By Tara Bitzan, Executive Director, Alexandria Lakes Area Chamber of Commerce
The Minnesota Chamber of Commerce recently released the 2019 Business Benchmarks. This annual report compiles key indicators that define our business climate – where Minnesota ranks compared with other states – to identify strengths and areas for improvement for Minnesota to compete in the global economy.
Key findings of the data compiled from state and federal agencies shows that innovation is a key strength of Minnesota, and the state continues to make progress in infrastructure improvements – an important factor in the ability to compete in a global marketplace. Minnesota is ranked first in business five-year survival, second in labor participation rate, fourth in number of residents with two year degrees or higher, fourth in patents per capita and fourth in technology and science workforce.
Those are exciting numbers and definitely a source of pride for our state. However, there are other numbers that are overshadowing these – numbers that can and must be controlled so that we can allow our innovation and shining workforce to help us flourish.
The state’s economy is growing at a slower pace than many other states and we remain in the top five states with the highest tax rates for both corporate and individual taxes. Minnesota ranks third highest in corporate income tax, fourth highest in business and entrepreneurship tax index, fifth highest in pass-through and individual income tax rates, ninth highest in overall state and local taxes per capita and second highest in unemployment tax.
Along with the state’s high taxes, a tight labor market is posing a significant problem statewide. Sixty-nine percent of employers in 2018 – versus 18 percent in 2010 – cited the ability to find workers as a key concern through the Minnesota Chamber’s Grow Minnesota Partnership. Job vacancies exceed the number of job-seekers in the state. Although 2017 was the first year since 2001 that Minnesota had more people moving into the state, the impending labor shortage – expected to hit 239,000 by 2022 – makes it more critical that Minnesota keep and attract skilled workers, work to get people back into the labor market and prepare students for jobs of the future. Minnesota remains in the middle of the pack for overall cost of living, but shortages in child care and workforce housing are issues that impact our ability to attract people.
The many newly elected officials on deck as the Minnesota Legislature soon convenes will definitely face some challenges. To ensure Minnesota stays competitive and moves in the right direction in these business benchmark rankings, our officials need to enact pro-growth reforms to reduce taxes on both individuals and businesses so that people want to operate businesses here.
Protecting the rights of employers to develop wage and benefit packages that best suit the individual needs of companies and employees needs to be a priority, as does ensuring affordable, quality health care by limiting government’s role and enhancing the ability of private employers to provide insurance to employees and ensuring that public health programs are sustainable. Private-sector workforce efforts should be supported to help employers attract and retain skilled workers.
There are some major hurdles to overcome, but they can be accomplished. If they aren’t, Minnesota stands to lose those businesses that currently put us in the spotlight as an innovation state.
The Alexandria Lakes Area Chamber of Commerce joins more than 40 other local chambers and the Minnesota Chamber of Commerce to unify around a common advocacy agenda for Minnesota businesses statewide. This collective voice, representing tens of thousands of businesses across the state, amplifies our members’ priorities with state policy leaders.