets of products!<\/p>\n
So what’s the measure of the good economy? \u00a0“19”? \u00a0The number of big companies in your town?<\/p>\n
We’ll come back to that.<\/p>\n
Then, driven by high wages and the need to be competitive, the 19 companies outsource their manufacturing to the Philippines. \u00a0All the people in your town that earned a living from building things for those 19 companies are out of work.<\/p>\n
How’s the economy measure? \u00a0Still a “19?”<\/p>\n
And then the price of R and D rises, and the companies relocated their R&D labs to India and Singapore and Slovenia. \u00a0All your researchers are out of work.<\/p>\n
Is your city still a “19?”<\/p>\n
And then the economy tanks. \u00a0Stores scale back and lay people off, managers get RIFFed, the work force plunges. \u00a0Your town’s unemployment lines are getting longer and longer…<\/p>\n
…but there are still 19 CEOs and corporate boards in town. \u00a0They administer companies that do their R&D and manufacturing elsewhere, and sell to whomever can afford the products through stores that are ever dingier and more understaffed.<\/p>\n
But those 19 CEOs are still in your town. \u00a0So the town’s economy is healthy. \u00a0Right?<\/p>\n
If you said “what, are you kidding?”, you might be a conservative.<\/p>\n
If you didn’t, you probably think this piece by Dave Mindeman at\u00a0<\/a>MnpAct<\/a>\u00a0<\/em>makes perfect sense.<\/p>\n North Dakota and Wisconsin taunt our borders with new signs that say – Our State Is OPEN For Business!<\/p>\n Everybody seems to be overlooking the basics here.<\/p>\n Sure taxes have some effect on business decisions….so do a lot of other things. Let’s look how Minnesota compares.<\/p><\/blockquote>\n Now, let me make sure I reiterate; Mindeman is one of that tiny minority of Twin Cities leftybloggers that don’t need to be under police surveillance.<\/p>\n But when he says “let’s look how Minnesota compares”, what he really means is “let’s cherry-pick some non-sequiturs as absurd as the fictional list of company CEOs in my example above”.<\/p>\n No, literally:<\/p>\n The Facts: Minnesota has 19 Fortune 500 companies. Five are in the top 100. Fourteen in the top 300. United Health ranks the highest at #22. Minnesota ranks 17th in the nation for total GDP. We rank #14 in GDP per capita. Our current unemployment rate is 5.3%. Our high school graduation rate is 91.6% (National average is 85.4%) Persons with at least a Bachelor’s Degree – 31.8% (National Average – 28.2%) Median Housing Value – $201,400 (National Average – $186,200)<\/p><\/blockquote>\n Let’s leave aside for a moment the factors that have nothing to do with\u00a0measuring\u00a0<\/em>economic health (graduation rates are nice, and might – maybe –\u00a0predict\u00a0<\/em>the future, economically. \u00a0Or they might not. \u00a0But if 100% of your town has masters degrees, but they’re all in Women’s Studies so the unemployment rate is 100%, what’s the real (hypothetical) measurement?);<\/p>\n We’ve got 19 Fortune 500 companies. \u00a0Bully.<\/p>\n Now – are those companies creating jobs in Minnesota<\/em>? \u00a0 Is 3M building new plants in Minnesota? \u00a0\u00a0In fact, they literally exported one plant, with hundreds of jobs that used to be on the East Side of Saint Paul, to South Carolina<\/a>. \u00a0And do you remember when they used to do R&D in the Twin Cities? \u00a0Welcome to Austin<\/a>!<\/p>\n Medtronic? \u00a0Aren’t they contracting? \u00a0Well, here they are. \u00a0In Tennessee? \u00a0Not so much<\/a>.<\/p>\n Boston Scientific? \u00a0Well, they’re not expanding anywhere – but it’s here in MN that they’re contracting fastest<\/a>.<\/p>\n When was the last time Ecolab built a plant in Minnesota? \u00a0(Trick question; it was the seventies).<\/p>\n It’s not just big Fortune 500s, of course; Red Wing Shoes is eyeing a move<\/a>. \u00a0Jostens is shifting jobs from Owatonna to Texas<\/a>, the first of what will likely be many moves to lower-tax states. \u00a0We talked about the iron mill that’ll be built in North Dakota rather than the Range<\/a> last week.<\/p>\n But we have 19 headquarters here. \u00a0Right?<\/p>\n Well, doy. \u00a0Of course we do. \u00a0If you’re a Fortune 500 CEO, where would you rather live – around Lake Minnetonka, the Guthrie, the Ordway, with Cathedral Hill restaurants and Galleria shoppping, or up in some holler in Mississippi, sweating through your underwear? It’s a no-brainer. \u00a0And that creates jobs – for management, for MBAs and upper management, sure – and their administrators and\u00a0financial\u00a0planners, and bartenders and caddies and nannies and gardeners, too.<\/p>\n But where are you going to build the plant, and create the jobs, especially for the people who\u00a0aren’t\u00a0<\/em>management? \u00a0Who\u00a0 don’t\u00a0<\/em>have the MBA and the BMW and the career spent networking among the corporate elite and the decades of experience in a field?<\/p>\n You did see the paragraph about all the “Minnesota” companies building plants elsewhere, right?<\/p>\n Mindeman:<\/p>\n So, how do we compare with our neighbors?<\/p>\n Vs. North Dakota: Sure North Dakota has a very low unemployment rate. A big surplus. And most of all an oil boom. But North Dakota doesn’t have a single company in the state on the Fortune 500 list. \u00a0Not one single business.<\/p><\/blockquote>\n Remember that next time you run into an unemployed Ford Plant worker; “hey, you’ve got no job, but at least we’ve got lots of headquarters here!”.<\/p>\n