Minnesota’s economy is at a crossroads and employers across the state are feeling the impact. The Economic Imperative for Growth is a new initiative to confront these challenges and restore our competitiveness by strengthening growth, workforce and migration.
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For generations, Minnesota’s private sector has powered a remarkable story of innovation, productivity and prosperity. Our diverse industries, global companies and highly skilled workforce have long-positioned us among the top states for quality of life and economic strength. But we cannot rely on an idea of our success from 50 years ago to carry us into the future.
The data are clear: Minnesota’s economy is no longer keeping pace with the nation. Our state has fallen behind on nearly every measure of growth. From 2019 to 2024, Minnesota ranked 33rd in GDP growth, 39th in job growth, 40th in labor force growth and 46th in growth of (real median) household income. Meanwhile, more people are leaving our state than moving here.
These trendlines matter. They affect the competitiveness of our employers, the livelihoods of our employees and the vitality of our communities. A growing economy isn’t just about statistics – it’s about opportunity. Growth fuels higher wages, stronger businesses and the resources that sustain quality of life for everyone who calls Minnesota home.
That is why the Minnesota Chamber is leading a statewide effort around Minnesota’s economic imperative for growth – a call to action for employers and policymakers to confront the barriers holding us back and work together to restore growth and competitiveness.
At the heart of this effort there are three key measurements that define our state’s path forward:
For decades, Minnesota outperformed the nation in output per person – a measure that reflects both productivity and standard of living. But that advantage has eroded. Over the past decade, Minnesota’s per capita GDP grew at just 1.0% annually, compared to 1.8% nationally. Why does this matter? Per capita growth is the most direct measure of prosperity. It reflects how much value we’re creating for every person in the economy – driving wages, consumption and investment. Slower growth means declining competitiveness and reduced opportunity.
Minnesota’s workforce has long been one of our greatest strengths: highly educated, productive and deeply committed. But it is shrinking relative to demand. The state’s labor force has grown by only 0.2% annually since 2019, and today there are nearly two job openings for every job seeker. This tight labor market not only constrains growth, but it limits production and weakens overall competitiveness. The causes are structural – an aging population, declining birth rates and slowing labor participation.
Perhaps the most pressing long-term challenge is Minnesota’s migration trend. For 20 of the past 24 years, more people have left our state than moved here. From 2020 to 2024, Minnesota ranked 41st in net domestic migration, losing nearly 48,000 residents to other states.
This is not inevitable. In the 1990s, Minnesota was a net attractor of people. Rising costs and regulatory burdens are moving those opportunities and people elsewhere.
Minnesota’s future is not predetermined. We still possess extraordinary strengths: world-class companies, a talented workforce and an enduring spirit of innovation. But we must look past our legacy of strength to what’s really holding us back today. The Minnesota Chamber of Commerce is committed to leading this effort – mobilizing the private sector, informing policymakers and Minnesotans with data, and driving practical solutions that restore our economic momentum.
Growth is the difference between opportunity and stagnation. Between retaining our next generation of talent or watching it leave. Between being a state that competes and one that falls behind.
This is Minnesota’s economic imperative for growth. The time to act is now.
What is it and why is it important?
Healthy economic growth rates propel prosperity and living standards. GDP per capita is the broadest and most common measurement of living standards correlated with wages and incomes, productivity, access to goods and services, and overall quality of life.
For business owners, this is the growth of your potential market. Customers have more spending power and businesses sell more goods and services. A growing GDP increases investor confidence, keeping capital flowing into companies and supporting startups. It also indicates that innovation and productivity is growing, essential drivers for increasing incomes and opportunities for employees. Further, growing the economic pie would alleviate the state’s near-term fiscal challenges. Faster economic growth would raise revenues without raising tax rates,
which are already higher than other states.
GDP growth in isolation doesn’t tell the whole story. The pace of growth matters in comparison to other states. If Minnesota’s GDP growth is slower than its peers and the national average, it indicates that incomes, investments and living standards are increasing faster in other states than in Minnesota.
What are the trends in Minnesota’s per capita economic output over time?
For decades, Minnesota outperformed much of the nation when it came to economic strength. Back in 2004, the state’s economy produced about 9% more value per person than the national average – ranking among the top 10 states in output.
But over the past decade, that edge has steadily slipped. From 2014 to 2024, Minnesota’s economy grew by about 1% per person per year, while the national average grew nearly twice as fast, at 1.8%. That may not sound like a dramatic difference, but over time it adds up, enough for the rest of the country to nearly catch up. By 2024, Minnesota’s per-person economic output was just barely above the U.S. average.
Output per person is closely tied to income. As the economy’s pace has slowed, Minnesotans’ income growth has slowed, too. Minnesotans earn slightly more than the national average now, but that advantage – once a point of pride – has faded year after year.
What drives GDP growth?
At its core, growth comes down to how much a state’s economy can produce with the available time and resources. The biggest factor is productivity – how much value workers and businesses create in each hour of work. Productivity reflects how well a state turns talent, innovation and investments into economic value. Minnesota has a lot of strengths in this area, but also serious challenges slowing momentum.
What is it and why is it important?
Growth in the labor force determines how fast employers can add jobs and increase production of goods and services. To business owners, it’s also a reflection of economic momentum, signaling when it’s time to plan expansions or investment.
Minnesota businesses have consistently reported challenges finding available workers over the past decade, making it harder for them to grow and expand in the state. The shortage of available talent has broad consequences, constraining growth in vital sectors such as housing construction, child care and health care services.
Growth alone isn’t enough; it matters how much Minnesota’s labor force grows relative to other states. Capital, talent and innovation are mobile, and businesses will gravitate to where both workforce and opportunity are expanding.
What are the trends in Minnesota’s labor force over time?
Minnesota’s labor force grew steadily for decades, expanding by about 1.7% per year from 1976 to 2000. Since then, growth has slowed dramatically, and the challenge has deepened in recent years. Between 2019 and 2024, the state only added 24,701 workers, an average increase of just 0.2% annually.
Nearly 90,000 people left the labor force in the first year of the pandemic, as retirements accelerated and many stepped away for other reasons. While the trend has improved since 2021 and Minnesota is again adding workers, the pace still falls short of meeting employer demand. As of 2025, there continued to be nearly two job openings for every one job seeker.
What impacts labor force growth and what are Minnesota’s opportunities to accelerate growth?
Labor force growth is influenced by a combination of growth in the number of working-age adults (population growth) and the share of the adults participating in the workforce (labor force participation rates). A combination of population growth and removing barriers for individuals on the economic sideline can help address workforce shortages.
What is it and why is it important?
Net domestic migration measures the number of U.S. residents moving to Minnesota compared to the number of Minnesotans moving to other states. Positive net domestic migration matters for two key reasons. First, it directly affects the size of Minnesota’s population and workforce. Second, it serves as a barometer of the state’s overall attractiveness – showing where people choose to live, work and build their futures.
People “vote with their feet.” When they choose to move from one state to another, they make a real-world judgment about where opportunity, affordability and quality of life are strongest. If they are moving away, it could suggest that they see better job prospects and a better cost of living elsewhere. Competitiveness factors – such as affordability – are likely to affect where people choose to move.
What are the trends in Minnesota’s net domestic migration?
While Minnesota attracted new residents throughout the 1990s, the trend has reversed in recent decades. The state has experienced negative net domestic migration in 20 of the past 24 years, with losses deepening in the early 2020s. Since 2001, nearly 123,000 more people have left Minnesota than moved in. Between 2020 and 2024 alone, the state saw a net loss of 47,930 residents to other parts of the country, ranking 41st among states. Encouragingly, those losses have begun to stabilize, with migration outflows moderating in 2023 and 2024.
According to several measurements, Minnesota’s taxes have grown faster than perceived value. For example, states’ tax competitiveness rankings were positively correlated with net domestic migration outcomes from 2020 to 2024, with migration flowing to lower tax states.
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