Minneapolis is at an inflection point. To resuscitate this city, residents, elected officials, and business leaders must reckon with what the numbers are telling us.
The Jobs Report
Job seekers and stock traders alike watch the federal jobs report. On Friday, April 3, the latest report was released and there are several items that should concern anyone invested in the Twin Cities. Axios reported that we lost 2,000 jobs in January, expected, given the immigration tactics of the federal government. The Sahan Journal reported that 1,700 of the approximately 4,000 arrested during Operation Metro Surge have been deported. Unless there is a new influx of people to the area, these jobs will either disappear or remain unfilled.
For the first time since May 2007, Minnesota’s unemployment rate is now higher than the national average, 4.4% compared to the national figure of 4.3%. The local picture is even more concerning. In January, the public sector added 1,000 jobs while the private sector lost 900. In other words, the jobs paid with tax dollars increased while the jobs that generate tax revenue decreased. This trend is compounded by a sobering finding reported by David Schultz in the Minneapolis Times:
Between 2016 and 2026, the commercial and industrial estimated market value of property in Minneapolis, the assessed value of office buildings, retail centers, hotels, and industrial facilities that anchors a large share of the city’s tax base, fell in inflation-adjusted terms from $13.1 billion to an estimated $9.4 billion. That is a real-dollar decline of roughly 28 percent over a decade.
The taxes needed to support city services are quietly shifting from commercial real estate to homeowners. Both the rotation from private to public sector jobs and the erosion of commercial tax revenue are significant warning signs that the financial house is far from in order.
Shoring Up the Foundation
When we say math is nonpartisan, we mean it, neither party’s track record on fiscal discipline is clean. Government spending more than it collects in taxes generates debt. That is true whether budgets are passed by Republicans or Democrats.
In Minnesota and Minneapolis, we have DFL representation. If government grows while the tax base shrinks, the result is deficit spending. There are two ways to avoid this: reduce what government spends, or increase tax revenue. Combining both would have a multiplier effect. New revenue tools, like the proposed social media tax from Gov. Walz, could play a role. But new revenue alone cannot carry the load if the private sector continues to contract.
Residents want rental assistance, homeless services, education, disability care, transportation, parks, public safety, and a solvent Hennepin Healthcare. These are not unreasonable asks, but they require a tax base capable of supporting them. That tax base depends on a thriving private sector, and right now that sector is shrinking.
To build confidence in Minneapolis, leaders must at least acknowledge the importance of the economy, but it seems a distant priority. Any organization or politician that speaks up for businesses in the city risks being labeled a Republican, their reputation attacked in a toxic wasteland of social media. That chilling effect is itself an economic problem.
For Minneapolis to thrive again, we need all stakeholders focused on jobs, jobs, and more jobs. Those come when the math works in Minneapolis's favor, when businesses can look at this city and conclude, without hesitation, that the opportunity here outweighs the risk. As tempting as it may be to engage in international affairs, we must remain focused on our own backyard and rebuilding the foundational elements that help everyone.
Rebuilding Together
Operation Metro Surge unleashed urban warfare in our streets. The bravery, caring, and mutual aid networks residents demonstrated to assist those in need have inspired many around the world. We recognize that while enforcement has slowed, many remain in jeopardy and relief efforts are ongoing. But we must begin to rebuild. We will have to prioritize and work together on complicated budgets even when we disagree. Our health care, education, and safety net programs are strained to the point of breaking.
Having to move your family because you cannot find a job is a trauma that hurts families and weakens the social fabric. Over and over again, we must be asking: How do we attract businesses here? What incentives can we create to bring high-paying private sector jobs back to Minneapolis?
We cannot keep adding public sector jobs while losing private sector ones. The math doesn’t add up. It never has. Saying yes to Minneapolis is itself an act of confidence. And right now, that confidence is exactly what this city needs most.
Thank you for reading, and for caring about this city.
