WATCH the full presentation.

‍On August 19, Greater MSP hosted a webinar examining the root causes behind the region's slowing economic growth. While the Twin Cities ranks high on quality of life, job growth is slowing, unemployment is rising, and household income growth lags the nation. Minnesota has kept pace with national growth in absolute terms, but the gap has widened steadily over the past decade — enough that the median family income here would be roughly $9,000 higher had the region kept pace.

Presenters pointed to four intertwined causes: Population, Industry Trends, Structural Inequities, and Policy Decisions.

Population. The region is seeing its slowest population growth since the 1980s, alongside a tight labor market. Net migration has turned positive recently, but followed a decade of losses, with residents moving to the coasts and Mountain West. Retirements also surged during the pandemic.

Industry trends. The region is adding jobs more slowly than peer metro regions, particularly in high-wage sectors (3% growth versus 10% among the top 50 regions). Legacy industries — corporate headquarters, health and medical insurance — are underperforming, while low-wage sectors, such as services for elderly & disabled, retirement continuing care services, and state government are outpacing expectations.

Structural inequities. Research from McKinsey & Company and the Minneapolis Federal Reserve Bank underscores the region's racial wealth gap, including a Black-white homeownership gap that is unusually wide by national standards. Communities of color now make up roughly a third of the population in the 7-county metro area and are driving its growth (16.8% in 2000 vs. 33.6% in 2025) — meaning barriers that hold back BIPOC entrepreneurs increasingly slow the whole economy. Building a more inclusive economy is central to regional growth.

Policy decisions. Businesses weigh factors like permitting speed, tax environment, operating costs, and infrastructure. Minnesota ranks 44th nationally across all tax categories and is not cost-competitive on construction — perceptions that make it harder to attract investment.

Greater MSP outlined strategies underway to address these factors: build industries of the future (med tech, clean industry, next-generation food and agriculture, deep tech), train workers for those jobs, advance inclusive growth, leverage AI, and modernize the state's role as researcher, co-investor, and regulator.

WATCH the full presentation.

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