Minnesota outpaces Wisconsin, report says, in latest volley over liberal vs. conservative policies

Ever since northern neighbors Wisconsin and Minnesota veered off in opposite directions politically, a rhetorical border war has been fanned over the competing parties and policies that have guided them.

The latest volley comes from a liberal research group, the Economic Policy Institute, which finds that “on a multitude of key measures, Minnesota’s economic performance over the past seven years has been markedly better than that of its neighbor to the east.”

Put another way, Minnesota has fared better economically under Democrats than Wisconsin has under Republicans, according to a study released Tuesday by the Washington, D.C.-based organization.

It points to Wisconsin’s slower growth in wages, jobs, income and population since the two adjacent states elected vastly different political leadership.

Republican Gov. Scott Walker has served in Wisconsin since 2011, as has Democratic Gov. Mark Dayton in Minnesota.

The report argues that because these states share so many characteristics, they offer a “natural experiment” or case study in how “two different governing philosophies” have shaped their economic recoveries from the Great Recession of 2008 and 2009.

It points to a variety of very real indicators on which Minnesota has outperformed Wisconsin.

For example, the total number of nonfarm jobs has grown 11% in Minnesota since the end of 2010, compared to 7.9% in Wisconsin.

Median household income grew in real terms by 7.2% in Minnesota between 2010 and 2016, compared to 5.1% in Wisconsin.

Minnesota’s population has grown 5.1% since 2010, compared to 1.9% for Wisconsin.

Median real hourly wages have gone up 2.4% since 2010 in Minnesota, compared to 0.3% in Wisconsin. The report cites other data on poverty, health care coverage, labor force participation and union membership.

“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 the report’s author, David Cooper.

A spokeswoman for Walker pointed to a different economic measure on which Wisconsin has bragging rights. Wisconsin’s most recent unemployment rate is 2.9%. Minnesota’s is 3.2%.

“Wages are up, and more people are working than ever before under Governor Walker’s leadership,” Amy Hasenberg said in a statement. “Our business and tax climates have also dramatically improved from where they were in 2010, which is why global companies like Foxconn and Haribo are choosing to create good-paying, family-supporting jobs right here in Wisconsin.”

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Comparisons between the two neighboring states are fraught with partisan overtones, especially in a mid-term election year. Dayton is not seeking re-election, but Walker is running for a third term, arguing his policies have delivered for Wisconsin economically. And this year, as in past elections, the numbers are being read very differently by each side.

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For example, on the subject of jobs, Walker’s favorite talking point is the record low unemployment rate. Democrats often focus on a different data point, the rate of job growth, where Wisconsin has lagged well behind the nation — and behind some neighboring states such as Minnesota — during Walker’s tenure.

The concurrence of the Walker and Dayton administrations has produced a growing literature comparing the performance of the two states. Minnesota has pursued liberal policies, spending more on health care and infrastructure and education, raising taxes on the wealthy, raising the minimum wage, increasing the number of public employees. Wisconsin has pursued conservative policies, cutting taxes, weakening labor unions, deregulating, rejecting federal funding for infrastructure, reducing the number of public employees.

There is no question Minnesota has outperformed Wisconsin on several key, broad economic indicators. Democrats say this shows Minnesota’s policies have produced better economic outcomes.

The report from the Economic Policy Institute, a pro-labor group, argues that Walker’s weakening of unions has been especially harmful to workers’ wages (the share of Wisconsin workers in unions has declined since 2010 from 14.2% to 8.3%). Walker’s supporters have argued the comparisons between the two states are premature, selective or overlook long-term factors that predate the governor.

Economists generally warn there are limits to how much a state’s own policies help or hurt its economy, because of the dominant role of national and global factors. Some analysts have argued Minnesota’s economic advantages are deep-seated and date back decades, though job and wage growth were comparable in the two states during the period before the Great Recession, from 2000 to 2007.

Minnesota boasts a higher rate of college-education, a different economic mix and a larger and wealthier metropolitan core in the Twin Cities.

But the comparisons between Minnesota and Wisconsin have been especially inviting because of the states have so much in common in their geography, size, heritage, culture and even political history.

Before 2016, Wisconsin and Minnesota had voted the same way in seven straight presidential elections. In the 2016 race, they split. Wisconsin voted for Republican Donald Trump and Minnesota voted for Democrat Hillary Clinton. But the actual voting gap between the two states was quite small. Trump won Wisconsin by 0.8 percentage points and lost Minnesota by 1.5 points.

Even their divergent paths in state government have been the product of some close elections. But the vast differences between the two major parties have produced dramatically disparate policies.