A blog written by Hunter Jordan, Advocacy Intern at Greater Mankato Growth.

Minnesota’s economy, though strong, is slowing in growth. The 2026 Business Benchmarks report from Minnesota’s Chamber of Commerce points this out across multiple measures, and here are the key takeaways: 

1.  Minnesota ranks 6th in the country for labor force participation with nearly 80% of the working-age population being employed; however, our state’s labor force growth has slowed to just 0.2% annually due to the limited room for expansion left from the high participation rate. As a result, Minnesota’s labor force growth is expected to plateau in coming years.
2. Despite being ranked among the states with the highest adult population with a bachelor’s degree or higher, Minnesota’s high school math and reading scores are dropping sharply, which stands as a warning sign regarding the next generation.
3. Minnesota ranks as one of the best states to live in, yet we continue to see an annual net loss of migration in the state, ranking 41st among states. Adding to this figure is the state’s annual net loss of 8,300 college-age students. This means that Minnesota is struggling to attract people from outside the state.
4. Our state produces the 5th highest number of patents per capita among all states, which demonstrates a good amount of new business creation. However, patent growth in the state is dramatically low, ranking 47th in the nation.
5. The same trend can be seen in Minnesota’s Research and Development (R&D), which is ranked 16th in the nation, yet Minnesota’s R&D growth ranks 45th. 

Through each of these pieces, it is clear that Minnesota’s economy is strong, but the room for growth appears to be minimal. Our state holds many key parts for a powerful economy, yet those parts must also create growth in order to stay as strong as they are and have been. 

Minnesota’s labor force growth is projected to flatten in the coming years due to net migration loss and an aging population. This makes it imperative that the state invests in things like innovation, business growth, and workforce participation.   

Though these facts are grim and indicate a concerning future for Minnesota, this is not something that is inevitable. Each problem has the ability to be fixed or limited. It is crucial that state legislators push for legislation that promotes growth further than just the status quo within our state. 

Among the reparable issues are the challenges within Minnesota’s business climate. High tax rates make it difficult for businesses to grow at an adequate pace and worsen Minnesota’s ability to compete with other states. This is compounded by labor mandates that put large burdens on companies. Legislators should work with businesses in the state to find a healthy medium within these areas. Additionally, the burden that labor mandates put on businesses needs to be lowered through the state taking more involvement or lessening the scope of the mandates.  

Minnesota’s struggle to retain college-age students is another variable in this equation. A continuation of this trend could lead to an extended loss of innovation and valuable labor. This contributes to challenges in attracting labor in the state and the plateau in our labor force growth. Finding a way to retain college students is crucial to aiding Minnesota’s economic growth. Addressing challenges in the business climate is a plausible solution, as faster growing success in companies could allow industries to provide more job opportunities, which is a strong attraction factor for college-age individuals. Proper legislation to promote student retention and attraction in the state is a must, as legislators should work to treat it as such. 

Another remaining factor is the rise in Minnesota’s annual cost of living. The cost of living within the state is rising and acts as a possible contributor to our state’s net loss in student retention. A gradual rise in cost of living is typical for states; however, paired with the stagnation of Minnesota’s GDP per capita, the chance for individual prosperity decreases. While Minnesota’s GDP per capita is still growing at 1% annually, compared to a 1.8% national average, the number poses a concern. Though a 0.8% difference may look small, this means the average state in the U.S. is growing its per capita GDP 80% faster than Minnesota is. This leads to individuals not being able to keep up with Minnesota’s rising cost of living. Policies that promote not just business success, but individual success, are a necessity for our state’s lawmakers. 

All of these policies are directly promoted and advocated by Greater Mankato Growth’s agenda. Each of these policies is needed to promote business and individual growth within Minnesota. With proper actions, our state can make up lost ground and further boost economic growth.