Minnesota Ranks No. 3 Among Best States
Minnesota’s strong showing comes form a healthy population and economy.
By Ricardo Lopez | Contributor
March 2, 2017, at 12:01 a.m.
MINNEAPOLIS – Minnesota employers and recruiters know it’s difficult to convince people to move for a job to the Land of 10,000 Lakes, but once here, many end up staying.
It’s no secret why.
Good schools, a relatively low cost of living and high median household income offer native residents and transplants alike ample opportunity for work and economic advancement in Minnesota, ranking the state second for opportunity.
“We have a very advantageous balance here,” says Steve Hine, labor economist for the state Department of Employment and Economic Development. Because of Minnesota’s place in the upper Midwest, it “provides some strength in terms of cost of living and affordability, low poverty and high education,” Hine says.
Home to nearly 60 percent of the state’s population and most of the state’s 17 Fortune 500 companies, the Twin Cities metropolitan area of Minneapolis and St. Paul powers Minnesota’s economic engine. The blistering pace of construction in the Twin Cities in recent years is one sign of a state economy firing on almost all cylinders.
Major construction of multi-unit housing is not confined to the Twin Cities, where the $1.1-billion U.S. Bank Stadium opened in summer 2016, spurring millions in private-sector investment around the new Minnesota Vikings stadium. Regional hubs such as Rochester, about 90 miles southwest of Minneapolis and home to the vaunted Mayo Clinic, also are experiencing strong growth.
Another metric: the state’s jobless rate has remained mostly below 4 percent for much of the past two years, well below the national average. Nationally, states’ labor forces are shrinking because of the nascent wave of baby boomer retirements, but in Minnesota, the share of people working remains among the highest in the country.State employment officials recently reported more than 90,000 job openings, creating a job seeker’s market and lifting wages modestly.
Like other top states, Minnesota ranked high for rates of educational attainment, the result of major educational funding reforms during the 1970s led by Gov. Rudy Perpich. For that reason, home-grown companies such as 3M, Ecolab and General Mills have been able to expand into national and global corporate giants. These firms rely on a steady stream well-educated workers. Nearly half of the state’s residents hold a two-year college diploma or higher, ranking third among all states.
The state’s broad-based economy, which also includes agriculture, largely mirrors the national economy. Over a recent three-year period, the state’s gross domestic product – the value of goods and services produced – grew by 2.5 percent, ranking it sixth among all states. Contributing to the state’s economic prosperity is a vibrant research community at the University of Minnesota and the Mayo Clinic. Major companies also spend heavily on research and development of new products and technologies, contributing to a No. 5 ranking for the number of patents issued.
The economic good fortune enjoyed by many in the state, however, is not widespread. Longstanding racial disparities in education, the labor force and housing are among the worst in the country. Minnesota, for instance, ranked 43rd for its racial gap in unemployment rates between white and nonwhite residents. It ranked 44th for its racial gap in wealth.
Policymakers for years have been vexed about how to best promote opportunity for growing minority populations. Major business groups, philanthropists and state political leaders are already sounding the alarm on addressing the racial disparities which, left unchanged, could imperil the state’s future economic growth. They’re seeking to improve diversity in both the public and private sector by promoting opportunity for Minnesotans of color and recruiting talented workers from outside the state.
Once here, however, some professionals of color report leaving – not necessarily because of the harsh Minnesota winters – but rather because of a lack of diversity, spurring efforts by a regional nonprofit, Greater MSP, to bolster retention efforts.
“Our economy depends on this highly educated workforce, and if we are not able to maintain that as we become more and more diverse, it certainly could be a threat to this position,” says State Demographer Susan Brower.
As a demographer, Brower has studied the state’s rapidly changing population trends and travels the state to present her research on demographic trends and how they affect the state’s economy and workforce.
Brower says the state’s future growth will face challenges because of the looming retirement wave of baby boomers, shrinking the workforce. Without immigration or migration to Minnesota from other states, the labor force is expected to shrink. Most of the state’s natural population growth will come from its minority residents who for recent decades lagged behind white residents in education and wealth.
A tax attorney for nearly three decades, president of a manufacturing company and now the the state’s chief financial officer, Myron Frans says the state long has been attractive to companies for its strong infrastructure, another area in which Minnesota ranked highly.
State political leaders have pushed strongly for a major transportation funding package the past two years, warning that without improvements to the state’s roads and bridges future commerce will be constrained by deteriorating infrastructure.
In the political debate over transportation funding, “What we forget in Minnesota,” Frans says, is that “things work here.” Boasting of a relatively low commute time for workers, 23 minutes on average, robust public transit coverage and higher-than-average broadband access, the state ranked fifth overall for its infrastructure.
Minnesota received high scores for the health of its residents. The state already had a high rate of adults with health insurance, and the rollout of the Affordable Care Act expanded that, says Emily Johnson Piper, state commissioner for the Department of Human Services. Low obesity rates and and a focus on preventative care for children also contribute to good public health.
“These things kind of hang together,” Brower says. “So if you have a workforce and a population that’s well educated, that’s making a decent living that’s healthy, all of those things mutually reinforce each other. You would expect in a state with this level of health and well-being to see those strengths permeate across the different measures.”