Packers and Vikings Tie the Game, but What about Wisconsin and Minnesota?

Monday, November 25, 2013 at 2:51 PM by

Yesterday’s competition between the Green Bay Packers and the Minnesota Vikings ended in a rare tie game. That game is finished, but there is another competition that is still going on between Wisconsin and Minnesota, one that involves job creation and economic growth, rather than touchdowns and field goals.

Wisconsin and Minnesota are similar states in many ways, but we are taking very different approaches to growing our state economies. Policymakers in Wisconsin have focused on cutting taxes, especially for corporations and the wealthiest, sharply reducing state spending on K-12 education and the university system, and limiting tax credits and other services that give a boost to struggling families. In contrast, policymakers in Minnesota have targeted the state’s highest earners for an increase in income taxes, kept education spending on an even keel during the recession, and expanded Medicaid.

The different approaches to economic development amount to a type of experiment, one that policymakers from other states will be watching with a close eye. As a New York Times opinion piece from this weekend put it, “Which side of the experiment — the new right or modern progressivism — has been most effective in increasing jobs and improving business opportunities, not to mention living conditions?”

Others have noticed that the differing approaches taken by Wisconsin and Minnesota offer an opportunity to determine which approach is more successful. On his blog, Jared Bernstein also expounds on the idea of Wisconsin and Minnesota as offering a type of experiment: “The idea is that neighboring states, in this case Wisconsin and Minnesota, face roughly similar economic forces, so there’s a built in control of sorts. That means we can—again, roughly speaking—consider differences in outcomes a function of their quite different approaches to policy.”

In the economic competition that is going on between Wisconsin and Minnesota, so far Minnesota is ahead. Minnesota has a lower unemployment rate than Wisconsin, ranks higher in job growth, and has a faster-growing economy. This game isn’t over, but we worry that a playbook that includes scaling back investments in education, health care, and communities is likely to put Wisconsin at a significant economic disadvantage.

Tamarine Cornelius

 

 

Wisconsin vs Minnesota

One Response to “Packers and Vikings Tie the Game, but What about Wisconsin and Minnesota?”

  1. Tom Zinnen says:

    Beware the foggy powers of the “natural experiment.” The states may be side by side, but the conditions in the two are hardly the same. Wisconsin in particular is stuck between two large magnets for young highly-educated people: the Twin Cities and Chicago. In contrast, Minnesota’s near neighbors include the Dakotas and Iowa. And in some ways, the two states flip-flopped with the election of Nov 2010–Minnesota shifted from a Republican to a Democrat governor, vice versa for Wisconsin. So the pre-existing conditions, being so different, also undercut the ability to come to grips with cause-and-effect. Therefore, in the absence of more powerful analysis to control for variables (the analytical wheelhouse of budgeteers), what we see will be only suggestive, not conclusive. Of course, this will not stop people from drawing conclusions. We do this post hoc/propter hoc thinking all the time. It means an ever-bountiful harvest for cherry pickers.