News & Updates

Good news is worth repeating. Last fall, North Star published an analysis showing that while Minnesota and Wisconsin had similarly low unemployment rates, the two states reached this point via very different paths. Minnesota reached its low unemployment rate with above average job and labor force growth, while Wisconsin had below average job and labor force growth. Since the publication of that article, these trends have continued, with Minnesota’s job and labor force growth further outpacing Wisconsin’s.

At the dawn of the Great Recession in December of 2007, both Minnesota and Wisconsin had a 4.7% unemployment rate.* Minnesota’s unemployment rate increased less rapidly than Wisconsin’s during the recession. From the end of the recession through 2014, the unemployment rate in both states declined at a similar pace. Since 2015, Minnesota’s unemployment rate has declined less rapidly than Wisconsin’s; this is not surprising, since Minnesota reached near full employment sooner than Wisconsin, thus making incremental reductions in the unemployment rate more difficult to achieve. As of August 2018—the most current month for which data is available—Minnesota’s unemployment rate (2.9%) is nearly identical to Wisconsin’s (3.0%). Both rates are currently about one percent below the national rate of 3.9%.

The unemployment rate is equal to the number of unemployed people as a percentage of the entire labor force. In order to be part of the labor force, a person must be working or seeking work. (When a person stops seeking work, that person is no longer counted as unemployed or as a member of the labor force.) Whenever the percentage growth in employment exceeds the percentage growth in the labor force, the unemployment rate falls. Thus, it is possible to have weak employment growth and still have a drop in the unemployment rate—provided that growth in the labor force is even weaker.

This has been the Wisconsin route. From December 2007 to August 2018, employment in Wisconsin has increased by 4.7%—well below the national growth rate of 6.3%. However, Wisconsin’s labor force growth has been even more anemic: 2.9% versus a national rate of 5.1%. The relatively weak job market in the Badger State likely discourages workers from looking for work, thus restricting growth in the labor force and lowering the unemployment rate not through job growth, but through frustration.

Minnesota, meanwhile, has achieved its low unemployment rate with job and labor force growth well above the national average. From December 2007 to August 2018, Minnesota’s employment and labor force increased by 8.8% and 6.7% respectively—both rates significantly above the national average and approximately double the Wisconsin growth rates.

Since the previous North Star article was published last fall (based on October 2017 data), Minnesota’s employment and labor force have increased by 1.6% and 1.1% respectively, compared to 0.8% and 0.6% in Wisconsin.† Over this period, Minnesota has added nearly 1.9 jobs for every 1.0 in Wisconsin. The most recent Quarterly Census of Employment and Wages from the U.S. Bureau of Labor Statistics shows that Minnesota has surpassed Wisconsin in terms of the total number of jobs, despite the fact that Minnesota has over 200,000 fewer people.

To a significant extent, Wisconsin’s low unemployment rate is driven by a weak job market that discourages workers from entering or staying in the labor force. Meanwhile, in Minnesota the low unemployment rate results from strong labor force growth combined with even more robust growth in the number of jobs.

Progressives in Minnesota and conservatives in Wisconsin both point to their low unemployment rates as an indication of the success of their respective fiscal policies. However, a deeper dive into the numbers shows that only Minnesota has anything to crow about.


*Unless otherwise noted, the data used in this article is derived the U.S. Bureau of Labor Statistics’ Current Population Survey and Local Area Unemployment Statistics (seasonally adjusted). Data for August 2018 is preliminary.

Minnesota’s robust employment growth is particular impressive in light of its low unemployment rate. A June 2018 North Star article found that states with low unemployment rates typically have lower rates of job growth than states with high unemployment rates “since high unemployment states have larger pools of unemployed workers from which to fuel job growth.”

Big Debt, Big Deal

Minnesota is living under a $27 billion mountain of student loan debt.1 A student graduating in Minnesota today has an average of $31,000 in debt.2 Whether we realize it or not, it is affecting both individuals and the broader community. The challenge of student loan...

Minnesota Business Tax Rate Equals U.S. Average

Business groups—including the Minnesota Business Partnership and Minnesota Chamber of Commerce—actively cultivate the notion that business taxes in the Gopher State are high relative to the rest of the nation. However, total state and local business taxes as a share...

Ensure Respect for Minimum Wage Laws

(Note: This article is co-authored with Laura Huizar, a staff attorney at the National Employment Law Project in Washington, D.C.) A few weeks ago, the St. Paul City Council introduced a draft ordinance that would raise the city’s minimum wage to $15 an hour. That’s a...

Caring in Central Minnesota

Minnesota is getting older every day.1 The aging of our population is increasing demand for home health and personal care workers. We also continue to have population growth through both immigration and natural growth. To fill the needs of our changing population we...

Gas Tax Buys One-Third Less Today Than in 2000

The single largest source of funding for Minnesota’s transportation system comes from the state gas tax. However, the purchasing power of that tax has dropped by over one-third over the course of the century, leaving funding for state roads and bridges in a precarious...

State Aids: The Shrinking Slice of the City Revenue Pie

City property taxes have increased significantly in recent decades. Even after adjusting for inflation and population growth, the property taxes collected by Minnesota cities have increased by 48% from 1990 to 2018. However, real (i.e., inflation-adjusted) per capita...

Government Growth in Context

Shocking claims of growth in government abound. However, viewed in context of the economic, demographic, and societal changes that have occurred over the last fifty years, the growth in government is far less astounding than the sound-bite statistics indicate. For...

Impact of Legislative Decisions on School Funding

State aid to Minnesota school districts—properly adjusted for inflation—has fluctuated significantly over the last fifteen years, but the overall trend has been downward, as documented in a recent North Star report. Of course, long-term trends are not exclusively the...

Minnesota’s Shared Health

Minnesotans value a high quality of life. It is part of the Minnesota story and one of our competitive advantages. This includes having healthy people in healthy communities. Historically, policy makers have recognized the importance of health care access by investing...

Contact Us

Use this form to get in touch with North Star staff, or send your questions, suggestions, and ideas to