PUBLISHERS NOTEBOOK: State's economy won't break
if we don't give up on education
Tuesday, July 02, 2013 7:46 AM
Minnesota's state economist isn't one to capture the attention of most people. That's probably the way Tom Stinson, who has served in that capacity for 26 years until last week when he retired, likes it.
That doesn't mean his views are unimportant. Although I never met the man, I was familiar with his work when he and Tom Gillaspy, who has served since 1979 as state demographer, another office that doesn't raise a lot of attention, were supposed to give a presentation to the Minnesota Newspaper Association during its convention two years ago.
An urgent matter in St. Paul kept Stinson from attending, but Gillaspy presented their joint project at our convention. Their conclusion was that the state was entering a period called "the new normal," a description they didn't really like because at the time it was already being overused, but one that accurately described the future that Minnesota was facing.
Although the details are complex, as I noted in a 2012 column, they warned that Minnesota will not be returning to the economy as it was before the recession hit in 2008.
For one thing, 2008 was also the first year that baby boomers turned 62. That is the first showing of a trend that has been building for decades in which our population is aging. By 2020, there will be more residents age 65 or older than there will be children 5 to 17.
The two pointed out that this is shifting state spending even more toward long-term care issues at the expense of K-12 education and other areas.
The beauty in their presentation is that they didn't wallow in despair or place blame or even take a side in the cut services vs. raise revenue debate. Instead, they outlined the process in moving from the old to the new, which includes denial then anger at first. Their solution was doing things differently - redesigning government, which is easier said than done.
The reason memories of this presentation came back to me isn't just because Stinson is retiring. Over the weekend, I read an "exit interview" by Lori Sturdevant of the Star Tribune.
It reminded me of how balanced this man can be as he offers low key advice to problems that generate lots of noise from politicians.
He told Sturdevant that Minnesota's economy isn't broken - in fact it's stronger than you might think - and that it shouldn't be fixed without knowing the source of its success.
He isn't saying that Minnesota can't do better, but with the relatively strong position it is in now, state officials have the luxury of making careful, considered decisions.
As Gillaspy noted in the presentation to our newspaper association, the trends show that Minnesota is going to have to do with fewer workers as we move forward. We are going to have to make the best use of the workforce that we have.
That means two things. One is encouraging a better situation for the mature worker, which he says is often quite productive. For one thing, "they show up to work," he said.
The other factor is employee productivity. Minnesota's advantage isn't that we had bigger, faster machines; it has always been the productivity of the worker, he said.
Productivity and education are closely tied. We need to make sure that as many youth as possible have the credentials to participate in the modern economy at a healthy level, he said.
He worries about the racial educational gap, since minorities are the fastest growing population in Minnesota and they need to be a part of the workforce, and income inequality, not between the wealthy and the rest of us, but between the middle class and lower class because a large impoverished population creates problems for those people and the state as a whole.
One surprising thing he isn't worried about is taxes. He points out that Minnesota has never been a low-tax state and that's not our competitive advantage. Our advantage is the quality of our workforce.
"In order to keep that so, you have to have public-sector resources to make human-capital investments. I've seen that bright 20- and 30-year-olds don't make location decisions based on tax rates. They think about the quality of life and the availability of amenities," he told Sturdevant.
These observations from state officials are refreshing because so often we hear doom and gloom scenarios tied to a particular agenda. Stinson and Gillaspy, both who have served the state for decades, can give a measured view that takes a longer look, free of partisanship, for the state.
Even more refreshing is that they can acknowledge the challenges, but also offer an optimistic view going forward.
As Stinson concluded his interview with Sturdevant, "I have a lot of confidence that we'll figure this out. This state still has a great commitment to education and workforce development. We'll figure out how to use those tools to keep our workforce more productive than the rest of the country. As long as we don't give up on education, we'll continue to be successful."