What are the forces moving the Minnesota economy? Adam Belz tries to identify the trends and show the connections between Minnesota and the larger U.S. and global economies. You can connect with him on Twitter: @adambelz
Minnesota’s job market has improved a lot since the end of the recession.
Unemployment fell to 4.6 percent in December, and as you can see in the above chart, overall employment has recovered what it lost in the downturn.
But getting a good job is still a huge challenge for many Minnesotans, as a recent report from the Minnesota Budget Project shows. Here are four groups struggling to keep up, all following charts courtesy of the Minnesota Budget Project:
People with less education
Minnesotans without a high school diploma have an unemployment rate of 13.2 percent. Those with a high school education have an unemployment rate of 6.5 percent. Those with a college diploma, by contrast, have an unemployment rate of 3.2 percent.
Young Minnesotans have seen their jobless rates improve, but 16- to 24-year-olds are still unemployed at a rate of 9.1 percent. This also is in contrast to older workers.
Single parent families
One out of ten single parents remained unemployed in 2013.
The unemployment rate for people of color went completely haywire in Minnesota during the recession – particularly for African Americans and Native Americans. Their joblessness has declined since 2011, but is still well above the rate for white Minnesotans.
Raj Chetty and several other economists and staff at Harvard, UC-Berkeley and the U.S. Treasury chose 40 million people (including 193,000 in Minnesota) born in the 1970s and1980s, and compared their tax returns from 1996 to 2011 to the tax returns of their parents over the same period. They've organized the data beautifully and made it available for download here.
The research tells us, by county, whether Americans in their 20s and 30s have been able to surpass their parents in income, and by how much. Across America, even in the least economically mobile areas, children do better than their parents, but the nation as a whole does not compare favorably to countries like Denmark and Sweden. But in Minnesota, and Iowa and the Dakota, children generally do quite a bit better than their parents.
"Minnesota looks like Denmark," said Chetty, in an interview this morning.
A major goal of the project was to measure intergenerational economic mobility (the American Dream), and much was written about the report in the news, some of it quite good. The New York Times made a big interactive map of the country using one dataset. It shows the percentage of children from each county who end up among the top fifth of earners even though their parents are in the bottom fifth. Lee Schafer pointed out in the Strib that in some parts of southwest Minnesota more than 18 percent of children made that impressive jump. In Minneapolis, about 9 percent of children in the cohort have been able to.
The map shows that economic mobility is less common in southeastern states (intergenerational poverty is entrenched in the Mississippi Delta), parts of Ohio and Michigan, and generally in larger cities. West of the Mississippi River and in sparsely populated regions things tend to improve.
Strong schools and economic integration are key to economic mobility, Chetty said, and rural areas do well by those measures, partly because children of all incomes tend to go to school together in small towns, unlike large cities.
Chetty said the oil and ag commodity booms in the Upper Midwest have helped more poor children end up in the top fifth of income-earners, but he says the data shows the trend runs deeper than economic shifts in the 2000s. Based on measures like college attendance and other outcomes, North Dakota, for instance was doing well even before the oil boom hit full stride.
"North Dakota looks much better in terms of other outcomes," he said.
The data is full of other information. A second measure of economic mobility the researchers used was "absolute upward mobility," which I think is just as interesting, and Chetty prefers to talk about. The number is calculated as follows: Look at earnings for children who grew up under parents in the 25th percentile for income in a certain county. If those children's average income is in the 44th percentile, then the "absolute upward mobility" from that county is 44.
That's what the map below displays. Schafer was right about southwest Minnesota. There's also the area around Thief River Falls, doing well. Pretty much all of outstate Minnesota shows up well, and even Minneapolis, at 44.2, is in the top 20 for large cities.
Nominal GDP growth in 2012 across the lower 48 states, with North Dakota sticking out like a sore thumb. Scroll over a state for detail, and if you move the toggle in the upper right, you can see that only seven states -- Washington, Oregon, North Dakota, Texas, Minnesota, Indiana and Tennessee -- had growth over 5 percent.
Scroll over the map to see which Minnesota counties had the most and least job growth from 2000 to 2013. Data comes from the Quarterly Census of Employment and Wages.
You can see that the counties that ring the core of the Twin Cities are varying shades of green, with the strongest job growth in the northwest suburbs.
The two core counties of the metro area have both sustained major job losses in the past 13 years, though, with Ramsey County down 4 percent and Hennepin County down 2.5 percent
Outside the metro, it's hit or miss. Pennington County in northwest Minnesota, as we reported in 2013, is a bit of an anomaly driven by the growth of one company, DigiKey. Jackson County in southwest Minnesota is also an anomaly. But 42 of the state's 87 counties posted a net job loss from July 2000 to July 2013, which is the period covered by the data. Find out where your county fits in.
Thanks to a tweet by Marc Andreessen, I saw a couple of maps like the one above drifting around on the Internet yesterday, in which states are compared to countries with equal or nearly-equal gross domestic product.
It's a lesson in the massiveness of the American economy (California's economy is as large as Russia's!). And it's fun, so late last night I downloaded data from the World Bank and the U.S. Department of Commerce and made my own comparisons. Minnesota is the size of Malaysia; Wisconsin, Egypt; Florida, the Netherlands.
The one on Strange Maps is just old, out of date, apparently based on 2007 data.
McKay's map, which was actually posted six days ago by a Redditor named Phaenthi, is better, and our maps agree in several instances. However, Phaenthi sometimes uses the same country for multiple states (I gave each state its own country), and I chose a slightly different methodology. While Phaenthi's map lists each state as a country it overtakes in GDP, mine organizes the states and countries so that the comparisons are based on which are closest, give or take a little. This helps in the case of California, which is significantly larger than Canada by GDP and aligns more closely with Russia. Also, Minnesota is well ahead of Nigeria but is similar to Malaysia. Wisconsin beats Ireland by a wide margin but its GDP is almost identical to Egypt's.
Now, six nations have such large economies that none of the 50 states compare: they are China, Japan, Germany, France, Great Britain and Brazil. California has the largest economy in the U.S. by far -- over $2 trillion in 2012 GDP -- and it is smaller than each of those. But California is almost even with Russia and Italy, and bigger than any other country.
Here are the top 25 economies in the world, according to the World Bank, and the 10 American states that reach the same level. (I calculated the difference between each country and state I compared, and tried to minimize it as much as possible by moving states around. Also included in the spreadsheet are Phaenthi's choice for each state.)
And here's my methodology for all 50 states. You can see that the difference between the country and state is rarely more than 10 percent, give or take. Apologies to Kansas, Nevada and Utah. There were no perfect country comparisons in the $135 billion GDP ballpark.
These are total GDP numbers, not per capita. That's another project for another day.
And finally, yes, I know Puerto Rico and Hong Kong are not countries. But the World Bank tracks their GDPs and using them was helpful in making other comparisons more accurate.
If anybody else is weirdly interested in this sort of thing and wants the data, email me at firstname.lastname@example.org and I'll ship it over.