Yes, Minnesota Beats Wisconsin
But is its better economic performance due to more liberal policies?
During his first campaign for Wisconsin governor, Scott Walker famously promised he would create 250,000 private sector jobs by the end of his first term in January 2015. As is well known, Wisconsin fell far short of Walker’s goal. In the next four years, Wisconsin only added 140,000 private sector jobs.
Today, more than 3 years late, Wisconsin finally seems poised to hit the 250,000 jobs mark. By comparison, Wisconsin’s neighbor Minnesota, with a slightly smaller population, crossed that line in January of 2017.
Walker’s plan for job growth reflected conventional conservative dogma. It included tax cuts, particularly at the high end, looser environmental regulation, cuts in education funding, and weakening public and private sector labor unions. However, Wisconsin avoided the fiscal crisis experienced by some other conservative-dominated states–such as Kansas, Louisiana, and Oklahoma–which drastically cut taxes in the belief that increased economic activity make up the difference.
Over the same years that Walker has been Wisconsin governor, liberal Democrat Mark Dayton has been governor of next-door Minnesota. This coincidence gives rise to two questions: (1) which of the two states faired better economically, and (2) to what extent can any difference in results be attributed to each state’s policy as opposed to other differences between the two states?
If one accepts Scott Walker’s assumption that job growth is by far the most important measure of effective policy, there is no question that Minnesota has been more successful since 2011. The graph below compares the percentage private sector job growth since the two governors took office.
A recent report by David Cooper of the Economic Policy Institute examines the comparative statistics on the two states. Besides job growth, on almost every measure, including the growth in wages and household income, reducing the wage gap between men and women, reducing poverty, expanding health insurance coverage, and economic growth, Minnesota outperforms Wisconsin. Cooper’s comparisons join previous ones (here, here, and here) but offer much more detail.
Ironically, Minnesota’s better economic performance is tacitly confirmed by Walker’s spokesperson. In a recent article describing Cooper’s study, the Journal Sentinel’s Craig Gilbert quotes the Walker response. Walker administration spokeswoman Amy Hasenberg makes three points:
- That Wisconsin’s latest unemployment rate is lower, at 2.9 percent in March, than Minnesota’s, at 3.2 percent.
- “Wages are up, and more people are working than ever before under Governor Walker’s leadership.”
- “Our business and tax climates have also dramatically improved from where they were in 2010.”
It is telling, I think, that only the first point is a comparative statistic. Before getting to the difference in unemployment rates, let’s look at the other two arguments.
The second point above typifies an argument that Walker commonly makes: comparing today’s numbers to those at the depth of the recession. These statements could be made about almost every state and tell us little about the Wisconsin economy — and offer no rebuttal to the idea that Minnesota has done better.
As to the third point, it is certainly true that with Walker’s ascension, Wisconsin got a boost in various ratings of business and tax climate. But these ratings do not seem to translate into economic performance.
For example, the table below shows Minnesota’s and Wisconsin’s ranks from the 2018 Rich States Poor States report published by the conservative American Legislative Exchange Council (ALEC). The Outlook score reflects ALEC’s agreement with each state’s policies. Clearly it prefers Wisconsin’s policies to Minnesota’s. Yet when it comes to actual performance, the positions of the two states are reversed.
The only actual data point cited by Walker’s spokesperson is the slightly lower unemployment rate. The next graph compares the two states on four measures of unemployment: the official rate (people who are unemployed and actively seeking a job), U-4 and U-5 (which include people who want a job but are not searching actively, and U-6 (which includes part-time workers who want full-time employment. It is striking how little difference there is in the current numbers for the two states.
However, as the next graph of three unemployment indices shows, this convergence is recent. For most of this period, unemployment, however measured, took longer to come down in Wisconsin than in Minnesota. This means that more Wisconsinites than Minnesotans are suffering the after-effects of long-term unemployment. Using Census data, the EPI calculates that in 2017, 22.4 percent of Wisconsin workers who were unemployed had been unemployed for at least 26 weeks, compared to 12.6 percent in Minnesota.
Over the whole period, both states lost more residents to other states than they gained. However, Wisconsin lost about twice as many as Minnesota. This suggests that one possible factor in Wisconsin’s low unemployment level is that some number of the unemployed have decided to leave Wisconsin for greener pastures.
The Economic Policy Institute makes a compelling case that on practically all fronts Wisconsin has underperformed Minnesota over the past seven or eight years. The challenge is to make the next leap—to conclude that the cause is Governor Dayton’s more liberal policies.
To his credit, Cooper acknowledges this limitation: “Precisely analyzing the causal impact of a particular policy requires sophisticated statistical methods … This report does not provide that level of causal analysis.”
Similarly, a skeptic of the view that Wisconsin’s and Minnesota’s differing policies account for their differing success could point to several other differences between the two states. These include the fact that Minnesota’s major university and capital are both located in its largest metropolitan area, Wisconsin’s greater dependence on manufacturing during a period when American manufacturing took a beating, Milwaukee’s proximity to Chicago, and a population in the Twin Cities metropolitan area that’s more than twice as large as Milwaukee’s.
It is also notable that Minnesota’s superior performance started before Governor Dayton’s inauguration in 2011. It continued during his first two years even as a hostile Republican-dominated legislature rejected most of his proposals.
Arguably Walker’s best defense would be to adopt the widespread consensus among economists that government policy has a limited influence on the economy. (See this opinion piece by an economist at the University of Minnesota arguing that Minnesota’s better outcomes mostly reflects the differences between the two states, and that policy differences probably play a minor role.) However, it seems unlikely that Walker would take this advice; he is much more comfortable insisting, despite the evidence, that his policies created jobs in Wisconsin.
Would “sophisticated statistical methods” put to rest the question of the relative role of policy versus that of inherent state difference? Theoretically yes, but only if the political and logistical obstacles to randomly selecting two samples from the Wisconsin and Minnesota populations could be overcome, one of which would be administered using Walker policies; the other using those adopted by Dayton. In other words, such an analysis is unlikely in the foreseeable future.
What conclusions can be made from comparing Wisconsin and Minnesota outcomes? The answer probably depends on where one lands on the question of how much of the difference in outcomes is due to public policy and how much reflects inherent state differences. Consider the two extreme points. If public policy dominates, the conclusion is that the Dayton set of policies lead to better outcomes than the Walker set of policies. Conversely, if the performance gap is due to other differences between the two states, a state can safely choose the policy that leads to a more just society, with no negative impact on the economy. Either choice doesn’t help Walker’s cause.
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32 thoughts on “Data Wonk: Yes, Minnesota Beats Wisconsin”
Damn right Minnesota beats Wisconsin, in every category, hands down! I was forced to move my business there because Career Politician Scott Walker and Wisconsin republicans have created crazy high costs and chaos in healthcare in Wisconsin as well as failing to even expand rural broadband when every other state around us did simply because they hated Obama. Now Wisconsin not only loses businesses, residents and taxes, taxpayers get to pay for Walker’s buffoonery TWICE! So glad to be a proud Minnesotan, not as cool as back home in Washington State where true freedom and prosperity rule, but Minnesota is literally running circles around Career Politician Scott Walker’s regressive, low wage, no benefits, Big Corporate sell out Wisconsin.
Dump Walker 2018
The fact that Governor Walker’s office tries to use the unemployment rate comparison is also silly because that statistic is based on where a person resides and not where he or she works. If a person lives in Wisconsin but works in Minnesota, he or she is part of Wisconsin’s employed counts. If a person lived in Minnesota but lost his/her job in Wisconsin they would be part of Minnesota’s unemployed counts. There are clearly far more people who live in Wisconsin but have jobs in Minnesota than vice versa.
On the other hand, the private sector job statistics included in this article are based on the location of the job and not the employee.
It’s also noteworthy that average weekly wages for Minnesota employers are far higher than for Wisconsin. https://www.bls.gov/news.release/cewqtr.t03.htm
The stat that is really telling is population growth. Minnesota is a respectable 20th while Wisconsin is bringing it up the rear at 39th.
The engine of population growth in Minnesota has been the twin cities where they have made a long series of commonsense decisions to improve quality of place: improving transit in the core of the city so it’s totally not dominated by giant parking lots, investing in their neighborhood main streets, fostering local business culture over trying to lure global companies, continuing to invest in their universities which is bringing students to the state. In MKE, we’ve been force fed a cars-dependent transportation mix (which in turn means our most important places economically are dominated by low value parking lots) and we’ve underinvested in our neighborhoods while giving hand outs to big business. The result is in the twin cities quality of place is rising, while we’re treading water.
All that matters is which state gets an In-N-Out Burger first. That is when you know true success
This is a great article. Based on facts, it says it all. Nothing more to add except, Goodbye to Scotty.
Libs, I don’t think you could be presented with a stronger argument to move yourselves and your families to either Illinois or Minnesota. Not sure what’s keeping you here in this broken, Walker-ruined disaster area of a state. Set a personal goal to be out of Wisconsin by the end of 2018! Take your talents, your cash, and your drugs… teach Scott Walker and us Republicans a lesson!
Said with love, of course. Just want you all to be happy.
@Dumbledore, correct and great point. What’s even crazier is that taxes are actually HIGHER in Walker’s slave wage Wisconsin than in “socialist” Minnesota, so much so that the State of Minnesota actually pays about 10 million annually to its (albeit much smaller percentage) of residents who do work in Wisconsin and pay higher taxes! Obviously given the bleak, deteriorating economy in northern Wisconsin tens of thousands more Wisconsinites work in Minnesota than vice versa but for those that do the state pays to offset the HIGHER taxes in Wisconsin. What does Wisconsin get for these higher taxes? Increased education funding? No. Paved roads? No. Safer streets or neighborhoods? No. Better transportation options? No. More basic civil rights for women, minorities or anyone other than wrinkly old, white republican men. No. Cleaner environment? No. Clean political system and fair elections? No. Nothing but billions more squandered on Corporate Welfare for Chinese companies offering more slave wage, no benefits jobs and cheap election year gimmicks like hundred dollar bill handouts by Walker and republican frauds. The only “people” who pay less taxes in Wisconsin are not even people, they are corporations that the poor working folks of Wisconsin actually have to subsidize because of corrupt, dim-witted Career Politician Scott Walker and republican’s regressive, asinine, backwards, big corporate welfare jand out, pay to play politics.
Dump Walker 2018
Oh yeah, Wisconsin doesn’t get safer streets or neighborhoods but Wisconsin does get to keep paying for its massive prison industrial complex which taxpayers pay out the nose for. This is yet another area where Minnesota long ago reformed and the state pays astronomically less because of these common sense reforms but Walker and republican’s have kept Wisconsin firmly mired in the utterly failed, draconian and often time racist policies of yesteryear.
@DonaldTrumpNeedstoResign, if by “libs” you mean Libertarian, you know truly fiscally conservative, socually.inclusive people unlike Wisconson’s fraudulent lying Big Government Nanny State control freak republicans then ok. Some of us actually have principles and a backbone and some of us have actually never even been residents of Walker’s Wississippi, we have too much dignity to dive into the toilet bowl but we are successful enough to own beautiful properties in any state we like, and with such success comes taxes, and with taxes comes the right to complain about the corrupt government in Wisconsin! So sorry honey, learn to deal with it or pack up and take your rot-gut liquor, your gerrymandering vote stealing, your corrupt Dark Money political system, your opioid epidemic, your environment trashing policies, your low pay, slave wage “jobs”, your scumbag pay to play corruption, your massive Billion dollar DOT debt on top of crumbling roads and your 4.5 Billion in Corporate Welfare for a TAIWAINESE campany, and get the hell out yourself!
Dump Walker 2018
And Minnesota had Prince , who did we have … Steve Miller. (Sad face emoji)
@LenaTaylorNeedsToResign – the reality is that I have left the state already back in January in large part due to the deteriorating conditions caused by this administration. I work in the transportation field and the dis-investment by Governor Walker has caused many transportation professionals – public and private sector – to simply leave and head to places where the industry is at least stable if not growing. So Wisconsin loses my 25+ years of experience, upper middle-class household income, and countless volunteer hours in my small-town community to another state.
I remain interested in Wisconsin’s overall progress but there is little growth potential for anyone in my industry in the state as long as Scott Walker is Governor. Yes, there is still money being spent on transportation but just as with any industry the companies that rely on profit margin will eventually migrate to the states where growth – not decline – is occurring.
IT does not tell it all? MN has much more debt than WI. WI’s public pensions are funded now at a whopping 137%….while MN’s is in the red @ $16.7 Billion. MN current bond debt is $56.7B to WI’s $45B. % debt to GDP MN 16.18% WI 13.91%, debt per citizen MN $10,248, WI $7,794.
Much more to state finance then grapes, it is apples, oranges, & grapes……not just sour grapes.
Did your facts & figures account for MN’s HUGE liabilities gap while WI is one of only 2 states finance over 100%?
Minnesota has a lot of great companies. It just needs more Marxist like in Washington State. Amazon, Starbucks, Boeing, Microsoft, Costco and Nordstram are fighting against the new head tax. If your a big company you are now compelled to pay $275 per employee to the city of Seattle for simply being employed there.
MN does great, by dumping their debt on their grand kids. Right up there with IL & CA now as one of the worse funded states in the Nation! You are now 7th worse funded. Once your state governments account rigging were found out, MN slipped from #32 worse funded to #7.
Put down the kool-aid Jim Jones, Minnesota actually has paved roads unlike Wisconsin, rural broadband internet (wow what a concept in 2018) world class affordable healthcare for all, great paying jobs and fully funded schools, unlike Career Politician Scott Walker’s backards ass Wississippi. That’s the point.
Dump Walker 2018
Dump ALL republicans in November!
@NaziTroll, now wildly successful, uber-capitalistic, homegrown, amazingly innovative companies such as Microsoft, Boeing, Amazon that have truly revolutionized their industries and the entire world in the process are derided by idiot republicans like yourself as “Marxist”. You simply cannot make this nonsense up. You are clearly here as a paid Russian Troll to disrupt forums. Washington State consistently has the BEST, let me repeat, the BEST economy of all US states year after year…So keep on hating haters, you can’t stop the overwhelming SUCCESS of my beautiful home state. Enjoy your poverty, slave wages and hopelessness in Walker’s trailer trash Wisconsin. Let me guess, Microsoft is “Marxist” because it had minted 1,000 ‘s of multi-millionaires but Trump University is the real innovatove capitalist company…ok? The great part about fools like yourself is, you make all the arguments necessary to prove your own ignorance and idiocy all by yourself. Keep up the great work, you corrupt, lying, broke ass, no talent, wage slave republican ass clowns!
@jim_james53 – if the MN debt situation is so bad, how do you explain that Minnesota has higher credit ratings across all three indexes than Wisconsin according to a recent Pew Trust report (see http://www.pewtrusts.org/~/media/assets/2017/05/statesfiscalhealth_creditratingsreport.pdf)? The same report also cites Minnesota as a model for proper management of a rainy day fund.
JimJames53…The WI public pension fund is in great shape only because the governor has nothing to do with it.
Both Tommie T. & Scotty attempted to get their hands on some of that money, but the courts prevented that from happening.
It is a well managed pension fund and state government best keep their mitts off of it.
jimjames: can you cite a source for your debt figures?
I ask because I found very different numbers. My numbers shows Wisconsin’s debt is higher than Minnesota’s ($3,829 per person vs $3,056 as of 2015).
And those 2015 figures don’t include nearly $1,000 (for each and every Wisconsin resident) in added Foxconn obligations.
Transit Rider : The state debt figures may be on ALEC’s web site under ” Rich States / Poor States ” They usually update similar metrics every year. ( Beware the source of this information)
-Everyone needs to read ” What’s The Matter With Kansas ” to see what was perceived to be going many years ago when the book was written and see how that did not work out at all.
Terry, it does not look good on you when you use the word innovation. Capitalism is all about innovation. It is what gives us a leg up over the rest of the world. Socialism destroys innovation. The left does not believe in research and development unless the government is involved. If Microsoft, Apple and Amazon invest $50 billion in R&D annually that is potential tax money that government cannot immediately grab. The left does not grasp innovation but only political power.
Face the facts, Wisconsin, Minnesota has been better than us economically and socially for many years. Let us learn from them. It makes no sense to Badger the Gophers when the Gophers are rising and the Badgers are sucking hind teat.
@RussianTroll, you obviously don’t grasp reality itself. Why are all the wildly innovative, super successful, thriving, world changing, INNOVATIVE, companies that you hate, all located in thriving progressive blue states (what you call “socialist”) that you alsi hate while failing, conservative red states like Wisconsin have no such companies, no such thriving economies, have no such innovation and keep falling further and futher behind? Why? These wildly innovative, successful companies like Apple, Microsoft, google, Amazon etc which you despise are in reality cut throat capitalists moron and their isn’t a damn thing “socialistic” about them nor the obscene wealth and wealth disparity they have produced in these states. I know, I have lived it. I saw home prices go from 150k to 1 million in the neighborhood I grew up in in Seattle over the last 20 years. This incredible wealth creation has caused the cost of living to skyrocket and created tens of thousands of millionaires, not communists. Meanwhile in Wisconsin people can only dream of such “problems” as the state is instead forced by Career Politician Scott Walker and republicans to hand over 4.5 BILLION in Coporate Welfare for a FOREIGN company for maybe a few low pay, part time, slave wage, manufacturing “jobs” with faux benefits. That is a lot more like your evil “socialism” than anything these truly revolutionary, innovative cut throat AMERICAN capitalist companies have ever done or anything the states they do business in have done. That said, this is America, not Russia or China. So it’s probably wise to stop hating on blue progressive states undeniable success. Afterall, red states are the welfare queens and we in progressive blue states have been subsidizing your dumb failing republican asses for decades.
That’s ok, for progressives understand, even though red state republican moochers don’t that we are all in the same boat. Even though we disagree, I don’t want to see people, even you, fail or struggle anymore in Wisconsin or other failing republican backwaters and thus be left further and further behind than they already are. We’ll carry your weight. That’s what Americans do.
He ain’t heavy, he’s my brother.
Dump Walker 2018
You all gave reasons why WI’s pension funding is so go but nothing on why MN’s is so bad?
so good that is
usdebtclock .org in state’s section for up to date debt source.
Here is where MN lies in pension funding…not good….$51 BILLION short fall! Go to page or decipher the list below.
Funding ratio 2016
Funding ratio 2015
position 2016 ($B)
liability 2016 ($B)
District of Columbia
google “IL businesses moving to WI” & you will get pages of businesses leaving liberal IL for better pastures.
As for insurance, WI is at #9 in the Nation for lowest uninsured, & #1 for a state that did not expand medicaid or open exchanges. WI Badgercare & Forwardcare had WI in great shape before Obama care came along.
Ooops…forgot to post my source…seeing how you all want those?
Thank you for writing another detailed analysis of why Minnesota is absolutely destroying Walker’s Wisconsin in economic activity and earnings potential for everyone. Minnesota is fast becoming the “go to” state career destination for young people.
I am part of a group of retirees who are regularly invited to speak to college juniors and seniors at schools across Walker’s Wisconsin. Our message, “Don’t waste your life on a future in Walker’s Wisconsin”. For the groups of students we talk to, they will earn 2 to 3 times more in career earnings just by fleeing Walker’s Wisconsin. Many are receptive to the notion of leaving this state; often their parents and adult friends have urged them to look elsewhere for their careers as well.
With appropriate citations, we have incorporated several parts of this article into our presentations. Thank you.