You might be surprised to learn that last year Fargo’s Cass County grew much more rapidly than the two core Twin Cities metro counties, Hennepin and Ramsey, home to Minneapolis and St. Paul, respectively.
Cass County added 3,441 residents, a gain of 1.8%. By contrast, Minnesota’s two largest counties actually shrank from 2021 to 2022, according to Census Bureau estimates. Hennepin dwindled by 6,615 residents, or 0.52%, and Ramsey lost 6,448, or 1.19%.
Overall, Minnesota added 5,713 residents, eking out a net gain of 0.1%. But the fact that the state’s two leading counties are losing people should be a wakeup call in St. Paul — one of many economic and demographic warning signs.
Minnesota has long been experiencing outmigration, a sign that people are voting with their feet by moving out of the state. Minnesota’s outmigration trend is nothing new.
After gaining more people from other states through in-migration from 1991 through 2001, Minnesota since then has been losing population through outmigration. Despite that troubling trend, there is no sense of alarm from leaders in the Minnesota DFL Party, which controls both chambers of the Legislature and the governor’s office.
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The reasons behind the population challenges can be found in economic indicators. Unfortunately, Minnesota ranked among the bottom 20 states this decade in several key economic growth indicators, according to a recent report by the Minnesota Chamber Foundation .
The North Star State ranked 35th in gross domestic product growth, 40th in job growth, 35th in labor force growth and 42nd in net domestic migration.
These are not signs of a vibrant economy on the upswing, and the state’s political leaders should take note.
Here’s a sobering demographic projection from the Minnesota Chamber: Employers will be drawing from a labor pool of working-age adults that will be roughly the same number that it is today in 2030.
Minnesota’s labor pool, in other words, is treading water. That’s not a recipe for robust economic growth. Minnesota has work to do to boost productivity through business investments and increasing human capital — trained workers.
To do that, the state must fashion a regulatory and tax climate that encourages investment and attracts people.
Minnesota’s economy is well developed and impressively diverse, and the state has a high quality of life. It’s the envy of many other states. But, as investment advisers remind us, past performance is no guarantee of future results. Minnesota can’t rest on its laurels and feel smug that it will continue to be a magnet for people and entrepreneurs.
Among the key steps leaders should be taking to pave the way for a brighter future: reducing taxes to attract people and investment. Minnesota ranks 45th in the Tax Foundation’s 2022 State Business Tax Climate Index .
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Minnesota also should streamline its permitting processes and make the state more affordable.
In an age when many can work remotely, the competition for talent with other states is greater than ever before.
Minnesota has a cold climate. It can’t afford to have a frosty business climate. People respond — negatively or positively — to the signals the state’s leaders send.
The Trust Project
