As Minnesota's economic recovery zig-zags, Walz taps a council to drive growth

Gov. Tim Walz has tapped 15 business and nonprofit leaders to form a Council on Economic Expansion to address the labor shortage in Minnesota and ensure that the state's economic recovery is fair.

At a news conference in downtown St. Paul on Tuesday, Walz acknowledged the council's areas of focus are fairly broad. But he said it would recommend solutions to challenges that are slowing the state's recovery from the downturn caused by the COVID-19 pandemic.

He cited examples ranging from the school bus driver shortage to the retention of nurses who are burnt out after the last year and a half of the pandemic.

In addition, Walz said the state's economy is shifting in significant ways coming out of the pandemic. He wants the council to tackle the problem of mismatched skills in the labor market and to ensure Minnesotans of all races and backgrounds are included in the recovery.

Minnesota's unemployment rate is lower than the nation's but its jobs recovery has been uneven. The latest data showed that the state through July recovered 64% of the jobs it lost in the rapid downturn of spring 2020.

Meanwhile, it continues to have some of the worst economic racial disparities in the U.S. "How do we make sure that this expansion and the wealth creation we're seeing coming in the recovery benefits all?" Walz asked.

The council will have its first meeting on Wednesday and will meet weekly. It is being asked to come up with some initial recommendations by November ahead of the next legislative session. Walz said the group's work is likely to influence his next budget proposal.

Part of the group's charge is to look for ways to leverage remaining federal funds from the American Rescue Plan to further growth. Other recommendations could be a longer term ideas for businesses, nonprofits and the state.

The council will be co-chaired by Paul Williams, CEO of Project for Pride in Living in Minneapolis, and Jeff Ettinger, former CEO of Hormel Foods Inc. in Austin.

The other members, who will serve one-year terms, include Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, Bharti Wahi, executive director of Children's Defense Fund-Minnesota, and Penny Wheeler, CEO of Allina Health. It also includes leaders from labor and industry groups such as SEIU Healthcare Minnesota.

Williams noted that the pandemic has been particularly hard on people and communities of color.

"We see that day and day out, low-income folks are really struggling to make ends meet even in the midst of a strong economy recovery," he said.

Steve Grove, commissioner of the Minnesota Department of Employment and Economic Development, who will work closely with the council, said it's an unprecedented moment for the state.

"With this huge influx of federal dollars coming into the state and the whole host of challenges we're going to find in this next chapter of our economy, the decisions that leaders in Minnesota make over the next six to eight months are really going to affect Minnesotans for generations to come," he said. "We really feel the urgency of this moment."