Kalambokidis paints a picture of an economy ready to grow
The fundamentals for growth in the U.S. economy are in place for 2014 and 2015, according to Minnesota State Economist Dr. Laura Kalambokidis.
Speaking before retailers at the Minnesota Retailers Association Annual Meeting Thursday, October 24, 2013, Kalambokidis painted a picture of an economy ready to grow, but cautioned that policy uncertainty and deficits could challenge growth in Minnesota and across the nation.
During her speech, Kalambokidis made the following points related to our economy:
- Basic fundamentals for growth in the U.S. economy are in place for 2014, 2015;
- Minnesota's employment has recovered to pre-recession levels;
- Currently, Minnesota employment growth exceeds the national rate;
- Minnesota's unemployment rate is well below nation's;
- Minnesota's per capita income exceeds U.S. level;
- Federal actions create near-term economic uncertainties;
- Policy uncertainty imposes costs;
- Minnesota's labor force growth is slowing sharply;
- In the long run, baby boomer retirements are expected to extend federal deficits;
- U.S. real GDP growth is expected to average just 2.5 percent per year over the next 30 years, well below the 3.1 percent 20-year average prior to the recession; and
- U.S. real GDP growth over next 30 years expected to be well below 20-year pre-reccession average.
In addition to Kalambokidis, Minnesota Senator Terri Bonoff addressed Annual Meeting attendees, thanking retailers for the jobs they provide and for their contributions to the Minnesota economy.
Study shows $108 million in lower consumer prices, with the potential for more.
According to a new economic report released today by the Merchants Payments Coalition (MPC), debit card swipe fee reform has accomplished much of what Congress intended when it passed debit reform legislation in 2010 by pumping a significant infusion of savings and jobs into state economies across the country.
The report—The Costs and Benefits of Half a Loaf: The Economic Effects of Recent Regulation of Debit Card Interchange Fees—can be found at www.unfaircreditcardfees.com.
In Minnesota, the lower debit card swipe fee, which the Federal Reserve dropped from 48 cents per transaction to 24 cents, allowed Minnesota merchants to reduce costs, saving consumers nearly $108 million and spurred the creation of 690 new jobs in 2012.
The report also measured the potential impact on the U.S. economy had the Federal Reserve followed the language of the law. The Federal Reserve, for example, originally proposed a rate of at most 12 cents per debit swipe. In Minnesota alone, $51 million would have been generated in consumer savings along with an additional $23 million in merchant savings and this would have been sufficient enough to support an additional 328 jobs.
Had credit card swipe fees been reduced to 24 cents per transaction, Minnesota consumers would have saved an additional $283 million, merchants would have saved another $127 million, and 1,815 new jobs would have been created last year.
Special Session Provides Storm Relief, Skips Warehousing Tax And Minimum Wage
Legislators met in St. Paul yesterday for a "special session" called by Governor Mark Dayton to address storm relief for parts of Minnesota. After a few hours of procedural work, Legislators passed a $4.5 million storm relief package designed to facilitate Minnesota's acceptance of federal disaster funds.
Although prior to the special session there were discussions indicating a possible repeal of several business to business taxes enacted in the final hours of the 2013 legislative session, legislative leaders stayed focused on appropriating funds to leverage federal disaster dollars. Several business groups, including the Minnesota Retailers Association, had hoped for a repeal of a controversial business storage and warehouse tax that kicks in April, 2014.
Senate Majority Leader Tom Bakk ended the possibility of expanding the special session to issues beyond storm relief by calling such a move irresponsible, stating it would lead to an unbalanced state budget in the short term. Bakk added that until the State's November budget forecast is out there is no guarantee repealed taxes could be replaced with surplus revenues.
Also not addressed in special session was a left over issue from the 2013 session--a proposed increase of Minnesota's minimum wage to $9.50 by 2015. Efforts to "Raise the Wage" were prominent at the Minnesota State Fair, with a survey of 7,000 fair-goers conducted by the Minnesota House of Representatives showing 61 percent in favor of a $9.50 minimum wage.
DFL leadership in the Senate indicated during the special session that at the top of the priorities list for the 2014 Legislative session are passing a minimum wage increase and a bonding bill. The next regular session of the Minnesota Legislature kicks off February 25.