A recent study of high-tech jobs by Praxis Strategy Group, as reported in Forbes magazine, found that they are no longer as heavily concentrated in Silicon Valley as they once were. Instead, tech jobs are becoming widely dispersed around the U.S. That’s the good news. The bad news is that they aren’t coming to Minnesota.

The study found that the cities where STEM jobs are growing most rapidly are Orlando, San Francisco, Charlotte, Grand Rapids, Salt Lake City, Tampa, Seattle, Raleigh, Miami and Las Vegas. The Twin Cities are nowhere on the list.

That report was followed by Amazon’s announcement of the 20 cities that are finalists for the location of its second corporate headquarters, which will employ 50,000 people at average salaries exceeding $100,000. The Twin Cities submitted a proposal for the project, but didn’t make the list of 20 finalists. Atlanta, Austin, Boston, Chicago, Columbus, Dallas, Denver, Indianapolis, Los Angeles, Miami, Montgomery County, Maryland, Nashville, Newark, New York City, northern Virginia, Philadelphia, Pittsburgh, Raleigh, Toronto, and Washington, D.C., made the cut.

Why is Minnesota consistently being left out when companies decide where to locate facilities that will employ lots of STEM workers at high salaries? The Forbes story offers a clue: “[T]he fastest STEM growth is occurring in somewhat less ballyhooed places that have far lower housing costs and typically have less onerous tax and regulatory regimes.”

Unfortunately, the Twin Cities have among the highest housing costs in the nation, in part due to local regulations that add more to housing costs than nearly anywhere else. And Minnesota is one of the highest-taxed states in the country, with respect to both personal income taxes and corporate income taxes. Our overall tax burden ranks in the top eight nationally, and Minnesota’s lowest personal income tax rate of 5.35 percent is higher than the highest tax bracket in 22 states. Finally, Minnesota has a well-deserved reputation as a hyper-regulated state.

The most recent Star Tribune Minnesota Poll asked Minnesotans what they think is the most important issue in this year’s race for governor. By far the largest number, 38 percent, said “jobs and the economy.” Another 12 percent said “taxes.” Probably none of these 12 percent meant they wanted their taxes to be higher.

There is a reason why Minnesotans are expressing concern about the state’s economy and its ability to continue producing high-paying jobs. The reality is that, while Minnesota’s economic performance in recent years hasn’t been terrible, it hasn’t been very good, either. From 2000 through 2016, Minnesota ranked only 32nd among the states in per capita income growth, and 28th among the states in job growth. Over the same period, Minnesota’s rate of GDP growth fell below the national average. In 2016, the state’s economy was 2.5 percent smaller than it would have been if Minnesota’s GDP growth had been average.

Minnesota can do better. For the sake of our children and grandchildren, we need to do better.

John Hinderaker is president of Center of the American Experiment in Golden Valley.


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