Minneapolis-St. Paul Economy: Healthcare, Retail, and Cold-Climate Tech

The Minneapolis-St. Paul metro area — formally Minneapolis-St. Paul-Bloomington — is the largest metro economy in the Upper Midwest and one of the most diverse in the country by industry mix. It is anchored by an unusually large concentration of Fortune 500 headquarters for a metro of its size, a healthcare and medical-device cluster that spans the Twin Cities and the Mayo Clinic in nearby Rochester, and a long history of agricultural and food-processing companies built on the surrounding farmland.

This is a plain-English tour of how the Twin Cities metro economy works. For the state-level picture, see Minnesota Economy. For the country-level view, see The State of the U.S. Economy and the broader Economy hub and city cluster.

How big is the Twin Cities metro economy?

For example, recent metro GDP for Minneapolis-St. Paul-Bloomington has run around $310 billion, according to the Bureau of Economic Analysis. Metro population is roughly 3.7 million, per the U.S. Census Bureau. That makes the Twin Cities metro larger by population than 22 of the 50 U.S. states.

The biggest industries

A handful of sectors do most of the work in the Twin Cities metro economy:

• Healthcare and medical devices — UnitedHealth Group is headquartered in Minnetonka, Medtronic and Boston Scientific anchor a global medical-device cluster, and the broader system stretches south to the Mayo Clinic in Rochester.
• Retail and consumer goods — Target is headquartered downtown Minneapolis, Best Buy is in Richfield, and General Mills, Hormel, and Land O'Lakes anchor a long food and grocery tradition.
• Finance and insurance — U.S. Bancorp, Ameriprise, Securian, and Thrivent run major operations in the metro.
• Manufacturing — 3M is headquartered in Maplewood, Polaris in Medina, and a long supplier chain serves the metro's medical-device, industrial, and consumer-goods firms.
• Agriculture and food processing — Cargill (in Wayzata) and CHS handle huge volumes of grain, meat, and food ingredients moving across the Midwest.
• Higher education — the University of Minnesota, the College of St. Catherine, and dozens of smaller schools anchor faculty and staff workforces.
• Tech and software — a quietly large enterprise-software cluster, plus the in-house tech operations at the metro's Fortune 500 firms.

Jobs and wages

Metro labor data is published by the Bureau of Labor Statistics Midwest region. For example, the Twin Cities metro unemployment rate has typically run a tick below the national average, helped by the steadiness of healthcare and the metro's diversified industry mix.

The City of Minneapolis and the City of St. Paul each set their own local minimum wages above Minnesota's statewide rate, which is itself above the federal floor of $7.25. The latest rates live at the Minnesota Department of Labor and Industry.

Cost of living

The Twin Cities' cost of living tends to run close to the national average. For example, recent HUD Fair Market Rent for a two-bedroom in the metro has run around $1,700 a month, with downtown Minneapolis, Edina, and Wayzata higher and parts of the outer ring and St. Paul's East Side lower. Current county-level numbers are at HUD User.

The federal government tracks region-specific inflation data through the BLS Midwest region. The Twin Cities CPI tends to track close to the national average month to month.

Taxes in the Twin Cities

Minnesota has a progressive state income tax with rates among the higher tier of U.S. states. Combined sales tax in Minneapolis and St. Paul is around 9.025%, made up of the state's 6.875% base plus city, county, and transit pieces. Property taxes are moderate by U.S. standards. State rules live at the Minnesota Department of Revenue, and you can read more about how sales tax works in our glossary.

How the Twin Cities metro fits into the national picture

Few U.S. metros host as many Fortune 500 headquarters per capita as the Twin Cities. That concentration of corporate decision-making — across healthcare, retail, food, manufacturing, and finance — gives the metro an unusually broad base. When one sector slows, the others tend to pick up the slack, which is part of why the Twin Cities have ridden out national downturns better than many similar-sized metros.

A cold-climate tech story

The Twin Cities have built a quietly large tech workforce, much of it inside non-tech companies. UnitedHealth's Optum unit, Target's digital operations, U.S. Bank's technology division, and Best Buy's e-commerce arm together employ thousands of engineers, data scientists, and designers. The metro's lower cost of living relative to coastal tech hubs has helped retain that talent.

A note on the numbers

Numbers in this article change every quarter — always check the latest from BEA, BLS, and HUD User for the most current data on the Twin Cities metro.