A couple of weeks ago I noted how, in 2025, Minnesota had become a state with a below average level of per capita Gross Domestic Product (GDP) for the first time on record.
A measure like GDP per capita might seem a little esoteric to many. What do we see when we look at a more immediate measure, like Personal Income?
These data allow us to look back much further into our state’s history. The Bureau of Economic Analysis (BEA) has produced data on per capita Personal Income for each state going back to 1929. As Figure 1 shows, Minnesota was a below average per capita Personal Income state for every year but one prior to 1973. We climbed steadily from the end of World War Two until, in 2004, per capita Personal Income in Minnesota was 8.5% above the national level and we ranked 9th out of 50 states; this was our best performance on either measure.
Figure 1: Per capita Personal Income in Minnesota
But these are nominal numbers. While they account for inflation, they do not account for differing costs of living across states.
To account for both inflation and these differing costs of living, we use an Implicit Regional Price Deflator (IRPD) for each state, provided by the BEA. This allows us to compare regional price levels over time by adjusting for both local price variations (via Regional Price Parities, or RPPs) and national inflation (via the Personal Consumption Expenditures (PCE) price index). Sadly, these only go back to 2008 and 2024 is the most recent year available.
The difference this adjustment makes can be seen in Figure 2. While the nominal numbers show per capita Personal Income for the United States and Minnesota climbing ever upwards, when we adjust for national inflation and regional price differences, we see that for both per capita Personal Income is below its 2021 peak; by 0.3% for the United States and 1.9% for Minnesota.
Figure 2: Per capita Personal Income
This process allows us to compare the growth in real per capita Personal Income across states over time. As Figure 3 shows, from 2018 to 2024, real per capita Personal Income growth in Minnesota clocked in at 12.0%, below 34 out of 50 states.
Figure 3: Change in real per capita Personal Income, 2018 to 2024
This ties in with what we see in Figure 1, with our “premium” drifting down from that 2004 peak. As Figure 4 shows, Minnesota’s “premium” in real, per capita Personal Income has fallen from 10.0% in 2012 to 4.6% in 2024 and our ranking has drifted down from a peak of 8th out of 50 states in 2016-2017 to 13 in 2024.
Figure 4: Real per capita Personal Income in Minnesota
Once again, and even with this less esoteric, more immediate measure, we see that Minnesotan’s prosperity is moving in the wrong direction.