Newspaper article

GOP Candidates Say Minnesota Should Be More like Kansas and Wisconsin. the Numbers Say Otherwise

Newspaper article

GOP Candidates Say Minnesota Should Be More like Kansas and Wisconsin. the Numbers Say Otherwise

Article excerpt

The state of the economy is always an election issue -- and this year's contests are no exception.

The governor's race presents a clear choice between Gov. Mark Dayton's economic policies and those advocated by his Republican challengers. In particular, the Republican candidates have all emphasized that they will follow economic policies similar to those of Sam Brownback in Kansas and Scott Walker in Wisconsin. This includes tax cuts, reduced business regulation, laws to limit union power, and resistance to the Affordable Care Act. (Menzie Chinn of the University of Wisconsin presents a concise summary of these policies here.)

Scott Honour states the case clearly in his economic plan. He sets out five goals for Minnesota's economic policy and then says to meet these goals he will enact a host of polices ranging from tax reform to expanded mining.

All of this begs a question: How is Minnesota doing relative to the goals that Honour sets out?

Let's go to the data:

Goal 1: Lead our region in economic growth and job creation

This one is going to be tough to meet given North Dakota's oil boom. For instance, private employment in North Dakota grew 32.1 percent since 2010, the most recent low-point for private sector job growth. But, as the Federal Reserve Bank of Minneapolis recently reported, this breakneck growth is slowing down.

Minnesota leads the rest of the upper Midwest in job creation with 8.8 percent growth since 2010. Iowa gained jobs at a 6.4 percent rate while South Dakota and Wisconsin tied at 6.3 percent growth. Kansas saw 6.6 percent private job growth over the same period.

Goal 2: Higher wages and take home pay

A good way to look at this is to scan the numbers on average income per person after taxes. The chart below shows these data for 1990 to the present, with each state's average measured relative to the national average:

Per capita disposable personal income relative to US average

Source: Bureau of Economic Analysis

Minnesota was at the national average in 1990, with Kansas and Wisconsin at about 93-95 percent of the average. By 2013, however, Minnesotans earned about 106 percent of the national average income after taxes, while Kansas bumped around the national average and Wisconsin remained stuck below, at around 97 percent.

Goal 3: Increased private sector employment

The figure below shows private employment as a percent of total employment since 1990:

Private employment as percent of total employment

Source: FRED

Wisconsin leads in this category, but has been pretty flat since 1990. Minnesota, on the other hand, has experienced rising private sector employment while Kansas has fluctuated around 80 percent.

Focusing on the period since the last recession began, in December 2007, through June 2014, private sector employment rose 0.3 percent in Minnesota, while in Kansas it fell 0. …

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