26 Feb Minnesota’s Economic Woes
Since I moved to Minnesota in 1986, we generally have been Number 1 in all things. (Well, not in baseball since 1991 and football since…well, never.) But as to education, literacy, the jobs market, the lakes and other outdoor wonders, and “niceness,” we have been at the top.
No longer.
Now, 35 seasons after our last World Series, we have slipped a place or two each year in many measurable categories. Most of these categories are economic. A famous political wizard, when asked to define the most important issue, once curtly answered, “It’s the economy, Stupid.” Thus, Minnesota’s economy is a proper topic for a political blog.
“Losing Altitude”
The annual economic numbers for 2025 are in. Not good. Minnesota, the home of 17 Fortune 500 company headquarters, nevertheless is unable to keep pace with other states.
My adoptive home now ranks No. 40 in workforce growth rate. In gross domestic product growth per person, we are 38th with one percent growth, a rate that has been slowing over time. In domestic migration – the number of people who moved to Minnesota from another state or vice versa – Minnesota is 41st with 47,900 more people moving to other states than are moving here.
Speakers at an economic seminar I recently attended blamed these numbers on four factors: (1) state tax rates, (2) regulations and mandates, (3) costs of doing business, and (4) a relatively high cost of living. As to the latter point, Minnesota is the 31st most affordable state in which to live, and college tuition here is reported to be the tenth-highest. We are especially losing young people. As a result of all these factors, “We are like an airplane losing altitude,” one of the business leaders reported.
How can politicians fix these problems?
For one thing, I believe our state government should get out of the way of entrepreneurs and innovators. It should be obvious bipartisanly (if that were a word – and if bipartisanship even existed) that we need tax reform, business-permitting reform, population growth, and workforce training. Nationally, we need legal immigration reform to strengthen every state’s workforce.
The State’s Fiscal Problems
Everyone in the world likely knows that Minnesota is numero uno in one category: fraud in state welfare programs. Juxtapose those last three words, and it seems obvious that Minnesota is now a programmed “welfare state.”
Sadly, our problems make national and international news way too often. As the Wall Street Journal noted in a recent editorial, Minnesota has “vast payment schemes” and “doles out” money in many ways. Our state’s website advertises handouts of cash (tax credits on top of federal child credits, prepaid debit cards, and other cash for “emergencies”); housing support (federal money funneled through the state for rent subsidies, plus state support for addicted or homeless people); child care (state payments to providers); and food (some 450,00 Minnesotans get SNAP payments, and Minnesota is one of nine states to provide free breakfast and lunches to all schoolchildren).
And now, new in 2026 is a law requiring employers to provide 20 weeks of paid family and medical leave.
Fraud in these welfare programs is the easiest problem to spot (although our state government didn’t seem to spot it for many years). Put bluntly, these programs are being ripped off, with our tax money disappearing in the process and our elected officials doing nothing to prevent it. Nor has there been any accountability, as I have not heard of anyone being fired by the state agencies involved.
An equally major problem is that these programs are unnecessarily broad and expensive in the first place. The Journal bemoaned the way Minnesota handouts provide “incentive to remain on the dole, in addition to being an invitation to scammers. Minnesota’s problem isn’t immigrants. It’s the welfare state that corrupts them.”
Whenever Minnesota has any surplus money left at the end of a budget year, we give it away or look the other way while fraudsters steal it. Then we raise property taxes and still can’t afford good schools in some areas.
These things are problems.
Written by Quentin R. Wittrock, founder of Principle Based Politics.
Look for his periodic posts, as this blog and the Extremely Non-Extreme podcast explore and promote the ideas of principles and non-extremism in politics.
Principle Based Politics does not endorse or support any particular political candidate or party.
Lynn Nehring
Posted at 12:44h, 26 FebruaryQuentin — This is worth 5 stars. Change is certainly needed. The last straw for me is the new law requiring employers provide 20 weeks of paid family and medical leave.
Raymond J Lynch
Posted at 13:05h, 26 FebruaryYour words ring true. Free breakfast and lunches and 20 weeks of paid leave among the other spending that our government does as over the past few years the states have spent all the free Covid money. I was talking wit a good friend last night about a big change to medical treatment and as I told him it’s all about family helping family. It doesn’t take a village as some would have you think.
Dave Glesne
Posted at 14:20h, 26 FebruaryWell said, Quentin! Well said!
Gary Russell
Posted at 15:10h, 26 FebruaryInteresting – and sad. Such a tremendous state that should not have to endure these problems. The “giveaways” may be a great way to get elected but not to operate. I hope your citizens can see their way to a different future. Less giveways and more courage to live freely – with all the responsibiity that comes with it.
Trudy Johnson
Posted at 16:34h, 26 FebruaryYou’re making my adopted NEBRASKA sound like paradise friend. : )
Quentin
Posted at 16:49h, 26 FebruaryThe saying in Minneapolis and St. Paul always was that “if we lose our pro sports teams, we will be nothing more than a colder Omaha.” I wonder if we would make that trade now?
DKnight
Posted at 21:02h, 26 FebruaryA factual/non-fiction book the length of War And Peace could be written about this topic–and leftists/dems/media/college professors/leftist “historians” et al–will continue to ignore reality. Monopolized government power by one party–any party–leads to corruption and–either failure–or authoritarian enforcement of the ongoing BS. Deep blue government everywhere in the USA is leading to fraud, migration to other states–and societal/political dysfunction. But what do the Dems/leftists keep voting for?–more of it. Many of these insane Dems move to other states–to escape the insanity–and then vote for it again. It’s bonkers. This nonsense has been going on since Prez Johnson and the Great Society. There were some good things in Johnson’s Great Society–voting rights for example were crucial–but it was also the beginning of the welfare state. This misguided approach leads to government dependence and malaise–and much worse. In MN in particular, the GOP is at fault as much as the Dems–as our state republicans ran away from Mpls/St. Paul decades ago–and still won’t go back there to campaign. This is actually a nationwide republican problem–but maybe worse in MN. We need two parties properly competing with good faith–in a civil manner–with influence from both–to prevent crappy overbearing government. We also need to stop electing double dipstick incompetents–like Walz and Frey–and Ellison. Elect competent people that haven’t had their entire careers and their wealth derived from giant government. As I have noted many times on this blog–we all must also dispense with the ridiculous misconception–pushed by the media/Dems for generations–that they care more–are more empathetic–etc. They don’t. They are government freaks who are scared of the proper limited government approach that works. The problem addressed in your post today may be existential. We need to find a way forward–and put a leash on government. If we don’t, more fraud and decay is in the way. The midterms may tell the tale. Orange Man is much less of a threat than the likes of Newsom/Harris and Walz–and the deep blue deconstruction of our society.
Mona Glesne
Posted at 02:23h, 27 FebruaryYou said it very well!!
Gary Hammer
Posted at 14:05h, 27 FebruaryI agree with Lynn—five stars! I’m waiting to see how much of this problem gets fixed this session. Any bets??