These Unique Strengths, Challenges Define the Six Regions of Greater MN
To hear some politicians tell it, there are two Minnesotas: There’s the Twin Cities, land of lattes and light rail and the beneficiary of untold state-sponsored largesse, and then there’s Greater Minnesota, long-suffering home to real Minnesotans, stolidly laboring along in spite of consistent neglect from the powers-that-be in St. Paul.
There’s a lot that’s not quite right about that narrative, not the least of which is the assumption that “Greater Minnesota” is one big, uniform place. In reality, Greater Minnesota contains regions that are distinct from one another because of the land they sit on, because of the people who settled them and the people who live in them now; how rural they are; what businesses they’re home to, and many other factors.
A new report from Minnesota Compass looks at some of those differences across six different parts of the state: the Central, Northland, Northwest, Southern, Southwest and West Central regions.
Boundaries between the six regions were drawn in the 1980s when the McKnight Foundation set up rural Minnesota Initiative foundations, established amid the farm crisis and mass mining layoffs to boost regional economies. The goal, said Tom Renier, founding president of the Northland Foundation, was to map the regions based on economic and socioeconomic differences. Coincidence or not, the lines match the main agricultural and natural resource products produced across the state. (The McKnight Foundation is a financial supporter of MinnPost.)
By looking at Greater Minnesota as six distinct regions, a more nuanced picture of geography, industry, wealth and people and emerges.
From cities that border the Twin Cities metro to the regional hub of St. Cloud, and up into lake country, this part of Minnesota, traversed by both I-94 and I-35, is in the middle of everything.
In recent years, one of its defining characteristics has been growth. Central Minnesota has seen the fastest rate of population and job growth of any region of the state, which has attracted residents and investment.
Poverty is lower than the state average, and the region has the second highest incomes of any region of the state, with the median household making $62,558 per year.
Job growth relative to 2000 by Minnesota region, 2000-2016
Much of the region’s success has to do with geography, said Luke Greiner, a regional analyst for central and southwestern Minnesota at DEED.
“If you were to pinpoint one area, why central Minnesota is doing so well, a lot of it is really because we’re gaining (from) the metro’s expansion,” he said — noting that the Twin Cities suburbs’ growth is climbing up into Chisago and Isanti counties, and west into Sherburne and Wright counties.
That strength is also one of its greatest challenges, Greiner said. It’s a commute, but people can live in the central region and work in the Twin Cities. They can easily travel to the Twin Cities to spend money on the weekend.
“It’s great we can access the jobs in the Twin Cities, but it’s bad that we can access the jobs in the Twin Cities,” he said. “It’s a little bit different than the Arrowhead, where they’re not really competing with the (cities). People aren’t making the decision, ‘Should I drive to Grand Marais or Bloomington?’ In a lot of Central Minnesota, particularly the collar counties, that’s a possibility.”
The region has a diverse economy, Greiner said, with jobs spread out across industries. Relative to the state, central Minnesota has some of the highest concentrations of motor vehicle body and trailer manufacturing, poultry and egg production, non-metallic mineral product manufacturing, medical and diagnostic lab and furniture and kitchen cabinet manufacturing jobs.
Jobs, more affordable housing and amenities are expected to continue being a draw for population to the area in the future.
“There is projected to be a lot of population growth in that area for years to come, and largely that is related to job growth,” said Ellen Wolter, a research scientist at Minnesota Compass.
The Northland’s Lake Superior shoreline, rugged terrain and boreal forests set it apart from the rest of the state in terms of topography. When it comes to economy, the region, which includes the Iron Range, is an economy in transition.
Long dependent on natural resources, including mining and forestry, for jobs, the area has diversified in recent years, in particular toward education and health. Compared to other parts of the state, the land is less hospitable to agriculture.
Job growth here has been slow relative to other parts of the state.
Part of it is it’s hard to attract some types of companies to the region, as natural resource jobs pay relatively high wages.
“It’s … been kind of a frustration for us, diversifying our economy because it’s challenging to attract, say, manufacturers to put a factory next to some of the highest-paying industrial jobs in the state, because they’re competing for employment,” said Mark Phillips, commissioner of the Iron Range Resources and Rehabilitation Board.
They’ve had some luck with call centers — like a Delta reservations center operating in Chisholm, he said.
“We have some of that, but as far as getting high-end manufacturing jobs like they might have in Alexandria or Fergus Falls, we have a little trouble attracting that kind of industry because of what we have,” Phillips said. Northeastern Minnesota has high concentrations of metal ore mining, pulp, paper and paperboard mills, mining support and logging jobs relative to the rest of the state.
But where jobs do expand, the region is likely to struggle finding employees in the future. Northeastern Minnesota has fewer working-age adults as a share of its population than any other region of the state, with adults over age 65 making up nearly 20 percent of the population (part of what’s driving its economic shift is likely that more health care workers are needed as the population ages). Like other rural regions, it struggles to retain its young people, who move away for opportunities elsewhere.
Expanding broadband in rural parts of the state to improve internet connections and, hopefully, lure business, is a top issue for all non-metro regions of Minnesota, but it’s especially tricky in the state’s northeast reaches, and expensive to boot, Phillips said.
“In a prairie town, you might go on top of the grain elevator or the water tower … and you can serve the whole county from a couple towers,” Phillips said. Because of topography and trees, which block the signal — “pine trees hate broadband,” he added — it's not so simple in St. Louis County.
Iron Range counties tend to have some of the highest unemployment rates in the state, greater than 6 percent in Koochiching and Itasca counties in November, compared to less than 3 percent for the state as a whole. Poverty, at 13.7 percent, is among the highest of any Minnesota region, and median household income is among the lowest, at $51,379 annually.
Despite some of those characteristics, the area is gaining jobs, albeit slowly, and pockets of the area, such as Grand Rapids and Duluth, are doing well, Wolter said.
Unlike Minnesota’s Arrowhead region to its east, Northwestern Minnesota is largely flat and highly reliant on agriculture as an economic engine. But it shares some of its neighbor’s challenges, including lower incomes and higher poverty rates than other Minnesota regions.
Distance, too, is a defining characteristic, with population centers few and far between. Residents of Northwest Minnesota spend a higher share of their income on housing and transportation relative to the state’s other regions, according to Minnesota Compass.
For some, commutes are especially long, as some can’t find the housing or amenities they’re looking for near their jobs, said Cameron Fanfulik, the executive director of the Northwest Regional Development Commission. Take a company like Digi-Key, an electronics component distributor headquartered in Thief River Falls.
“They have people from as far as Moorhead (a two-hour drive) or possibly even further working for them,” he said.
Sugarbeets and wheat thrive in this area’s soil, and the trade, transportation and utilities sector accounts for a high share of jobs in this region. The region also has a sizable manufacturing industry.
A relatively large share, 13.9 percent of people, in Northwest Minnesota live in poverty, and median household incomes are the lowest in the state, at $49,321, according to Minnesota Compass, though Fanfulik notes living expenses are less than in many parts of the state. Compared to Minnesota as a whole, there are high concentrations of jobs in transportation equipment manufacturing, other crop farming, vegetable and melon farming and oilseed and grain farming here, according to DEED.
Southern Minnesota has a strong economy, with among the largest health and education sectors in the state: one third of jobs in the region are in this sector. Home to many colleges and universities and the Mayo Clinic, it has long been regarded as a national — even international — mecca for health care, and also has many residents employed in agriculture.
Manufacturing is also a strength for Southern Minnesota. In terms of job concentration relative to Minnesota on the whole, it has more people employed in glass and glass product manufacturing, cable and subscription programming, grain and oilseed milling and ventilation, heating, air-conditioning and commercial refrigeration, according to DEED.
Southern Minnesota is the most educated non-metro region of the state: 27 percent of its adults over age 25 hold a bachelor’s degree or higher. Median household incomes are among the highest of any region in the state, at $61,518, and poverty, at 10 percent, is on par with the state as a whole. Job growth is among the strongest of any region in the state. Though its economy is reliant on agriculture, largely crops, dairy and hogs, it has several large population centers, including Rochester, Mankato, Winona, Austin, Albert Lea, Faribault and Northfield.
The concentration of colleges and universities in parts of Southern Minnesota is unique to the area, said John Considine, the director of regional business intelligence for Greater Mankato Growth. On one hand, he said, it’s great, because it brings in young people and creates a strong workforce. But he hopes to see the region improve its efforts at retaining the workforce it creates.
A Minnesota State University, Mankato survey found that 50 percent of the school’s graduates would like to stay in the area, which only ends up retaining about 20 percent of grads, Considine said, signifying to him that there’s some work to do to keep those grads around.
“It’s a cool opportunity, it’s something that we’re building workforce strategies around … to try and retain that talent,” he said.
Compared to other non-metro Minnesota regions, the share of working-age adults is slightly larger in Southern Minnesota, and the region has a higher share of residents born in a foreign country. Overall, the region has been growing, strong and steady, and will likely see a lot of growth in the future, Wolter said.
“Education and health care are really stable economies there, and manufacturing as well. That job growth, those stable jobs, are likely pulling people in for employment opportunities,” she said.
Largely rural Southwestern Minnesota weathered the Great Recession all right, said DEED's Greiner. While many industries took a nosedive, commodity prices for crops, which make up a large part of the regional economy along with hog production, remained strong.
Crop prices have since fallen, wreaking some havoc on the economy.
“It was definitely a strength then, but it’s certainly a weakness now,” Greiner said. “The last couple years, we’ve definitely had pretty dismal commodity prices for what our bread and butter is in that region. It’s not necessarily stopping people from producing … it’s just really putting a crunch on disposable income that gets to be spent on equipment and houses.”
Job growth has been modest compared to other non-metro Minnesota regions, and Southwestern Minnesota is the only region in the state that’s lost population since 2000, according to Census figures. Southwestern Minnesota has higher job concentrations in pig farming, basic chemical manufacturing, dairy product manufacturing and other animal production than the state as a whole, according to DEED.
But there are bright spots: The region as a whole has one of the highest concentrations of foreign-born populations in the state, at nearly 5 percent, which helps offset an aging population. Some towns in Southwestern Minnesota have immigrant population shares that rival, or beat, the Twin Cities.
A prime example of this is Worthington, said Abraham Algadi, the executive director of the Worthington Regional Economic Development Corporation. In Worthington, about one in three residents was born in a foreign country, the highest share of any city in the state, according to Minnesota Compass.
Many of these immigrants were drawn to opportunity in the ag sector. Now, their entrepreneurial contributions are helping to revitalize downtowns that would likely otherwise have high vacancy rates, Algadi said.
Take a walk downtown today, and it’s clear Worthington isn’t the type of rural Minnesota town you would have found 30 years ago. Today, many of the entrepreneurs are foreign-born, offering an array of shops that bring life downtown.
“Everything from operating a mobile phone sales and repair (shop) to a grocery store where you can go and buy all kinds of stuff that you could (otherwise) only find somewhere on Lake Street in Minneapolis,” he said.
Southwestern Minnesota’s poverty rate is on par with the state’s as a whole, at 10 percent of residents living below the poverty line. Median household income, at $54,554 per year, is in the middle of the pack, but cost of living is lower than in many parts of the state. The region has the lowest share of adults, age 25 or older, with a bachelor’s degree or higher, of any in the state, but Algadi is hoping to see that change.
He’d like to see the region focus more on growing its knowledge-based industries, “businesses that can create amenities, that can create real careers and good-paying jobs that rely on knowledge,” he said. Algadi cited animal health and animal vaccine development, what he called core competencies of Southwestern Minnesota, as examples.
Two of most visible elements of West Central Minnesota are agriculture — it’s a big producer of grains — and lakes, said Anna Wasescha, the president and CEO of the West Central Initiative.
The agriculture feeds into local manufacturing, with companies that make value-added food products such as potato chips and dog food.
Like Central Minnesota, the West Central part of the state’s economy has seen steady job growth. But it doesn't have the advantage of being close enough to the Twin Cities metro to attract many of that area's residents to fill jobs.
“If you were to ask what’s the biggest challenge,” Wasescha said, “the challenge is the workforce shortage.”
Employers are casting wider and wider nets to find workers, she said: from reconsidering the 40-hour workweek to allow more flexibility, to attempting to recruit people not currently in the workforce. And regional development officials are trying to figure out ways to retain people who are raised or educated in West Central Minnesota, and then hop on highways and head to the Twin Cities and beyond.
Two of West Central Minnesota’s population centers — Fergus Falls and Alexandria — have some of the highest shares of retirement-age adults in their populations in the state, and the region has a lower foreign-born population share compared to other parts of Minnesota, according to Minnesota Compass.
Launched in 2016, a campaign by the West Central Initiative called Live Wide Open aims to help reverse that, by “(encouraging) people to move to, return to and, yes, stay in west central Minnesota,” its website says. The campaign touts the lake lifestyle, good schools and affordability of the area.
“We’re trying to tell the rest of the world what a great place this is to live and work and play, and also tell them how it’s possible to move here,” Wasescha said.