Minnesota NFIB: State’s Near-Bottom Ranking Not Surprising

Date: April 21, 2014

St. Paul (April 21, 2014) – The state’s major small business group today warned lawmakers that Minnesota’s near-bottom ranking in a national economic index could still get worse because of their recent deal to increase the minimum wage.

“Minnesota ranks in the bottom half of all states in 10 of the 15 categories and we’re in the bottom five for most of our state taxes,” said Mike Hickey, State Director for the National Federation of Independent Business (NFIB).  “The only category for which we received any credit for was the minimum wage but now that is gone due to the dramatic increase that just passed and was signed into law.”

The American Legislative Exchange Council last week released its annual Rich States-Poor States Economic Outlook Index, which ranks the states based on taxes, regulations, labor laws and other factors.  Minnesota this year remained at 46, just ahead of New York, Vermont, California and Illinois.  But the 2014 ranking doesn’t reflect a recent deal in St. Paul to raise the minimum wage from $7.25 per hour to $9.50, a 31 percent increase and another blow to Minnesota small businesses.

“We’re competing for the wrong prize and next year we may win,” said Hickey.  “We shouldn’t be competing with the most anti-business states in America to see who can create the most difficult environment.  We should be competing with states in our region like Michigan, Indiana, Wisconsin and Ohio that are trying to attract new business investors and grow jobs.”

“Last year the majority party and Governor Dayton pushed through a massive tax increase that was very unpopular and then quickly had misgivings about it and rushed a bill through the legislature this year that repealed key parts of it which we applauded” said Hickey.  However, they just took another step backward by passing a dramatic increase in the minimum wage.

“We won’t be competitive as long as we have the highest taxes and the highest minimum wage in the region,” said Hickey.  “If we want employers to stay here and locate here then we have to give them a reason.  So far we’ve been giving them more reasons to avoid Minnesota.”

View the 2014 Rich States-Poor States report here.  For more information about NFIB, please visit www.nfib.com.



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