Economy of Minnesota
From Wikipedia, the free encyclopedia
The economy of Minnesota produced 234 Billion dollars of gross domestic product in 2005.[1] Minnesota headquartered 36 publicly-traded companies in the top 1000 U.S. companies by revenue in 2006.[2] This includes such large companies as Cargill, Target, and UnitedHealth Group. The per capita personal income in 2004 was $36,184, 8th in the nation.[3] The median household income in 2005 was approximately $52,024, ranking eleventh in the nation.[4]
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[edit] Income and retail
Average household incomes range from $17,369 in Todd County to $42,313 in Hennepin County. Salaries are highest in the urban and suburban counties of the twin cities metropolitan area. Retail sales per capita were $10,260 in 1997, higher than the U.S. average of $9,190. The Twin Cities suburb of Roseville has the highest per capita sales, which recorded $14,870 per capita, but total revenues are much higher in Minneapolis, St. Paul, Bloomington, and Edina.
[edit] Industry and commerce
Minnesota's economy has transformed in the past 200 years from one based on raw materials to one based on finished products and services.
The earliest industries were fur trading and agriculture. Agriculture is still a major part of the economy even though only a small percentage of the population, less than 1% are employed in the farming industry.[5]
Minnesota is the U.S.'s largest producer of sugar beets, sweet corn, and green peas for processing and farm-raised turkeys.[6] State agribusiness has changed from production to processing and the manufacturing of value-added food products by companies such as General Mills, Cargill (milling), Hormel Foods Corporation (prepackaged and processed meat products), and the Schwan Food Company (frozen foods).
Forestry, another early industry, remains strong with logging, pulpwood processing, forest products manufacturing, and paper production. The amount of forested land in the state is declining, from 16.7 million acres in 1990 to 16.2 acres in 2004; however, the average forest is maturing. From 1999 to 2004 the average annual growth within the state was 550 million board-feet of timber, while the average amount harvested was only 330 million board-feet per year.[7]
Minnesota was famous for its soft-ore iron mines which produced a significant portion of the world's iron ore for over a century. Although the pure ore is now depleted, taconite mining remains strong using processes developed locally to save the industry. In 2004 the state produced 75 percent of the usable iron ore in the country.[6] 3M (formerly Minnesota Mining and Manufacturing Co.) today is a diversified manufacturer of industrial and consumer products. The port of Duluth was created by the mining boom and today continues to be an important shipping port for the Midwest's agricultural and ore products.
Retail is represented by Target Corporation, Best Buy, and Supervalu, all headquartered in the Twin Cities. Southdale Center, the first fully-enclosed and completely climate-controlled shopping mall in the United States opened on October 8, 1956, in the suburban city of Edina. The largest shopping mall in the United States, the Mall of America, is located in Bloomington.
Medtronic and St. Jude Medical represent a growing biomedical industry spawned by university research, and Rochester is the headquarters of the world-famous Mayo Clinic. UnitedHealth Group is the second largest health insurance company in the U.S.
Financial institutions include U.S. Bancorp, TCF Bank, and Wells Fargo & Co.; insurers include St. Paul Travelers and Thrivent Financial for Lutherans.
As might be expected in state with a love of the outdoors, boats and other recreational products are manufactured by a number of Minnesota companies, including Polaris Industries and Arctic Cat, who make snowmobiles and ATVs, Alumacraft Boat Company, and Lund Boats.
An active high-technology sector is represented by Alliant Techsystems, Honeywell, Cray Computers, Imation, and a large IBM plant in Rochester.
Today, the most salient characteristic of the economy is its diversity; the relative outputs of its business sectors closely match the United States as a whole.[8]
[edit] Minnesota's largest companies
[edit] Largest private companies headquartered in Minnesota
Cargill, headquartered in Minnetonka employs 115,000 people worldwide and boasts annual revenues of $66.7 billion.[9]
[edit] Largest public companies headquartered in Minnesota
| State Rank by Revenue |
Company Name | National Rank |
Revenue ($millions) (sic)* 2006 estimate |
Headquarters City | Known for |
|---|---|---|---|---|---|
| 1 | Target | 29 | 52,620.0 | Minneapolis | Retailing |
| 2 | UnitedHealth Group | 37 | 45,365.0 | Minnetonka | Managed Health Care |
| 3 | Best Buy | 76 | 27,433.0 | Richfield | Retailing |
| 4 | St. Paul Travelers | 85 | 24,365.0 | St. Paul | P & C, Prof. Liability Insurance |
| 5 | 3M | 101 | 21,167.0 | Maplewood | Diversified manufacturing |
| 6 | Supervalu | 113 | 19,543.2 | Eden Prairie | Food Distribution |
| 7 | U.S. Bancorp | 131 | 16,596.0 | Minneapolis | Banking and financial services |
| 8 | Northwest Airlines | 182 | 12,286.0 | Eagan | Airline |
| 9 | CHS, Inc. | 188 | 11,984.6 | Inver Grove Hgts. | Fuel Distribution |
| 10 | General Mills | 206 | 11,244.0 | Golden Valley | Food Processing |
| 11 | Medtronic | 235 | 10,054.6 | Fridley | Medical Devices |
| 12 | Xcel Energy | 247 | 9,695.3 | Minneapolis | Electricity Production and Dist. |
| 13 | Land O'Lakes | 301 | 7,567.4 | Arden Hills | Dairy Products |
| 14 | Thrivent Fin. for Lutherans | 352 | 6,189.5 | Minneapolis | Financial Products |
| 15 | C.H. Robinson Worldwide | 379 | 5,688.9 | Eden Prairie | Logistic Services |
| 16 | Hormel Foods | 401 | 5,414.0 | Austin | Meat Processing |
| 17 | Nash Finch | 457 | 4,555.5 | Edina | Food Distribution |
| 18 | Ecolab | 459 | 4,534.8 | St. Paul | Sanitation Supplier |
| 19 | Mosaic | 470 | 4,396.7 | Plymouth | Fertilizer Mfg. |
| 20 | PepsiAmericas | 520 | 3,726.0 | Minneapolis | Bottling |
| 21 | Bemis | 545 | 3,474.0 | Minneapolis | Flexible Packaging |
| 22 | Pentair | 626 | 2,946.6 | Golden Valley | Water Treatment |
| 23 | St. Jude Medical | 628 | 2,915.3 | St. Paul | Medical Devices |
| 24 | Alliant Techsystems | 638 | 2,801.1 | Edina | Defense Contractor |
| 25 | Valspar | 648 | 2,714.0 | Minneapolis | Paint and Coatings |
| 26 | Patterson | 707 | 2,421.5 | St. Paul | Dental and Veterinarian Supplies |
| 27 | Minnesota Life | 748 | 2,268.5 | St. Paul | Life Insurance |
| 28 | Regis | 759 | 2,194.3 | Edina | Hair Salons |
| 29 | Polaris Industries | 843 | 1,873.7 | Roseau | Snowmobiles and ATVs |
| 30 | Toro | 864 | 1,779.4 | Bloomington | Power lawn tools |
| 31 | Deluxe | 873 | 1,749.5 | Shoreview | Check Printing |
| 32 | Donaldson | 931 | 1,595.7 | Minneapolis | Filtration Products |
| 33 | Fastenal | 959 | 1,523.3 | Winona | Fastener Manufacturer |
| 34 | H.B. Fuller | 965 | 1,512.2 | Vadnais Heights | Adhesive Manufacturer |
| 35 | Federated Mutual Insurance | 970 | 1,499.7 | Owatonna | P & C, Health, and Life Ins. |
| 36 | Ceridian | 986 | 1,459.0 | Minneapolis | Payroll, benefits, and HR services |
*The revenues stated are in $1000.
[edit] Energy use and production
- See also: Common ethanol fuel mixtures
The state does not produce any petroleum of its own but boasts the largest oil refinery of any non-oil-producing state, the Pine Bend Refinery. As of 2001, Minnesotans were using a total of 7.2 million gallons of gasoline per day, and fuel use rises in the region by about 2% annually. About 70% of the gasoline fuel used in the state comes from Pine Bend and the nearby St. Paul Park Refinery, while most of the rest comes from a combination of the Mandan Refinery in North Dakota, and the Superior Refinery in Superior, Wisconsin. 40 to 50% of Pine Bend's output is used within the state. Flint Hills is currently planning a $100 million expansion to increase capacity at the plant to about 330,000 barrels per day. Petroleum from the north comes to the state through one of the longest pipelines in the world, the Lakehead Pipeline and the Minnesota Pipeline. Additional crude comes from the south via the Wood River Pipeline.
Ethanol fuel is produced in the state, and consumer gasoline is required to contain 10% ethanol (E10). As of 2006, Minnesota is the only U.S. state with such a mandate. 20% ethanol (E20) will be mandated in 2013.[10] Minnesota has the highest number of fuel stations offering E85 fuel, with 300 statewide.[11] A 2% biodiesel blend has also been required in diesel fuel since 2005. Electricity-producing wind turbines have become popular, particularly in the windy southwest region on the Buffalo Ridge. As of November 2006, the state is the country's fourth-largest producer of wind power, with 812 megawatts installed and another 82 megawatts planned.[12]
Like other Midwestern states that experience cold winters, Minnesota is heavily dependent on natural gas for home heating. Just over two-thirds of homes use the fuel.
[edit] State taxes
Minnesota's income tax is slightly progressive with three rates, 5.35%, 7.05% and 7.85%.[13] The sales tax in Minnesota for most items is 6.5%. The state does not charge sales tax on clothing, some services, or food items for home consumption.[14] The state legislature may allow municipalities to institute local sales taxes and special local taxes, such as the 0.5% supplemental sales tax in Minneapolis.[15] The cities of St. Paul, Rochester, Duluth and St. Cloud have similar taxes. Excise taxes are levied on alcohol, tobacco, and motor fuel. The state imposes a use tax on items purchased elsewhere but used within Minnesota. Owners of real property in Minnesota pay property tax to their county, municipality, school district, and special taxing districts. The overall state and local tax burden is calculated to average 11.9% in 2006, ranking 4th highest in the country.[16]
[edit] References
- ^ News Release: Gross Domestic Product (GDP) by State, 2005. U.S. Department of Commerce (2006). Retrieved on December 12, 2006.
- ^ a b Fortune 500 2006. Our annual ranking of America's largest corporations. CNNMoney.com; Cable News Network LP, LLLP. A Time Warner Company (2006). Retrieved on November 19, 2006.
- ^ Bureau of Economic Analysis: Regional Economic Accounts. U.S. Department of Commerce. Retrieved on June 22, 2006.
- ^ DP-3. Profile of Selected Economic Characteristics: 2000. U.S. Census Bureau. Retrieved on December 12, 2006.
- ^ DP-3. Profile of Selected Economic Characteristics: 2000. U.S. Census Bureau. Retrieved on December 12, 2006.
- ^ a b Wealth of Resources. Positively Minnesota. Minnesota Department of Employment and Economic Development (2006). Retrieved on December 13, 2006.
- ^ Minnesota's Forest Resources 2004. U.S. Dept. of Agriculture. Retrieved on December 12, 2006.[
- ^ Environmental Information Report, App. D Socioeconomic Information (PDF) (2003-05-30). Retrieved on November 19, 2006.
- ^ The Largest Private Companies. Forbes (2006). Retrieved on November 26, 2006.
- ^ 2005 Senate Bill 4 (Ethanol Mandate Increase). Minnesota Votes. Retrieved on November 26, 2006.
- ^ Minnesota Commerce : E85 Fuel Station List Consumer Info and Services. Minnesota Department of Commerce. Retrieved on October 19, 2006.
- ^ Wind Energy Projects Throughout the United States of America. The American Wind Energy Association. Retrieved on November 26, 2006.
- ^ Minnesota income tax rates for 2005/2006. Minnesota Department of Revenue. Retrieved on November 26, 2006.
- ^ Sales tax fact sheets. Minnesota Department of Revenue. Retrieved on November 26, 2006.
- ^ Local Sales Tax and Use (PDF). Retrieved on November 26, 2006.
- ^ Minnesota State-Local Tax Burden Compared to U.S. Average (1970–2006). Tax Foundation (2006).
