Gov. Tim Walz 'asking our team to be bold' to attract workers to Minnesota

Minnesota's western neighbors frequently paste tourism ads of mountain goats or badlands across TV and smartphone screens, buses and billboards. For years, they've barely drawn more than a harrumph from state political leaders.

Not so today.

"Drives me mad when I see commercials from South Dakota," Gov. Tim Walz says. He wants to coax Minnesotans into talking more about life in Minnesota and has an advertising blitz of his own in mind.

"I'm going to run ads in Florida for teachers," Walz said in a recent conversation with the Star Tribune about the state's economy and policy choices.

"'Come here! Yeah, it's a little colder," he said, nodding at the window on a day of single-digit temperatures. "But we'll let you teach."

That shot at the Sunshine State's prohibition against teachers from discussing sexual orientation or gender identity appears emblematic of his desire to infuse quality-of-life arguments with a progressive edge.

"If you're going to move to Minnesota, you're going to get a high-quality education," Walz said. "If you're going to move to Minnesota, you're going to have access to the arts."

Nearly three years after the start of the pandemic, Minnesota's employers need people. The state's 3 million person workforce is about 3% smaller than it was at the start of the pandemic.

A long-awaited "silver tsunami" of retiring baby boomers came crashing all at once. Birth rates have dropped each year since 2007 and the labor force can now scatter across the country — including to warmer or lower-tax places — to work remotely.

As well, there's the clarion call for social justice after George Floyd's murder.

Amid all that, fresh off re-election and managing a state with a $17 billion surplus against its two-year $54 billion budget, Walz said he doesn't see a rupture in optimism in the state.

"We just endured a pretty intense campaign that I mean, at the end, my closing argument was, 'They're rooting against Minnesota. I'm rooting for Minnesota,'" he said. "And I think the public spoke on that, that they wanted that optimistic vision, and we had it."

But he also hinted that circumstances may necessitate grabbing tools — including tax cuts and direct incentives to businesses — that are rarely used by Minnesota Democrats.

"I've never denied that tax policy is a piece of that," Walz said. "I oftentimes say, 'You get what you pay for.' Minnesotans pay a little more; they get a little more. [But] if they're not getting that little more, then they have a right to ask, 'What can we do differently?'"

In a follow-up email, a spokeswoman for the governor said any details would be revealed next month in his proposed budget.

In the interview, Walz spoke not merely about luring teachers away from red states to Minnesota, where, in his words, "you don't want to have to deal with 'don't-say-gay' laws." He also alluded to the Red River Women's Clinic, an abortion provider, which has relocated from Fargo east of its namesake into Moorhead, Minn. And he touted the state's history as a safe harbor for people in hardship looking to better their lives.

"We've got the Boundary Waters. We've got a high quality of life," said Walz. "But I think one of the things is we have always been welcoming to immigrants and refugees."

During the gubernatorial campaign, Republican nominee Scott Jensen, along with his running mate, former NFL player Matt Birk, posted billboards around the Twin Cities with the slogan, "Safe Streets."

While Walz pointed out that the state's crime level ranks among safest in the country, he acknowledged the critique still stings.

"That was one of the draws here," Walz said. "If you're going to move to Minnesota, you're going to be safe."

Steve Grove, Department of Employment and Economic Development commissioner, said Minnesota's leaders should not be defensive of an economy that is humming along.

"I mean 13 months of job growth. We added over 17,000 jobs last month. Lowest unemployment rate in the country," Grove said. "There's a reason for Minnesotans to be optimistic."

Grove eyed the second quarter of 2023 for when Minnesota will fully return to pre-pandemic job levels. It needs about 35,000 more people working to reach that level. Minnesota does possess historically low unemployment rates, with Mankato leading the nation with a 1.3% rate this fall.

Minnesota has long touted its major concentration of Fortune 500 companies in the Twin Cities — from Target to Best Buy to General Mills and UnitedHealth Group. But in both Minneapolis and St. Paul, downtown office towers struggle with vacancies as the work-at-home lifestyle is now the norm amongst many employers.

"I think about this realignment of a major urban area," said Walz. "When 30,000 Target employees are no longer downtown, what about the dry cleaners? What about the bars and pubs?"

The Minnesota formula, said Walz and Grove, remains tested and proven: attract talent with the state's highly educated labor pool and top-quality infrastructure undergirded by high taxes. The state's workforce is the third-most educated in the nation (49% of adults hold some post-secondary degree).

Still, the Minnesota recipe of education and infrastructure might no longer be enough in an environment typified by aggressive competition for workers (and employers) amongst states.

"We're in the realm of states that have some natural strengths," said Grove, noting that states such as Georgia and Alabama have spent billions in incentives for businesses. "If we stand there, you're going to get passed by pretty quick."

One concern Walz won't have during the coming months will be Republicans in St. Paul. For the first time in nearly a decade, Democrats will have control of the Legislature and the governor's office, meaning that party priorities — from driver's licenses for undocumented immigrants to continuing an incentive program for low-carbon cars — could be politically more tenable.

And while he's avoided interstate grudge matches beyond friendly football chiding, the governor — who himself came from one of those western states (Nebraska) decades ago to teach — has dug his way into the collective DNA enough to understand that emboldening a Minnesotan is often more effective through flattery than fault-finding.

"It's founded on fact, but there's a bit of Minnesota exceptionalism on this that we don't have to go to those lengths," said Walz, speaking of what he termed an outdated form of thinking. "'People will come here because we're Minnesota. We're not Sioux Falls or wherever.' As you're seeing now, that's not totally true."

With other states spending more on economic development, the governor said Minnesota can no longer afford to act above it all. While he didn't sketch out a billboard campaign featuring loons and a lighthouse, he's eager to jump into the fray.

"I'm asking our team to be bold," Walz said.