Shutdown could cost Minnesota economy $23 million a week

John Hageman

Another casualty has been identified on the eighth day of the government shutdown: Minnesota’s spending power.

Tom Stinson, the state’s economist and University of Minnesota professor, told the Washington Post Thursday that the state could lose $23 million in spending power a week as the result of 23,000 state workers being laid off during the shutdown. Those workers may only receive half of their average weekly salaries of $1,000, Stinson said.

Because those workers will look to spend less while they are temporarily out of work, private industries will also suffer, Stinson said. The longer the shutdown lasts, the more noticeable the impact will be, he added.

“This is not going to produce a recession in Minnesota or anything like that, but it’s going to be a drag on the state’s economic growth,” Stinson said.

Gov. Mark Dayton and Republican leaders have yet to compromise on an overall budget solution.

At the core of the issue is GOP leadership’s unwillingness to raise new revenues by increasing taxes on the state’s wealthiest. The Star Tribune reported Friday that the small group of high-earners, like Ecolab CEO Doug Baker, believe raising their taxes will only hinder economic growth.

Others, like car dealer Paul Walser, aren’t as opposed to being taxed more.

“I certainly feel like I have been very blessed and that I have all that I need and then some, so I don’t have a problem philosophically with paying more tax,” he said.