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How Bad Are Things In Minnesota, Really?

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From the rising unemployment numbers to the state budget crisis, the news in Minnesota seems to be getting worse and worse. Adding insult to injury came the recent news last week that Minneapolis ranked as the fourth least desirable metropolitan area to where Americans would like to move out of 30 cities, according to a Pew Research Center survey.

But Minnesota isn't alone in facing challenges during these recessionary times. The question for today is not whether or not things are going south in Minnesota at the moment, but from what baseline Minnesota begins its slide. Smart Politics examines how Minnesota rates regionally in the Upper Midwest and across the country among a number of key social and economic indicators.

First, Minnesotans can take heart in the fact that they enjoy the longest life expectancy in the Upper Midwest and second longest in the country, at 78.8 years (second to Hawaii).

Life Expectancy By State

State
Age (years)
National Rank
Minnesota
78.8
2
Iowa
78.3
7
North Dakota
78.3
8
Wisconsin
77.9
14
South Dakota
77.7
18
Source: Harvard University Initiative for Global Health and the Harvard School of Public Health (2006 data)

Residents of the Gopher State also enjoy the highest median annual income in the Upper Midwest - 14 percent higher than Wisconsinites, 17 percent higher than Iowans, 25 percent higher than South Dakotans, and 29 percent more than North Dakotans. Minnesota's median annual income ranks an impressive 8th nationally.

Median Annual Income By State

State
Income
National Rank
Minnesota
$57,815
8
Wisconsin
$50,619
19
Iowa
$49,262
24
South Dakota
$46,321
34
North Dakota
$44,743
38
Source: U.S. Census Bureau, Current Population Survey, 2005 to 2007 Annual Social and Economic Supplements.

The job losses that have hit the nation hard are having a particularly profound effect on residents of Minnesota (as documented in great length here at Smart Politics in recent weeks). The unemployment rate in Minnesota is the worst in the region, at 6.9 percent. While North Dakota, South Dakota, and Iowa are home to the 2nd, 3rd, and 6th lowest rates in the country, Minnesota ranks just the 26th best.

Seasonally Adjusted Unemployment Rate By State

State
Unemployment Rate
National Rank (lowest rate)
North Dakota
3.5%
2
South Dakota
3.9%
3
Iowa
4.6%
6
Wisconsin
6.2%
19
Minnesota
6.9%
26
Source: Bureau of Labor Statistics (December 2008 data).

This loss of jobs is correlated to the rate of housing foreclosures - where Minnesota ranks 25th in the country and worst in the Upper Midwest. Nearly 1 in 1,000 homes are being foreclosed upon in the Gopher State - more than 7 times the rate for home owners in South Dakota, and more than twice that for Iowans.

Housing Foreclosure Rate By State

State
Foreclosure Rate
National Rank (lowest rate)
South Dakota
1 per 7,840
4
North Dakota
1 per 5,596
6
Iowa
1 per 2,529
12
Wisconsin
1 per 1,288
21
Minnesota
1 per 1,044
25
Source: Kaiser Family Foundation (November 2008 data).

Homeowners who aren't foreclosed upon can take some solace in the fact that the state's property tax rate is the lowest in the region and 23rd lowest in the country, while Wisconsin's is the highest.

Property Tax Rate by State

State
Tax % of
Home Value
National Rank (lowest rate)
Minnesota
0.81%
23
Iowa
1.27%
39
South Dakota
1.38%
40
North Dakota
1.50%
43
Wisconsin
1.82%
50
Source: U.S. Census Bureau, 2005 American Community Survey; Tax Foundation

However, Minnesotans do incur one of the highest state sales tax rates in the nation, at 6.5 percent. This is by far the largest rate in the Upper Midwest.

Sales Tax Rate By State

State
Tax Rate
National Rank (lowest rate)
South Dakota
4.0%
7
Iowa
5.0%
18
North Dakota
5.0%
18
Wisconsin
5.0%
18
Minnesota
6.5%
43
Source: Federation of Tax Administrators (2008 data)

Minnesota has been able to overcome its reputation for being one of the higher taxed states in the nation by producing the 9th highest per capita state GDP in the country, and by far the greatest in the Upper Midwest (15 percent more than Iowa, its closest rival).

Per Capita State Gross Domestic Product By State

State
GDP per Capita
National Rank
Minnesota
$41,353
9
Iowa
$35,814
23
South Dakota
$35,596
24
Wisconsin
$34,890
28
North Dakota
$34,694
30
Source: Bureau of Economic Analysis, U.S. Department of Commerce (2007 data)

Minnesota has invested its resources effectively into health and education programs that, in the recent past, have shown results. Minnesota has the 4th lowest rate of the uninsured in the country, at 9.9 percent, with only Wisconsin besting the Gopher State in the region.

Lack of Health Insurance Among Non-Elderly By State

State
Rate
National Rank (lowest rate)
Wisconsin
9.6
3
Minnesota
9.9
4
Iowa
11.4
9
North Dakota
12.7
15
South Dakota
12.8
16
Source: Urban Institute and Kaiser Commission on Medicaid and the Uninsured (2006-2007 data)

On the education front, while Minnesota only ranks 4th in the region in high school graduation rates, it is 6th in the country, at 85.9 percent.

Freshman High School Graduation Rate By State

State
Graduation Rate
National Rank
Wisconsin
86.7%
2
Iowa
86.6%
3
North Dakota
86.3%
5
Minnesota
85.9%
6
South Dakota
82.3%
11
Source: U.S. Department of Education (2005 data)

However, Minnesota attracts many more college-educated Americans than its Upper Midwestern neighbors, with 31 percent of the population aged 25 and over having received at least a Bachelor's degree.

College Degree Attainment by State

State
College Degree Rate
National Rank
Minnesota
31.0
11
North Dakota
25.7
27
Wisconsin
25.4
30
South Dakota
25.0
33
Iowa
24.3
37
Source: U.S. Census Bureau, American Community Survey, 2007.

Finally, while Minnesota's violent crime rate is more than twice that of North Dakota, it is slightly lower than that of Wisconsin and Iowa - good for the 16th lowest in the country.

Violent Crime Rate By State

State
Violent Crime Rate
National Rank (lowest rate)
North Dakota
142.4
4
South Dakota
169.2
5
Minnesota
288.7
16
Wisconsin
290.9
17
Iowa
294.7
19
Note: Rate per 100,000 inhabitants. Source: Crime in the United States 2007, Federal Bureau of Investigation, U.S. Department of Justice.

All in all, Minnesotans are fortunate to be enduring the current economic crises from a position of relative wealth and health when examining all these social and economic indicators. The Upper Midwest as a whole remains one of the more attractive areas in the country to live when examining the cold hard facts, although the cold weather, and other quality of life indicators are not considered in this analysis here today.

Previous post: How Long Will It Take to Regain the 65,000+ Jobs Lost in Minnesota in 2008?
Next post: Minnesota's 2010 Budget Deficit Among Top 10 Largest In Nation

3 Comments


  • I'm surprised that you included info about sales tax rates, but not about the much more burdensome income tax - one of the highest, if not *the* highest in the nation, as I understand it. If you adjust our incomes for what we lose right off the top to income tax, I would be willing to bet that we are right down at or below our neighboring states in actual take-home pay. And after the collapse of the 35W bridge, don't try to tell me that all that tax money is paying off for us in better infrastructure, etc. Maybe we're not so wealthy after all.....

  • > I'm surprised that you included info about sales tax rates, but
    > not about the much more burdensome income tax - one of the
    > highest, if not *the* highest in the nation, as I understand it.

    You raise a good point, and I did consider this. Basically, since the income tax rate is variable (depending on level of income) it would have been a bit arbitrary as to what rate i used to rank Minnesota amongst the states (e.g. the income tax floor rate, the income tax ceiling rate etc.). So, I omitted it from this analysis.

  • Interesting that life expectancy was first. So we get to enjoy being one of the highest taxed people longer? Yahoo!!!

  • Leave a comment


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