Mediocre Performance Threatens the State’s Future

Minnesota’s economic growth is now just average while productivity continues to be below average. Minnesota’s growth in gross domestic product (GDP), the most basic measure of economic success, historically grew a touch faster than the U.S. However, from 2000 to the present, Minnesota’s GDP growth settled to just average with the U.S. Looking at GDP per worker, the average Minnesota worker in private industry, in both goods producing and service producing sectors, is less productive than the average American worker.

Most states have done better than Minnesota in both income growth and job growth from 2000 to the present. Minnesota ranks 30th in per capita income growth, 34th in growth in disposable income, and 28th in rate of job creation.

The Twin Cities rank average or below average among major urban areas in economic growth and job creation. The Twin Cities area ranks ninth out of the largest 15 metropolitan areas in growth in economic output since 2001, and eighth out of 15 in job creation.

Areas where Minnesota looks strong are driven primarily by Minnesotans’ work ethic rather than by a dynamic economy. Minnesotans have higher than average per capita incomes. This is largely because, compared with other states, more Minnesotans are in the labor force. Similarly, Minnesota has higher than average household incomes, mostly because the state has more two-earner households.

Click here to read the full publication →