Report Shows Minnesota Losing Economic Border War With Wisconsin

A new report suggests that Wisconsin’s policies under Governor Scott Walker have seen the state outpace Democratic-controlled Minnesota in a number of economic factors, particularly in post-tax income.

The report published by the Wisconsin Policy Research Institute and authored by University of Wisconsin – Madison economist Noah Williams, took issue with President Obama’s statements in LaCrosse last November in which he claimed that Minnesota’s steps to raise taxes on the top two percent and raise the minimum wage proved Republican theories on economics wrong since the end of the great recession.

Williams’ report concludes that this is only true when examining broad measurements like total GDP growth, without factoring in Minnesota’s greater population growth over the same period of time.

“It is difficult to see evidence for the claims that Wisconsin’s policies have led to a decline in the middle class, while Minnesota has embraced policies strengthening the middle class,” Williams writes.

When the goal is to see how the states’ citizens are faring, there is a different story to be told.

The report finds that while Wisconsin and Minnesota have seen pre-tax incomes grow at nearly identical rates since 2011, 6.3 and 6.4 percent respectively, the per-capita after-tax income growth has been more than a full percentage point higher across the border than it has been in Minnesota.

President Obama’s assertion that Wisconsin’s conservative policies have been failing the middle class also rung hollow under Williams’ examination. Williams found that both states have seen increases in income inequality, and both states have seen the percentage of middle class households decrease. In Wisconsin however, the shift was from low-income to middle-income, and middle-income to high-income, while Minnesota saw shifts in both directions from middle-income households.

Williams is hesitant to label these discrepancies as the result of any one policy, as there are too many other variables in play, from population to each state’s starting points. He does note though that, “We have seen that the relative tax policies appear to have affected after-tax incomes, boosting disposable income growth in Wisconsin.”

The report concludes saying that states have done better than the national average in recovering from the great recession, and that a fair examination past broadly general statistics shows that there is little truth to claims that Minnesota’s policies have made it a better place to live than Wisconsin.