Proximity and history make comparisons of Wisconsin and Minnesota economies inevitable. Careful study of the two states shows contrasting industry mix and unusual success of the Minneapolis-St. Paul area as major factors in the two economies drifting apart. Alone among northern cities, Minnesota’s largest metropolitan area was among the top metro areas in job growth during 1969-2014.
Wisconsin and Minnesota gained statehood in the mid-1800s: Wisconsin in 1848 and Minnesota 10 years later. Residents of the two states claim similar ancestry, with those of German and Scandinavian heritage well represented. The list goes on: similar climates, a shared 300-mile border, and roughly the same population.
These similarities make interstate comparisons common. Of late, they have included discussion of short-term economic performance in the two states.
Such debate is popular with headline writers and politicians, but is often missing context, both historical and economic. How the states developed and diverged over the past century, and particularly over the past 50 years, has resulted in two states whose economic and geographical differences are as significant as their similarities.
Two factors stand out in this drifting apart. First, in the late 1960s and 1970s, Minnesota’s industry mix was better suited than Wisconsin’s to survive the punishing 1981-83 manufacturing recessions and the “new” economy that emerged. Second, the Minneapolis metropolitan area was positioned for economic growth unlike any other northern metro area, including Milwaukee, Wisconsin’s largest metro area. Herein lies much of the reason for Minnesota’s statewide growth.