Gov. Scott Walker likes to ding Illinois for its fiscal woes. But you don’t hear him saying much about Minnesota.
A new report suggests a reason: Minnesota has been outperforming Wisconsin on nearly every economic front.
The report from the Economic Policy Institute, a left-leaning pro-labor think tank, looked at the economies of the Badger and Gopher states since the 2010 elections of Walker and Minnesota Gov. Mark Dayton, a progressive Democrat. It showed that Minnesota outpaced Wisconsin in jobs, wages, health insurance, poverty and other factors.
“On virtually every metric, workers and families in Minnesota are better off than their counterparts in Wisconsin — and the decisions of state lawmakers have been instrumental in driving many of those differences,” writes David Cooper, the report’s author.
The report is the latest of many comparisons between Wisconsin and Minnesota, most of which have been cringeworthy for Wisconsin’s GOP leadership. The two states provide a “natural experiment,” according to the report, for their “similarities in population, demographics, culture, and industry composition.”
And the 2010 starting point provides a baseline for divergence — before the recession the two states had similar job and wage growth.
But since then, the two states have embarked on vastly different political roads, with significantly different economic outcomes. And those outcomes are likely to become an issue as Walker seeks his third term this year. Dayton is not seeking re-election.
The report doesn’t go far into a causal analysis of the economic outcomes, but it does offer some tie-ins. For instance, Minnesota’s better performance at wage growth coincides with the state’s minimum wage hike fom $7.25 in 2014 to $9.50 in 2017. And Wisconsin’s slower wage growth coincides with anti-union legislation, while research indicates that wages are higher in states with higher union membership.
The report cites vast difference in fiscal policy. While Walker cut taxes on corporations and high earners, Dayton raised taxes on the wealthy. While Walker cut funding for schools and cut back on safety net programs, Dayton expanded educational and infrastructure spending and expanded aid to low-income families. While Walker rejected federal dollars to expand Medicaid under Obamacare, Dayton was one of the first governors to embrace Medicaid expansion.
The report breaks down the results by category.
• Jobs: Walker’s signature campaign promise in his initial run for office was that he would create 250,000 jobs in his first term. Now, nearing the end of his second term, the state is more than 60,000 jobs short of that goal. As of December, Minnesota however was up by 292,000 jobs, and increase of 11 percent since 2010 compared with Wisconsin’s 7.9 percent.
• Wages: Wages in every income level in Minnesota outpaced Wisconsin. Between 2010 and 2017, median Minnesota wages rose 2.4 percent over inflation, compared to a nearly stagnant 0.3 percent in Wisconsin. Minnesota also achieved greater pay equity, with women seeing a median 5.4 percent increase compared with a 0.8 percent increase in Wisconsin. Men in Minnesota saw a 1.6 percent increase, while in Wisconsin the median wage for men actually fell by 0.9 percent.
• Unemployment: Walker recently took credit for the state’s lowest ever unemployment rate at 2.9 percent. That edges out Minnesota’s 3.3 percent. But the report points out that Minnesota reached its pre-recession rate in September of 2013, 15 months earlier than Wisconsin. And unemployed people in Wisconsin were more likely to be unemployed long-term. The report links Wisconsin’s slower march to pre-recession levels to cut-backs to safety net programs, which hampered job-creating consumer demand.
• Poverty: In Minnesota, the poverty rate when down; in Wisconsin, at least by one measure, it appears to have gone up. According to the Census Bureau’s Current Population Survey, since 2010 the number of children in poverty in Minnesota fell by 2.1 percent and stood at 12.5 percent in 2016. In Wisconsin, the numbers rose by 2.9 percent, landing at 16.3. The Census Bureau’s American Community Survey tells a different story. That survey has Wisconsin’s child poverty rate dropping by 3.4 percent, beating out Minnesota’s 2.5 percent decrease. But it still leaves Wisconsin’s child poverty rate at 15.7 percent, well above Minnesota’s 12.7 percent.
• Health insurance: The report calls Walker’s rejection of federal funds to expand Medicaid under Obamacare “one of the most consequential decisions made by his administration.” While the uninsured rate fell in Minnesota by 5.7 percent since 2010, Wisconsin saw a decrease of 7.1 percent. The uninsured rates in Wisconsin and Minnesota are close – 9.8 percent and 9.4 percent respectively – but according to the report the difference accounts for 70,000 Wisconsinites that don’t have insurance.
• Population: Minnesota’s population has grown by 5.9 percent since 2010, while Wisconsin’s has gone up by 1.9 percent. “It’s been often said that people vote with their feet,” the report says, “that is, where people choose to live is an indicator of overall satisfaction with the quality of life, or the perceived potential for an improving quality of life, in a particular area.”