The economy of our state

Chad Kulas

Attachments

20240311-115344-Ron Wirtz Fed Reserve Presentation.pdf

At a recent Midway Chamber meeting, we hosted the Minnesota Department of Employment and Economic Development (DEED) commissioner, Matt Varilek. He started last June when former Commissioner Steve Grove left to become publisher/CEO of the Star Tribune.
Varilek is very comfortable in his role acting as the bearer of good news on our economy in Minnesota. While some are eager to criticize Minnesota or our economy, here are some important numbers to remember.
Minnesota has had six straight months of job growth and we have never had as many jobs than we do now (3,008,000). Recently, CNBC ranked Minnesota as the fifth best state for business, and we are first in the nation for business survival rates after five years at 57.6%. A map shows we have a significant increase in new business applications (especially compared to most states), and are opening more businesses than we are closing.
While taxes are everyone’s favorite talking point against Minnesota, we rank 13th lowest among states in business taxes as a percent of the GDP (best in the Midwest). A recent study by the Institute on Taxation and Economic Policy also reported we are the best state for a metric called tax fairness, meaning low-income households pay less of their income in taxes compared to high-income households.
Minnesotans love their lists and rankings, especially when we look good. But DEED knows not to rest easy on the successes we’ve had as there is always a need to improve. Two areas of real importance are broadband access and child care.
Access to the internet has been compared to basic needs like electricity and indoor plumbing. And for people without easily accessible internet, they could fall behind others in their careers, job searches and efficiencies in their personal lives. While US News and World Report ranks Minnesota the #1 state for internet access in the country, we do not want to fall behind. The state legislature passed $100 million in broadband infrastructure support and Minnesota received $652 million from the federal government to expand broadband services.
Childcare can be an enormous barrier for people looking for work, and DEED is finding ways to help. In the FY 24-25 biennium, DEED has $15 million for childcare and $3 million in FY 26-27. This funding will help create childcare slots through grants to communities for new or expanding childcare businesses, facility improvements, worker training, attraction, retention and licensing, and other strategies to reduce the childcare shortage.
Minnesota is outperforming the rest of the United State, but that doesn’t mean the country as a whole is doing poorly. In fact, a report by Axios states that the U.S. GDP grew 2.5% in 2023, making it the best G7 country for growth for the year. And early reports are the U.S. will head the list once more in 2024.
There’s always going to be work to do and ways we can improve. Despite the rhetoric, it is important to remember data and the strategies implemented to make our communities better.