Minnesota’s economy has experienced significant fluctuations in recent years. The state’s economy grew faster than the
U.S. for decades, with job growth exceeding national job growth 27 of 35 years from 1970-2004. However, since
2005, Minnesota’s economy has grown more slowly than the U.S., averaging just 1.4 percent real GDP growth and 0.7 percent job growth.¹
The COVID-19 pandemic had a profound impact on Minnesota’s economy, with the state experiencing an unprecedented
economic downturn in the first quarter of 2020. Total nonfarm employment fell by 416,000 jobs in March and April, and
unemployment spiked to 11% in May. However, the state’s economy recovered rapidly, with real GDP bouncing back by 30.5% in Q3 and 6% in Q4 of 2020.²
Despite this recovery, Minnesota’s economy still faces significant challenges. The state’s labor force
participation rate fell from 70% in January 2020 to 67.3% by September 2021, and the state’s workforce shortages
have been exacerbated by a decline in labor availability. As of December 2022, Minnesota had only 43 available workers for every 100 job openings, making it the worst workforce shortage in the U.S..
In terms of industry trends, Minnesota’s tech and business service sectors have been driving overall economic growth. Real GDP growth in these sectors increased by a total of $12 billion between 2019-2022, compared to just $9.8 billion for all other industries combined.
Regional Economic Trends
Minnesota’s regional economies have also experienced varying levels of growth. The Twin Cities region, which includes Minneapolis and St. Paul, has been driving the state’s economic growth. However, other regions, such as Southern and Northwest Minnesota, have experienced declining workforce availability and slower economic growth.
Citizen Coping Mechanisms
Despite these economic challenges, Minnesotans have been finding ways to cope. Many residents have been taking advantage of the state’s natural resources, such as its numerous lakes and parks, to enjoy outdoor activities and improve their mental health.
Additionally, the state’s businesses have been adapting to the changing economic landscape. Many companies have been investing in digital technologies, such as artificial intelligence and data analytics, to improve their competitiveness and efficiency.
Overall, while Minnesota’s economy faces significant challenges, the state’s residents and businesses are finding ways to adapt and thrive.
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