Minnesota Is Not Working

Local blogger Gary Gross has performed a public service by digging into the premise behind the Democrats’ re-election campaign this year.  He transcribes the relevant portion of an Alliance for a Better Minnesota (ABM) TV ad supporting Democrat Gov. Mark Dayton,

Look across the land.  On farms and in factories, in classrooms and on construction sites, Minnesota is working. Four years ago, Minnesota faced a $5,000,000,000 deficit. But Gov. Mark Dayton showed strong leadership.  He raised taxes on the wealthiest 2 percent so we could invest in our schools and reduce middle class taxes.  Now Minnesota has 150,000 new jobs and a budget surplus.

As you know, ABM is the well-funded “independent” political group linked by marriage and cash to Dayton’s inner circle.  It’s fair to say that the message above will be the one coordinated across the Dayton campaign, the state Democrat party, and the associated independent spending groups this fall.

But does it have any validity?  Let’s start with the 150,000 jobs claim.  There is simply no support for that figure.  Based on data at the U.S. Department of Labor’s Bureau of Labor Statistics, if you give Dayton credit for the high-water mark for jobs while he has held office (May 2014) and subtract the employment level from before his election (October 2010) you get only 111,626 net jobs created, a far cry from 150,000.

More to the point, if you take today’s figure (July 2014) and subtract the figure prior to his inauguration (December 2010) you get only 96,515, less than 2/3 of the amount claimed by ABM.

But, can Dayton fairly claim even the lower number?  As Gross points out in his piece, most of the claimed “new jobs” were created prior to the passage of the higher taxes on the “wealthiest 2 percent.”

From 2011 to 2012—the first half of Dayton’s term—the state legislature was controlled by Republicans.  Democrats achieved their current one-party rule in St. Paul only in January 2013.  Looking year-by-year at Dayton’s term, more jobs were created under the Republican legislature (shown in red) than have been created so far since Dayton’s fellow Democrats took charge (shown in blue),

In this case, the trend is not our friend.  The hard work of pulling Minnesota out of the Great Recession was done when the Republicans led the Legislature.  From October 2010 to October 2012, the state’s unemployment rate fell from 7.2 percent to 5.5 percent.  In the time the Democrats have been in charge, the rate has fallen further by only another 1.0 percent, to 4.5.

Looking closer at the time period before and after Dayton’s tax hikes and “investments” were enacted (May 2013), the message is even more stark,

Since the Dayton tax hikes were put into law, Minnesota has created only a net 32,000 jobs, about 1/5 of the number claimed by ABM as a result of the new taxes and spending.  In fact, according to data at the BLS, Minnesota has lost jobs in each of the past two months.

And the deficit?  As I’ve pointed out, state tax revenue collections have been falling short, of late.

ABM’s claims fail as matters of fact, but they do make for powerful myth.  Minneapolis Star Tribune reporters and columnists reprint the ‘booming economy” narrative on a daily basis, even as the actual figures issued by state government agencies become increasingly dire.

The danger is that the low information voters who decide elections will vote for the status quo, thinking they are getting more economic boom.  They’ll wake up in November to find out that the jobs have vanished, along with the state budget surplus.

Minnesota media owe their readers (and voters) an honest discussion of the issues, based on actual facts.