In a new paper, EPI Senior Economic Analyst David Cooper analyzes the economic performance of Minnesota and Wisconsin during the tenures of Minnesota Governor Mark Dayton and Wisconsin Governor Scott Walker and finds that, by virtually every metric, Minnesota’s economy has performed far better for working families than Wisconsin’s in the last seven years.
Since taking office in 2010, Governors Dayton and Walker have pursued vastly different state economic policy agendas. Because of the proximity and similarities of the two states, comparing their economic performance provides a compelling case study for assessing which agenda leads to better outcomes for working people.
“Policymakers in Wisconsin have pursued a highly conservative agenda centered on cutting taxes for the rich, shrinking government, and weakening unions,” said Cooper. “In contrast, Minnesota has enacted a slate of progressive priorities like raising the minimum wage, strengthening labor standards, and boosting public investments in infrastructure and education, financed through progressive taxes. The results could not be more clear: workers and families in Minnesota have done far better over the past seven years than their counterparts in Wisconsin.”
Major findings include:
- Job growth since December 2010 has been markedly stronger in Minnesota—an 11.0 percent growth in total nonfarm employment, compared with only 7.9 percent growth in Wisconsin. Minnesota’s job growth was better than Wisconsin’s in the overall private sector (12.5 percent vs. 9.7 percent) and in higher-wage industries, such as construction (38.6 percent vs. 26.0 percent) and education and health care (17.3 percent vs. 11.0 percent).
- From 2010 to 2017, wages grew faster in Minnesota than in Wisconsin at every decile in the wage distribution. Low-wage workers experienced much stronger growth in Minnesota than Wisconsin, with inflation-adjusted wages at the 10th and 20th percentile rising by 8.6 percent and 9.7 percent, respectively, in Minnesota vs. 6.3 percent and 6.4 percent in Wisconsin.
- Median household income in Minnesota grew by 7.2 percent from 2010 to 2016. In Wisconsin, it grew by 5.1 percent over the same period. Median family income exhibited a similar pattern, growing 8.5 percent in Minnesota compared with 6.4 percent in Wisconsin.
- The inflation-adjusted median wage for women rose by 5.4 percent in Minnesota from 2010 to 2017, compared to only 0.8 percent in Wisconsin. Men’s median wage rose by 1.6 percent in Minnesota, while the median wage for men in Wisconsin actually fell by 0.9 percent.
- A major boost to Minnesota’s economy was accepting a $1.2 billion grant from the federal government to set up a health care exchange and expand Medicaid under the Affordable Care Act (ACA). Wisconsin chose not to accept federal funding to set up a health exchange or to expand Medicaid under the ACA. As a result, Minnesota residents were more likely to have health insurance than their counterparts in Wisconsin, with stronger insurance take-up of both government and private health insurance since 2010.
- From 2010 to 2017, the share of Wisconsin workers in unions fells by 5.9 percentage points from 14.2 percent to 8.3 percent—the largest decline in union membership of any state in that period. This is likely due to the 2011 passage of Act 10, which stripped collective bargaining rights from public sector workers, and the subsequent passage of a so-called “right-to-work” law.
Cooper also notes that population trends also paint a more favorable picture for Minnesota than Wisconsin. From 2010 to 2016, both states had more residents migrate to another state than move into Minnesota or Wisconsin (although Minnesota had a net gain in overall migration, due to migration from outside the country). However, the domestic migration trend has recently shifted in Minnesota. In 2016-2017, net domestic migration was positive, with nearly 8,000 more U.S. residents moving to Minnesota than departing. In Wisconsin, net migration was still negative, with over 2,000 more people leaving the badger state than entering from elsewhere in the United States.