Megatrends: 10 trends that will shape Minnesota’s future
Policymakers need to prepare
A mural on Hennepin Avenue South. Photo by Hannah Black/Minnesota Reformer.
American politics, political change and public policy often are the result of individual choices, but can also be the product of the tectonic shifts that come from significant economic, social or demographic change. The same is true in Minnesota.
Here are some of the megatrends that are going to impact Minnesota politics and policy for the next decade or two:
Slowing population growth
Minnesota’s population continues to grow according to the most recent U.S. Census, but it is doing so at a much lower rate than many states across the country, including those in the South and Southwest. This is due to declining birthrates and slowing net influx of migration from which Minnesota has benefited over the past few decades, especially from Africa and Southeast Asia.
At some point the slowing population growth will impact the state politically. The last time Minnesota lost a congressional seat was after the 1960 Census. Since then we have held on to eight seats. In 2020 by 89 people we held on to the eighth seat.
If current trends continue, Minnesota will likely lose a congressional seat in 2030.
Losing the seat means less influence in Congress. It is one less electoral vote in a presidential election. It is less federal aid. It also means a configuration of eight congressional seats into seven, with rural Minnesota likely losing a share of its political voice.
Minnesota is getting older. According to the U.S. Census. Bureau, in 2010 the median age of a Minnesotan was 37.3 years old.
In 2020 it was 38.1, the same as the median age for the U.S. overall.
For whites, the median age was 42; for people of color, several years younger. Greater Minnesota is generally older than the metro region.
Politically this is significant because as Minnesota ages, the demand for services — such as medical care for older people — will increase, and this will occupy a larger percentage of the state budget. This will compete against other big-ticket items such as K-12 and higher education spending. Additionally, with rural and older voters more likely to vote for Republicans, this leads to a potential shrinking of the political base for that party as its voters perish.
Slow economic growth
While the Minnesota economy has one of the lowest unemployment rates in the nation and among the highest labor force participation rates, the state’s economic growth is thirty-fifth over the past three years. In many ways the Minnesota economy has underperformed compared to many other states, with significant regional and racial disparities. With low unemployment and high labor force participation, it will be difficult to squeeze out additional economic growth in the future by encouraging increased workforce employment.
It also means that companies seeking to grow face potential labor shortages in the future, especially as the state ages.
There are sixteen Fortune 500 companies in Minnesota, down from nineteen a decade ago as a result of mergers and acquisitions. Larger corporate headquartered businesses generally have better paying jobs than smaller ones. Minnesota also lags the nation when it comes to new business formation.
Combine these trends, and a future Minnesota might not be the economic powerhouse it has appeared to be for the past few years. So much of current public policy, especially at the state level, rests upon corporate and income taxes. Regardless of any short-term recession, longer term economic trends raise concerns about Minnesota tax revenues.
Rural depopulation and the farmerless farms
Rural Minnesota has been depopulating for years. Loss of jobs and economic opportunities are driving it. During the pandemic, rural areas enjoyed a slight population gain, but longer term this trend probably will not continue.
There are at least two reasons:
One, the era of the farmerless farm is upon us. The same technology that will bring us the driverless car is producing tractors and other machinery that will dramatically reduce the number of jobs needed on a farm.
Two, an aging population, especially in the rural areas, will contribute to a population drain.
The hollowing out of greater Minnesota will affect its representation. Fewer people in these areas means fewer state legislative seats and less representation in Congress, and larger congressional districts. Moreover, given that of the 87 counties in Minnesota Democrats are winning barely twelve of them, the depopulation of the 75 could exacerbate the political alignment in the state to the further advantage of the DFL
However: urban exodus and suburban growth
The story of America and Minnesota is one that begins rural.
Then, beginning after the Civil War until the 1960s it was the urbanization of the U.S. and Minnesota, and then urban decline and the rise of the suburbs.
Minneapolis and Saint Paul lost population from the 1960s until the 1990s, and since then people flocked back to the cities. That appears to be ending. Census Bureau estimates show population declines for the two major cities, despite the fact that the Met Council claims growth.
There are perhaps many reasons for this exodus. The pandemic no doubt is a factor. But also Minnesotans in search of homes and apartments may be leaving the cities because they have among the worst shortages and prices in the nation.
There are multiple implications here.
Fewer people means less Twin Cities political clout. Population declines raise questions about the financial stability of their schools and tax bases, especially as remote and hybrid work have sharply reduced demand for downtown office space.
Ramsey and Hennepin County Exodus
Not only are Saint Paul and Minneapolis losing population, but their two counties are also losing population. Reasons for these losses are probably connected to the same factors driving population stagnation in the cities: the pandemic, remote work and housing costs.
Hennepin and Ramsey County — along with Dakota, Olmsted and Washington — are the big five counties that make up the majority of the DFL vote. If the two largest counties continue to lose people — admittedly, a big if — that could impact political representation in the state at both the federal and state level.
Depending on where these individuals are moving to and what their political views are, this could have implications across the state. Are the people leaving the two big urban counties Democrats who will make their new homes more Democratic? Or are Republicans fleeing, which could make their new home counties more Republican?
Declining college enrollment
Minnesota’s community colleges, MNSCU, and the University of Minnesota are seeing significant enrollment declines, and many private colleges and universities are facing similar challenge as rising costs and declining birth rates are shrinking the college-age population.
Declining college enrollment potentially impacts Democrats, who have heavy relied on young voters in recent years.
And as college enrollment declines, it will force tough budget choices for the state, potentially requiring closure or consolidation of schools.
Similarly, many smaller private colleges will also continue to face enrollment and revenue challenges. How many of them can survive into the future as the enrollment cliff approaches over the next few years.
Minnesota’s economy has relied on a big pool of educated workers, but fewer educated young people to fill jobs would worsen the labor shortage contribute to a slowing state economy.
Decline of white working class
The percentage of whites who have at least a four-year college degree is 41%. The white working class once voted for Democrats, but now are moving to the Republican Party, and especially Donald Trump. But white working class as a percentage of the national and Minnesota population continues to decline. This means an erosion of the new Republican Party base.
The United States is within two decades of becoming a majority non-white nation. Minnesota too is rapidly diversifying, with cities such as Saint Paul and Brooklyn Park already a majority non-white.
By 2038, 70% the population will be non-white; over the next few years the majority of births will be persons of color.
Given the pronounced racial disparities in the state when it comes to educational attainment, income, home ownership and health, will Minnesota become more stratified?
If the racial disparities are not ameliorated, what impact does this have on college enrollment, employment and economic growth?
Politically, what will this mean for the two major parties in the state, where at present the DFL enjoys a huge advantage among people of color?
Climate change will warm Minnesota faster than any other of the lower 48 states. Minnesota is in store for hotter and drier summers, more droughts, and more frequent violent storms.
Climate change will impact agriculture, which remains a major economic force in the state. It could also affect housing and road and bridge construction.
On the bright side, some are speculating that Minnesota will become a climate haven for people escaping extreme weather events on the coasts and water shortages in the American West.
These 10 megatrends are longer term structural forces that will both impact Minnesota politically and force or constrain political and policy choices.
They are also often interconnected and impact one another.
What’s not clear is whether and how policymakers are considering and planning for these tectonic shifts, before it’s too late.
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