PoliGraph: Economic claims from the 3rd Gov. debate
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In round three of this year’s gubernatorial debates, Gov. Mark Dayton and his Republican challenger Jeff Johnson argued about the health of the state’s economy.
Dayton said things are getting better, and he pointed to job creation under his watch as evidence.
But Johnson said Dayton isn’t telling the whole story, and points to other studies that support his views.
PoliGraph investigated and found there’s good news and bad news in the numbers, but that the evidence generally sides with Dayton.
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The Evidence
Gov. Mark Dayton: “Since Jan 2011, our employment increase has been 6.1 percent compared to Wisconsin’s 4.3 percent compared to Iowa’s 5.2 percent compared to South Dakota’s 4.1 percent. So we’re doing well. We’re doing better than most other states. Our per capita income is $6,000-7,000 higher than Wisconsin’s.”
For the most part, Dayton has his facts right. Since Dayton took office in January 2011, the number of jobs in Minnesota has increased more than in other states nearby.
According to the Minnesota Department of Employment and Economic Development (DEED), Minnesota has regained all the jobs it lost during the recession – and then some. And the state’s unemployment rate is below the national average of 5.9 percent at 4.1 percent.
Dayton doesn’t quite hit the mark on Minnesota’s per capita income compared to Wisconsin’s. It’s about $4,700 higher than our neighbors to the east, according to DEED.
GOP gubernatorial candidate Jeff Johnson: “The private sector is not creating businesses in this state. The Kauffman Foundation… says that over the last four years Minnesota is dead last per capita in the country for creation of businesses. And if you look at the most recent statistics – not old statistics – but the ones that came out two weeks ago from the Bureau of Labor Statistics, our job growth rate over the last year in Minnesota is 41st in the country and last in the Midwest.”
It’s true that Minnesota ranked last in a Kauffman Index of Entrepreneurial Activity report on state business growth.
But that report is somewhat out of date, and its author says that states that have low entrepreneurial indexes tend to reflect low unemployment: the more people there are who have jobs, the fewer people there are who are forced to start new businesses.
Furthermore, different indexes produce different results because they measure different factors. For instance, the University of Nebraska released its State Entrepreneurship Index in August, which ranked Minnesota 13
th
in the country for business growth.
Johnson also points to Bureau of Labor Statistics numbers that show Minnesota lags in job growth compared to other Midwestern states. This is tricky to sort out because BLS produces two sets of numbers – quarterly and monthly. Johnson is relying on more precise but out-of-date quarterly data to make his case. Meanwhile the BLS monthly numbers show Minnesota’s job growth rate increased 2 percent since last year. But those numbers are estimates.
The Verdict
For the most part, Dayton and Johnson characterize their sources correctly. But both appear to be cherry-picking numbers and studies to make their case about the state’s economy.
In fact, there are many ways to slice the numbers, and each method produces a different outcome.
And you can't look at job growth or business growth in a vacuum. But other economic measures, including GDP growth, business survival rate and per capita income, Minnesota is doing pretty well compared to other states.
Kimberly Lyons is the lead Minnesota analyst for Moody's Investors Service, the credit rating agency. She says that Minnesota’s economy isn’t perfect but it’s improving from where it was a few years ago. Unemployment is relatively low, job growth is up, and per capita income is strong, she said.
“So when we’re looking at the big picture over all, we look at a couple of different data points in the economy, and Minnesota is actually average to above average within that metric,” Lyons said.
A June report from Moody’s Analytics has more details:
“Bolstered by robust growth in Minneapolis, Minnesota’s expansion is in full swing,” the report states. “Nearly all industries are growing, with professional services, manufacturing and construction adding jobs at a strong clip. The unemployment rate has fallen to 4.6% [now 4.1 percent], well below the Midwest and U.S. rates.”
But Moody's also finds some red flags. Medtronic, a major business, is moving its headquarters overseas to take advantage of a more favorable tax climate. Surrounding states with a better tax infrastructure can attract businesses. And the fact that “Minneapolis will enjoy the bulk of the gains… [leaves] areas outside the Twin Cities at risk of being left behind.”
Dayton’s claim earns an accurate. For painting an overly dismal picture of the state’s business climate, Johnson earns a misleading.
Additional Sources:
Data from the Bureau of Labor Statistics
Data from the Minnesota Department of Employment and Economic Development