Minnesota’s unemployment rate hit 6.2 percent in August, marking the highest unemployment rate in the state in more than 22 years when the rate hit 6.3 percent in December of 1985.
The last time that the state’s unemployment was as high as it was in August, we could at least brag that our unemployment rate was significantly below the national average. Unfortunately, in our current situation even this consolation prize eludes us. In August 2008, Minnesota’s unemployment rate was 0.1 percent above the national average. This marks the second consecutive month in which the Minnesota unemployment rate exceeded the national average.
When Tim Pawlenty entered the Governor’s office in January 2003, Minnesota’s unemployment rate was 1.1 percent below the national average. After five and a half years of “no new tax” policies, Minnesota’s public investment has declined relative to the rest of the nation, while our unemployment rate has increased. For more on Minnesota’s declining investment and deteriorating economic performance, see the recent Minnesota 2020 report, Minnesota’s Slip Toward Mediocrity: Less Investment, Less Return.
Declining taxes and shrinking government budgets were supposed to create an economic boom in Minnesota. Sadly, the anticipated boom has turned out to be a bust. Based on recent unemployment data and other indicators, declining investment in education, transportation, and other public services has done more harm than good to the state’s economy.
MN 2020 Editor’s Note: Minnesota 2020 just learned that Minnesotans’ personal income only grew slightly more than half the national rate.