Report: Liberal MN’s Economy Outpaces Conservative WI’s

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Minnesota and Wisconsin have a lot in common in terms of geography, size and culture. But over the past seven years, they’ve taken drastically different political paths. A new report by the pro-labor Economic Policy Institute says Minnesota’s economic growth has far outpaced Wisconsin’s.

Report author and EPI senior economic analyst David Cooper says the two states were fairly similar in politics and economics, until the last recession. Since then, Minnesota’s state government has raised taxes on the wealthy to finance investments, raised the minimum wage and accepted the Medicaid expansion.

Cooper describes Wisconsin’s more conservative approach as, “Cutting taxes, weakening labor standards, not accepting the Medicaid expansion, rejecting federal funding for public investment.”

Cooper says it’s possible to look at other states that have adopted similar conservative policies and have experienced similar weak growth, but there aren’t other comparisons like Wisconsin and Minnesota in which historically, the two had been so similar.

Minnesota tops Wisconsin

The report indicates jobs in Minnesota rose 11 percent, but only 7 percent in Wisconsin. Minnesota’s wages rose across the board, while in Wisconsin, they dropped almost 1 percent.

Wisconsin’s unemployment rate is just under 3 percent – lower than Minnesota’s 3.3 percent. But Cooper says that figure doesn’t tell the whole story.

“Because the unemployment rate only describes the share of the workforce that’s actively looking for a job and can’t find one,” says Cooper, adding that labor force participation overall is lower in Wisconsin.

He says the reason for this research is that both states’ governors have now had two terms to enact their slate of very different policies. He believes it will be interesting to see whether the results affect the upcoming elections.

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