When Democrat Mark Dayton took office as Governor of Minnesota in January 2011, his Republican predecessor had left him with a $6.2 billion budget deficit and unemployment at 7%. Gov. Dayton took the opposite path from Gov. Brownback in Kansas; and his success bookends a two-part, natural experiment in how to come out of an economic recession.
In contrast to Kansas's slashing taxes on the wealthy, and draconian spending cuts in government jobs and services to the people in Kansas, Minnesota Gov. Dayton raised state income taxes by 2% for those earning over $150,000, raised the minimum wage, and signed a state law guaranteeing equal pay for women.
The results? During Gov. Dayton's first term, new jobs brought the unemployment down to 3.6%, fifth lowest in the country, while the economy grew at the fifth fastest U.S. rate. Medium household incomes rose more than twice as much as the national average: US: 4.4%; MN: 9.5%.
And by the end of Dayton's first term, January 2015, the $6.2 billion deficit had flipped over to a $1 billion surplus, half of which he pledged to reinvest in education. Of course, Dayton didn't accomplish all this alone. During his first two years, he had to convince a Republican-controlled legislature to work with him.
More good things accomplished: Rather than try to suppress minority voting, as Kansas' Secretary of State has worked assiduously to do, Minnesota at the same time created an online voter registration system to make it easier.
Robert Gibson, whose reporting for the Huffington Post is the source for my information here, summed it up this way:
"The reason Gov. Dayton was able to radically transform Minnesota’s economy into one of the best in the nation is simple arithmetic. Raising taxes on those who can afford to pay more will turn a deficit into a surplus. Raising the minimum wage will increase the median income. And in a state where education is a budget priority and economic growth is one of the highest in the nation, it only makes sense that more businesses would stay.So now we have one state, Minnesota, that followed Democratic principles, with excellent results; and we have one state, Kansas, that followed Republican trickle-down principles, that was a dismal failure. Wisconsin under Scott Walker is a second state that did more or less what Kansas did, with similar disasterous results, especially in the effect on schools.
"It’s official — trickle-down economics is bunk. Minnesota has proven it once and for all. If you believe otherwise, you are wrong."
We have a clear choice. And a good lesson to keep in mind when choosing a president. It works at the national level too.
Ralph
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