Mesabi Daily News calls for economic diversification

Today’s Mesabi Daily News editorial, “Diversify, diversify,” cheers the news that Minntac will soon resume full production, but primarily demands leaders to dedicate new focus on economic diversification.

So, yes, let’s rejoice in Minntac going back to full operation in about two weeks. And let’s also hope that the company’s Keetac facility on the west Range will soon be restored from partially idled to fully operational. There appear to be indications that could be the case.

However, this is clearly not the time to put on some rose-colored glasses while viewing the good news of the Minntac callback.

As we said a little more than a week ago when we first reported this likely callback, the effort to diversify the Iron Range economy must not abate — it must only be intensified.

The Iron Range grows more and more vulnerable to fickle worldwide conditions that can blow an ill wind into our region often on very short notice.

The best way to ensure that the Iron Range can weather these economic currents that impact our region is for more diversity in our business base.

Here was my reaction, portrayed aptly by Iron Range native Chris Pratt:


Over the past decade the MDN has employed a unapologetic slant toward mining companies, so such news should be seen as both a welcome surprise and a symptom that we really are entering a choppy new time for the old industries of the Iron Range. We share the future. And, finally, we share present reality, too.


  1. Of course we want diversification up here. That is my beef with IRRRB, they have millions to help the Range create businesses and jobs that can help withstand the cycles that come with the mining industry. They have the money but not a set of qualifications a business must meet to get IRRRB money. A total failure of adding business folks to help them set the qualifications for businesses and help pick companies that have the best chance to succeed. We also can’t turn our back to the logging/mining industries that can employ thousands up here with good paying jobs. It isn’t a one or the other- diversify or mining- it has to be an all in to creating jobs up here that can support families.

  2. I agree with Ken. Sometimes it’s like people want to make it “mining” or “something else”, but in reality, it needs to be both, “mining” and “something else” (hopefully many other “elses”). Those who think mining and other things absolutely can’t co-exist aren’t being realistic. Those who think we can survive without diversifying aren’t being realistic. Extremists on both sides of the issue just make it tough for families who actually live here.

  3. Well stated…However, the members of the IRRRB will never address the fundamental reasons new, diverse business are adverse to locating on the Range. They’ve shown no interest in changing their negative attitude towards business in general. They have no interest in improving the overall poor business climate on the Range. The vast majority of the IRRRB members dislike, really dislike, successful business owners.

  4. Even New York has no tax zones set up to attract businesses. New York chased out businesses yrs ago and now have changed course by doing whatever it takes to get companies back and employ New York workers. Can’t we learn from them that it is easier to chase businesses out than to beg them to come back. We have capital available for start ups but just don’t attract them up here. We had better start understanding every state will be chasing the same companies and we better show them some love along with the money!!!

    • Gerald S says

      Again, to attract businesses that create good paying jobs with a future, the highest priorities — in the words of the major business leaders themselves — are the availability of skilled or trainable industrious workers and good infrastructure, including roads, bridges, water, sewer, power, and — today — broadband. That means spending money on schools, higher ed, and infrastructure.

      We can’t have the lowest taxes in the country, since places like Texas, Mississippi, and so on have already nailed that down, at the expense of having the worst schools and health care in the country. We can, as the recent CNBC and Forbes rankings show, be leaders in providing a good workforce and a modern and well maintained infrastructure. We can also use our natural environment and — if we work at it — our high quality public education to attract additional high quality workers.

      That is much more important than taxes or even locally available capital. We have, of course, already tried tax abatements and exemptions and public financing up here, with decidedly weak results, as you and others have already pointed out.

      We can enter into a futile race for the bottom by trying to cut taxes and regulation more aggressively than other places that have made that their brand, at considerable expense to their citizens, or we can use those taxes to invest in our future. That is working very well right now elsewhere in Minnesota, and we can do it here if we want.

  5. Gerald S says

    And, by the way, what New York City has done is not attracted the same businesses back, but attracted new and different ones. New York was once the leader in light manufacturing, to the extent that at one time over half the manufacturing in the US was done there. It was also the leading port in America. Those days are gone. But it is attracting businesses that need high skilled workers by having a place that high skilled workers want to live. Tech and other information intensive industry, including finance, have found that young workers prefer living in NY rather than in Greenwich, CN, or Dallas. New York does offer tax incentives and finance incentives — everybody does, including us — but actually has a pact with Connecticut and New Jersey to not compete with each other by trying to undercut with financing and tax credits. What businesses have found is that they do better in attracting the employees they need if they are in NY City. I have just visited in New York, where a friend has an apartment in the Village. IBM just opened a new center a block from him to create a home for its “Watson” supercomputer, building a new building that takes up a square block. The high tech 20 somethings they are trying to hire like working where they can walk down the street to the clubs, restaurants, and theaters jammed with other well educated 20 somethings.

    Obviously, the Range is not going to rival the East Village for that sort of thing. What it can do, however, is offer a beautiful environment with recreation right outside the door that ordinarily would require a vacation trip , clean air and water, much lower housing costs, easier commutes, and — if we make the effort — high quality schools and higher ed for their kids without spending a fortune on private schools. We may need to grow the twenty somethings ourselves right here with that education, or get some from other Midwest states, but we could be in a great position to attract the high skilled thirty somethings and their families. In fact, my NY friend is facing the possibility that both of his kids may bail out of NY to look for places where raising a family is easier and more affordable and life less hectic. Play our cards right, and we could be that place.

  6. If Texas is racing to the bottom we need to jump on board, they are creating more jobs than any State in the union. It sounds wonderful to say pay more here, be less profitable (most start ups fail in 1st few yrs), enjoy our lakes and be happy- we are trying that now and those start ups are going to Texas. Small businessmen need financial help getting going so they can make it past those 1st few years, we have the ability to do it here but for some strange reason don’t or probably more accurate can’t with our current system.
    We had better get past “it is your privilege to start a business up here” and start understanding how to compete for businesses to come up here.

    • Gerald S says

      Subtracting the jobs “created” in the energy industry, the majority of jobs created in Texas in the last decade are minimum wage jobs, with the majority of those held by immigrants, including large numbers of illegal immigrants. Texas K-12 ed ranks 48th in the country in outcomes, and Texas has the largest number of children and the largest percentage of children without health insurance in the country. Not surprisingly in view of that, Texas has the worst statistics in the country for childhood illnesses, for lack of vaccination, and is near the worst in infant, child, and maternal mortality.

      Plus, statistically businesses that depend on better trained and educated workers actually make more money and have lower failure rates than businesses that depend on poorly educated low skill workers. Minnesota businesses actually have lower failure rates than Texas, and make larger profits. Minnesota citizens actually make more money per capita AFTER paying our taxes than residents of low tax paradises like Texas, Mississippi, and even Kansas, Indiana, and Wisconsin.

      You get what you pay for.

      Minnesota is a bad place to start up a sweatshop, but a good place to start up a high value added business.

  7. There are more businesses moving to Texas than any other state. If Texas was a country they would have one of the best GDP’s in the world. You don’t get that number with minimum wage jobs. Manufacturing has exploded and there are good paying jobs for thousands and thousands of Texans. That can not be disputed….. I’m sure when a start up or one of thousands of existing businesses that are fleeing California (taxed out) and all the other business unfriendly states (high taxes, over regulated) we can tell them you won’t be profitable here on the Range but you’ll be a happy broke business person. Maybe we could sell them on the fact that in St. Louis county they’ll be eligible for many state/fed benefits after they go broke…. We are trying the old “you’re lucky to be here” business approach and the Range is suffering, let’s try to be business friendly and get jobs up here!!! What we are doing IS NOT working, what Texas IS doing is working- you don’t need a degree in economics to see that!!!!

  8. Texas has a really interesting economy. From a Fox News point of view of reporting raw statistics it appears to be working very well, or at least was up to the current oil bust, but more detailed analysis by people with degrees in economics show that it is not working nearly as well as gross statistics might suggest.

    It is a huge state and lots of things are happening, but statistically there are two main drivers of the economy. The first is the oil and gas business, which was a major positive driver in the last decade as the impact of fracking, lateral drilling, and other new techniques combined with historically high international prices to cause a major boom and create hundreds of thousands of good paying jobs for blue collar workers. The second is the state’s rapid population growth, which drives retail, services of various sorts, and so on. Although the population growth does get a significant component from in-migration from other states, the major source of in-migration is from Latin America, and child bearing rates among Latino families create a second population driver. The jobs created by this population growth include some good paying jobs, but the majority are low paying service jobs. In many sectors those jobs are held almost entirely by immigrants, and substantial numbers of those immigrants do not have legal status. Consequently, although Texas does have creation of good paying jobs in the oil and gas industry and in other industries like the tech industry centered in the Austin area or the health care industry in Houston, if the oil and gas boom jobs are subtracted — and the government of Texas has no more impact on the oil and gas boom than the government of Iran does — the majority of the balance of job creation is in minimum wage jobs — something like 53%. The presence of a large pool of workers willing to work for minimum wage or less does create an incentive for companies that use unskilled labor to open operations in Texas, which perpetuates this cycle.

    And, as I say, the tax rates in Texas have led to some of the worst education and health care statistics in the country (while of course Minnesota consistently ranks in the top three and frequently first in those measures.) This in turn creates a significant drag on the creation of good paying jobs and contributes to ongoing expansion of low paying jobs.

    In some ways, minus oil and gas the Texas economy resembles a third world nation, with a small minority doing very well but large numbers doing quite poorly. Bangladesh has enjoyed excellent job and industrial growth in the last few years also, literal collapse of factory buildings notwithstanding.

    And, by the way, although California was hit especially hard by the housing bust and recession in 2007-2009, its economy has recovered nicely and now ranks consistently among the top states for growth. And, like Minnesota, median incomes are considerably higher than Texas, and job growth is much stronger in good paying jobs. (I will admit that I have not seen any data on the economic impact of the current drought in California, but have also not seen data on the impact of the oil bust or its own weather problems in Texas.)

  9. Saying that without oil and gas Texas is a 3rd world country is like saying without a person’s money and property he is broke!! Texas does have oil and gas and they use their natural recourses to employ hundreds of thousands of Texans to great paying jobs, hint, hint Minnesota. California is well behind Texas in start ups and job creation but then again every state is. Manufacturing jobs are being created by Texas at a rate double the national average.
    Is it too hard for die hard liberals to admit Texas is the gold standard in the USA as far as good job creation is concerned. If a liberal state were doing as well as Texas the Dems would be touting it as a Mecca. If I could put a roof over my families head, food in their stomachs and clothes on their back I would think that is a state to live in.
    For the 100th time, what we are doing up here on the Range is not creating good paying jobs. No one in their proper state of mind can argue that. Texas is producing good paying jobs, not just in oil and gas, but in manufacturing, cattle, high tech and many other areas. Possibly if we look at what they are doing and stop turning our noses up because they are not as good as us in some way or another, we may be able to attract jobs up here and help out our fellow Rangers.
    Just can’t be that hard!!

  10. Gerald S says

    Ken —

    Regarding the Texas economy, you are missing the point. In assessing whether there is a lesson for other states in the way Texas operates, it is clear that an economic plan cannot begin with “first, let’s discover trillions of dollars worth of oil and gas.” Consequently, in measuring applicability elsewhere economists must try to remove the affect of the energy industry and assess what is left. Unfortunately, what is left is a minimum wage economy with an education and health care system that is among the worst in the country and a business sector overwhelmingly weighted toward very low skill minimum wage jobs, leading to very low median incomes, huge amounts of poverty, and a workforce not prepared to step into 21st century jobs. That is the lesson Texas has to offer us. Basically, Texas without oil and gas is a bad version of Mississippi.

  11. Only because I am bored before I go to bed, I will reiterate that Texas has double the nation average for new manufacturing jobs. That is twice as much as an average state like Minnesota has. Their medical community in Houston is 2nd to none employing thousands of folks, they have wind and solar stations there along with oil/gas, Austin has a ton of new high tech plants going up, they lead the nation in job growth, their success as a job creating state is the best in America. They are nothing like Mississippi. We can learn from them or we can be New York, New Jersey and a ton of liberal states and chase jobs away.
    I take it you are fine with the Range and it’s record as a job producer. Most of us want better and when you want to do better you emulate the best.

  12. Ken, I already said that Austin is a leader in new high tech development and that Houston is a leader in health technology. But Texas is a huge state with a huge population, and those highlights need a denominator to make sense of them. The fact is that they are a drop in the bucket, and that most of the “new manufacturing” is low tech, low skill, low wage operations. Minus oil and gas, Texas expansion is overwhelmingly in low wage and minimum wage areas and, combined with education and health care that is among the worst in the nation, this all leads to a quality of life that is significantly worse than Minnesota, average earnings and take home significantly lower, and a state that overall, for its millions of residents, offers a life in the same range as the lives of those in Mississippi. Mississippi, of course, has its bright spots too.

    And the volatility of extraction economies is making things a lot worse right now during the oil and gas contraction.

    India has a tech industry and a pharmaceutical industry that are among the top in the world, expanding much more rapidly than the US. There are more people in India who earn over $200,000 a year than there are in the US. But for the overwhelming majority of Indians life is miserable. Economies that stress the needs of the elite over the needs of everyone result in that kind of country. Texas has chosen to pursue that course, for whatever reason, with predictable results that have been cushioned in the last few years by the oil and gas boom, a boom that if it does not end now, will definitely end in the foreseeable future. That will leave a divide in Texas as big as the Grand Canyon, with a few people doing very well, and most people doing very poorly.

    If you believe that is “the best” and that we should emulate it, so be it.

  13. Gerald, please answer one question, is what we are doing up here with IrRRB taconite tax money working?
    I spend winters in SE Texas, it is a vibrant thriving area. Your depiction of Texas is totally wrong. Try to get past your liberal views that success is bad and we have to rely on Government to save us. They laugh at those ideas in Texas, very independent folks down there, might be why they lead country in job growth.

  14. A view of Texas from a retirement community is way different from the view of Texas from up the Rio Grand Valley, or from East Austin, or from the Third Ward in Houston. That is my point. Texas is a very different place for people like you, me, and my brother who lives there than it is for millions of Texans trapped in low income lives with poor education, poor infrastructure, and poor health care.

    And you don’t have to remind me that many Texans laugh at that fact.

  15. I missed your answer to my question.

    • Since that’s the question you keep asking in every thread, and you have had my answer many times, I assumed it was just rhetorical.

      To remind you, the answer is we really don’t know. We know that the results have not been what we would hope for in our best projections, but we don’t know how bad things would be if the IRRRB had not done what it has done. Perhaps the reason the Range is not another Detroit is the excellent work the IRRRB has been doing. Perhaps it has not had any affect. The answer demands a counterfactual, and since we can’t step into an alternate universe, the correct answer is we really don’t know.

      BTW, in the last few years Texas has not had the best growth of jobs or economy. That honor belongs to North Dakota — the denominator thing again. Texas leads the list in raw numbers, but not percentage, which is a more meaningful fact. In raw numbers, Texas actually fell to number two this last year, when the combination of the pace of California’s recovery and the impact of the oil collapse on Texas dropped Texas a notch. North Dakota is, of course, falling out of bed this year, its entire history an illustration of the whole extraction economy story.

  16. North Dakota is another Republican lead state with oil and gas, must be a bad place to live in your world? If we don’t know that IRRRB has been a terrible steward of the taconite tax by now we do not stand a chance up here. Saying we don’t know it could’ve been worse is total liberal babble. If you would have told the politicians in the 1965 that we would have spent Trillions on the war on poverty by 2015 and the number of folks dependent on it would be at an all time high, even they would say it was a failure. Remember it was said if we throw money at the problem we will solve poverty. Just throwing money at problems doesn’t solve them, better policies and capital will help but you have to have a plan. I was a liberal back then pushing for welfare programs, 50 yrs later it’s obvious I was wrong. Just like the IRRRB throws money but there are not any results to speak of, at some point even the most staunch DFL’ers will have to admit the current IRRRB tactics are not working. Admitting you are wrong is ok, even a bit liberating. But I guess it could always be worse!!!

  17. A state can have great success in attracting many businesses with large job growth but that doesn’t automatically correspond with benefiting or improving overall quality of life in that state. Is a huge business boom a real success story if a state doesn’t also see the effect of smaller numbers of people living in poverty or near poverty, lower to medium wage workers having greater spending power and economic security?

    Many southern and other states have the lowest levels of academic achievement, work safety, wages, affordable housing, highest levels of poverty, people with highest rates of obesity, diabetes, heart and other major health issues, people with no healthcare coverage, toxic industries with little oversight located near schools, in neighborhoods and populated areas, air pollution along with high divorce, teen pregnancy rates, etc. Tons of jobs even if they do pay livable wages is just one factor in what makes a state a great place to live and bring up a family. In 2011 tax cuts in Texas blew a $5.6 billion hole in the school budget leaving districts scrambling for basic supplies. Same story in Kansas with many schools closing and teachers leaving in droves for jobs in nearby states. I’m grateful to have lived in MN all my life, raised our kids here vs many other states.

    We all see the world through the lens of our own life experiences but we should be able to realize that
    others have vastly different, difficult experiences no matter how they “play by the rules” and why. It really is myopic to live in a retirement community or any other bubble social group and assume one knows how the vast numbers of people outside one’s circle live.

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