A clear difference, with two different paths taken. Which one was more successful? Minnesota, obviously.
The High Road Wins
The High Road Wins
^ Continued at the link.Minnesota and Wisconsin offer something close to a laboratory experiment in competing economic policies. Since the 2010 elections of Democratic Governor Mark Dayton in Minnesota and Republican Governor Scott Walker in Wisconsin, these neighboring states with similar populations and economies have pursued radically different strategies. Dayton embraces good government, progressive taxation, and high-wage policies, while Walker has chosen shrunken government, fiscal austerity, and a war on labor.
Minnesota’s economy has outpaced Wisconsin’s. These results suggest that Walker, in his expected run for president, may have difficulty promoting a “Wisconsin Miracle” as a model for national policy. This story also offers a cautionary tale to newly elected conservative governors like Bruce Rauner in nearby Illinois: An attack on government and workers’ wages is not a prescription either for prosperity or for political success.
While the “experiment” is not perfect—there are minor differences in urban and industrial structure between the two states—it is clear that imposing fiscal austerity and undermining residents’ standards of living are not successful prescriptions for economic prosperity.
Walker’s initial slogan, “Wisconsin Is Open for Business,” conveys his broad view that government should be smaller, deficits are categorically bad, the private sector is the only wealth and job creator, lowering taxes will automatically create jobs, and public-sector employees (and by association, many other workers) are too highly paid, which in turn hurts the state’s economic competitiveness. Walker promised to reduce Wisconsin’s deficit, create 250,000 new jobs in his first term, and get government out of the way of private-sector growth. His policies include reducing regulation generally and fast-tracking permitting for new environmentally problematic mining in the state. Walker also proposes to increase tuition at the state university by 13 percent and to change its mission from broadly educating the citizenry to serving the labor-market needs of business.
Dayton’s gubernatorial agenda has been solidly liberal. As he did while serving as U.S. senator from 2001 to 2007, Dayton embraces an activist government role, believing that well-run programs supporting education, infrastructure, fair and healthy workplaces, health care, progressive taxation, and a social safety net not only benefit Minnesota businesses and families but nurture economic prosperity.
While Dayton supported a popular and successful campaign for a higher statewide minimum wage, Walker opposed any increase. Dayton supported the Affordable Care Act and developed a state exchange, while Walker refused an initial $38 million in federal funds to set up a Wisconsin exchange and $11 million to improve Medicaid enrollment, also rejecting federally funded expanded Medicare coverage for the state. (On health care alone, Dayton’s embrace of Obamacare has brought new federal dollars that are spent almost fully within the state, creating good-paying health-sector jobs.) On another front, Walker successfully fought teachers’ unions, while Dayton led an increase in teachers’ salaries paired with reductions in class size, which proved a stimulus to the Minnesota economy.
In sum, Minnesota’s policies on wages, health care, and unionization have improved the quality of life for large numbers of state residents. Outpacing Wisconsin, Minnesota’s jobs and pay have expanded, and health care and education have improved. Dayton’s progressive taxation has not scared off business, but has funded better public services, besting Walker’s fiscal strategy of regressive tax cuts and deficit reduction. It’s worth a closer look to see why this was the result.