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PeakTrader:

There may be some variation of industries between the two states, where some industries have grown faster and some slower.

Also, it seems, Minnesota has a more educated population and higher per capita income (about $6,000 a year more than Wisconsin).

America’s Best (and Worst) Educated States
October 15, 2012

“Nearly one in three Minnesota adults aged 25 or older has a bachelor’s degree or higher, the 10th-highest percentage in the country.

Just 4.7% of adults had started — but not completed — high school, compared to the 8.1% of adults who fell into that category nationally.

Just 8% of Minnesotans 25 or older do not have a high school diploma, compared to the 14.1% nationwide.

However, among states with the most college graduates, Minnesota has fewer adults who go on to the next level of education. Only 10.5% of adults have graduate or professional degrees, the 17th highest nationwide.”

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In the link below, that shows a map of state tax revenue growth, Minnesota and Wisconsin are mentioned:

• Minnesota’s tax revenue first surpassed its 2008 peak in 2011 and was 20.6 percent higher by the end of 2013. After raising taxes on high-income earners that year, the state trimmed taxes during the 2014 legislative session in response to a predicted surplus.

• Of the five states where tax revenue dipped the least after the recession—Arkansas (-4.0 percent), Iowa (-6.5), Wisconsin (-6.7), South Dakota (-7.4), and Kentucky (-7.4)—only Kentucky’s tax collections had not fully rebounded by the end of 2013, after adjusting for inflation.

http://www.pewstates.org/research/analysis/state-tax-revenue-grows-but-a-full-recovery-eludes-26-states-85899545362

Is it possible Wisconsin actually had a milder recession and therefore a slower recovery?

For example, Minnesota had a more severe downturn in home prices and a stronger recovery than Wisconsin:

http://research.stlouisfed.org/fred2/series/MNSTHPI

http://research.stlouisfed.org/fred2/series/WISTHPI

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Wisconsin economy stuck in old-growth industries
June 17, 2013

http://www.jsonline.com/business/wisconsin-economy-stuck-in-old-growth-industries-b9934100z1-211923141.html

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PeakTrader:

Minnesota may have a more cyclical economy.

And, GSP may be a poor measure of living standards. What’s the difference in living standards?

The mix of GSP may vary substantially between states, e.g. some states have more government.

Anyway, I know, from working in California, if I worked this hard in Colorado, I’d be living much better.

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If I was born and raised in Kansas, would my goal be to attend the University of Kansas and work in Wichita?

Maybe, it would be to attend CU-Boulder, hang out with the affluent, get a job at Denver’s “Wall Street of the West,” or Colorado’s Silicon Valley: The Denver Tech Center, or start a business, where people earn more than a Social Security check?

Paul Krugman on his Nobel Prize paper: “Today, 60 million people live along a narrow stretch of the East Coast. Those 60 million people aren’t there because of the scenery; each of them is there because the other 60 million people are also there.”

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Why did people wait so long, until the early 1990s, to escape the high cost of living, high tax rates, fees, fines, fares, tolls, etc., excessive regulations, and poor government services in California before moving to Colorado, where in the early 1990s, near Denver, a new four-bedroom and three bath house, on a big lot, in a new neighborhood, cost less than $100,000, renting a nice large one-bedroom apartment, in a nice neighborhood, was less than $300 a month, and everything else was either cheaper or much cheaper?

Because as more people bailed-out of California and moved to Colorado, that caused more people in California to move to Colorado.

A “snowball effect” never got rolling in Kansas, like in the “Sunbelt,” Colorado, and Washington state.

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There may be a “brain drain” in places like Kansas and rural areas.

If you’re a good student, you may want to attend a better university, and may end up working in another state, or a larger metro area, that’s more diversified.

So, Kansas may not retain or attract much talent from the rest of the country.

Of course, wealthy and high-income people in California may not be struggling too much, along with people who bought a house long ago that’s now paid-off, or has lots of equity.

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If the agricultural and aircraft industries are in deep depressions, from drought and weak national & global demand, that affects other parts of the economy, e.g. consumer goods & services and supply chains, through a multiplier effect.

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Kansas had a more shallow recession and a slower recovery.

The mix of GDP in the recovery may be an improvement, in raising living standards.

We neither know how much of an effect Kansas government policies had on the recovery nor how much factors beyond the control of state government had.

For some commentators to use “failure” is jumping to a conclusion. Suboptimal is a better conclusion.

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XO, why would you expect stronger recoveries from more shallow recessions?

And, ignore other factors beyond government, e.g. drought in agriculture or demand in aircraft?

Moreover, GDP is not an accurate measure of living standards.

Kansas is closer to full employment than the U.S.:

http://research.stlouisfed.org/fred2/series/KSUR

http://research.stlouisfed.org/fred2/series/UNRATE

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Bruce Hall:

Look at the “bigger picture” (i.e. see chart by Bruce Hall in link)

http://econbrowser.com/archives/2014/08/wisconsin-employment-under-walker#comments

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PeakTrader:

The Wisconsin economy seems to be performing relatively well in this national depression. It not only has a better unemployment rate than the national average, 5.8% vs 6.2%, it also has a better labor force participation rate, 67.8% vs 62.9%.

And, Wisconsin went from budget deficits to a budget surplus recently.

Tough choices are needed, e.g. closing the disparity between overpaid government and union workers, and underpaid non-government and non-union workers.

I’d like to see Wisconsin use the budget surplus to cut taxes for all workers, raise the minimum wage, and get more bang for the government buck.

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Government spending cuts, with smaller tax cuts, causing a fiscal surplus won’t stimulate growth.

However, Wisconsin has slow growth old industries and doesn’t seem to be a top destination for Information and Biotech firms.

Moreover, much of the state’s talent may be moving to other states, where there are more opportunities.

Nonetheless, I heard, Wisconsin cheese is doing very well

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Rich states become richer, to a large extent, because of labor mobility.

It becomes a virtuous cycle.

It’s more accurate to look at neighborhoods, for example.

Who are the rich, the middle class, and the poor?

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Map of recovery for each state:

http://www.bloomberg.com/infographics/2014-09-30/uneven-jobs-recover-instates-post-recession.html

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PeakTrader:

There are differences between Minnesota and Wisconsin, particularly at the city and county levels. For example:

Twin Cities jobless rate — at 4% — is the lowest in U.S.
July 2, 2014

The Twin Cities boasts the best unemployment rate of any large metropolitan area in the United States…the health care economy never slacked off during the recession and then has continued to boom,” said Louis Johnston, an economist at the College of St. Benedict and St. John’s University. “We have a big footprint in health care, both with medical devices and indirectly with UnitedHealth.”

Johnston also said the oil boom in North Dakota has helped the Twin Cities job market in subtle ways that aren’t felt in other major cities.“We’re the closest metropolitan area to the Bakken, and I think that’s helped us a lot, especially in finance, insurance and logistics,” he said.

A boom of construction projects in the Minneapolis-St. Paul-Bloomington area, as the government defines it, has added nearly 10,000 jobs in the past 12 months.

The state, which has recouped all of the jobs lost during the recession, has the third-highest ranking of labor force participation in the nation. Some 70.6 percent of workers are in the job force.

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Milwaukee ranked fourth poorest city in nation
October 5, 2010

In a report released last week by the U.S. Census Bureau, Milwaukee ranked fourth on a list of poorest cities in the United States in 2009. Only Detroit, with a 36.4 percent poverty rate, Cleveland with 35 percent and Buffalo with 28.8 percent ranked higher (compared to 27 percent for Milwaukeeans) for cities with populations of more than 250,000, according to the U.S. Census American Community Survey.

This poverty ranking also provides an additional campaigning point for both gubernatorial candidates, Milwaukee County Executive Scott Walker (R) and Milwaukee Mayor Tom Barrett (D), as they prepare for elections this November.

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This 1995-00 study shows Wisconsin had a brain drain with net migration.

It doesn’t say who moved in, but younger and educated people moved out.

http://www.uiowa.edu/~ican/Papers%202006/braindrain122806.pdf

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All Walker has to do is create new industries, to replace the old “Rust Belt” industries, and reverse the vicious cycle, turning it into a virtuous cycle instead, through a fast growing metropolis.

Very simple.

Then other basket case cities can take note and there will be an overabundance of high-tech/high-paying jobs

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Kansas population growth may have been lower than the national average during the Great Depression too, as people from Kansas packed-up and moved, e.g. to California.

Many young people in Kansas may want to move to a bigger metropolis, or megalopolis, rather than to Wichita.

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