Minnesota’s Economy Sucks

Here are some clear indications of why.  For the past few months almost every weekly report on new unemployment claims has shown Minnesota, especially on a population rate basis, up near the top.  For the last couple of years almost all our job growth has been in government or government-supported areas like social services and health care.  For the last couple of years all our economic growth has been government spending driven.  Regular census reports show the movement of working age people out of the state, with a disproportionate number being high-income and high-wealth.

Much of this is reflected in a new release from the Bureau of Economic Analysis regarding personal income growth and personal expenditure growth by state.  Minnesota is among the worst in each category.  Consumer spending ultimately drives the economy.  Hard to spend money when your income isn’t going up.  Real personal income in Minnesota declined by six-tenths of a percent from 2022 to 2023.  That’s right, after inflation, the amount of income Minnesotans had available to spend went down.  By contrast real personal income grew by over 3% in places like Florida, Texas, even Louisiana.  So after-inflation personal spending was up a measly 1.1%, which in part means Minnesotans were dipping into savings to pay for things.  Our lack of income growth is one reason the state financial situation outlook is so dire.    (BEA Report)