A new report from the Minnesota Chamber of Commerce has generated some interest among the state’s media this week. Headlines include:
KSTP: MN Chamber of Commerce report says the state’s economy is ‘losing ground’
KEYC: Report: Minnesota’s economy is losing ground
Fox 9: Minnesota’s economy falling behind, report finds
Star Tribune: In face of slowing economy, Minnesota business leaders rally to kickstart growth
WJON: How Minnesota’s Economy Compares To National Growth Trends
Business North: Report says Minnesota’s economy is losing ground
WCCO: Minnesota’s economy lagging behind despite previous growth, report
“The data are clear,” the report notes:
Minnesota’s economy is no longer keeping pace with the nation. Our state has fallen behind on nearly every measure of growth. From 2019 to 2024, Minnesota ranked 33rd in GDP growth, 39th in job growth, 40th in labor force growth and 46th in growth of (real median) household income. Meanwhile, more people are leaving our state than moving here.
None of this will come as news to readers of American Experiment’s work on Minnesota’s economy.
GDP growth
In our 2018 report “The State of Minnesota’s Economy: 2018; Minnesota’s economic growth continues to be unimpressive,” we looked back to 2000 and noted that “While Minnesota’s level of [Gross Domestic Product] GDP per capita compares favorably with the national average, that has not been the case in recent years for its growth rate of GDP.”
This continues to be the case. Repeating the exercise to cover the period from 1998 to 2024, Figure 1 shows the real, inflation adjusted growth of Gross Domestic Product for the United States and Minnesota. Over the eighteen years from 1998 to 2015, both economies experienced more or less the same growth so that, that year, the United States’ economy was 45.5% bigger than it had been in 1998 and Minnesota’s was 45.3% bigger.
Figure 1: Real Gross Domestic Product growth, 1998 = 100
That has changed in recent years, and for the worse. In every single year since 2014, Minnesota’s economy has grown more slowly, in real terms, than that of the United States. The result, as Figure 2 — which is simply an abbreviated version of Figure 1 — shows, is that while the United States’ economy was 27.9% bigger in 2024 than it was in 2014, Minnesota’s was just 17.9% larger. This performance was worse than in 26 out of 50 states, as Figure 3 shows.
Figure 2: Real Gross Domestic Product growth, 2014 = 100
Figure 3: Real Gross Domestic Product growth, 2014 to 2024
“Tomorrow’s news today”
The growth rate of total GDP is simply the sum of the growth rate of the population and the growth rate of per capita GDP. Next week, I’ll look at those with reference to some of our work, and also at the data on the labor force and job growth.
There is nothing wrong with tooting your own horn now and then. As the Chamber report and coverage of it shows, Center of the American Experiment has a long track record of raising before anyone else issues which few in our state want to discuss but cannot, indefinitely, avoid. If you want to know what Minnesotans will be discussing tomorrow, look at what we are discussing today.
