By – Jeff Tollefson, CEO, Minnesota Technology Association

Finally! Everyone is back to work in the Minnesota House of Representatives as the DFL and Republican caucuses worked out an agreement last week. As a result:

      • GOP leader Lisa Demuth was elected Speaker of the House and she will retain the job for two years. Melissa Hortman, who had been speaker since the DFL won control of the House at the 2018 election, is now “speaker emeritus.”
      • Rep. Brad Tabke, whom the GOP didn’t wish to seat because they didn’t like the outcome of an election challenge to Tabke’s 14-vote victory amidst some vote-counting irregularities, has been sworn in as an official member of the House.

This leaves Republicans with a 67-66 majority in the House but if the DFL wins a March 11 special election, which is widely expected because the district is heavily DFL, we will be back to our original 67-67 tie. As part of the revised power-sharing agreement there will be co-chairs of committees and mutual agreement for when bills pass committees and reach the House floor. As always, it will take 68 votes to pass a bill.

There you have it. With all legislators now fully engaged, the focus is on the multitude of committee hearings where new legislation is being introduced and discussed. So rather than reporting on the paralysis of government we experienced over the past month, we can finally start talking about issues of importance to MnTech members and our broader tech community.

The issue for today is related to AI and the workforce. I’m providing testimony this afternoon at a Senate Labor Committee hearing on this topic and sharing some highlights of what I intend to address. There is an organization called North Star Policy Action that will be presenting its report on the impact of AI on worker welfare, with its first policy recommendation being to strengthen collective bargaining rights that would empower workers to influence AI adoption in their workplaces, ensuring that technology complements their roles rather than replacing them.

I will be challenging that policy recommendation in my testimony and wanted to share the key elements of my remarks.

AI is already transforming the way we work and live and its influence will only accelerate. AI has the potential to enhance productivity and efficiency in nearly every sector of Minnesota’s economy—from manufacturing and healthcare to financial services and retail. And as a state facing a demographic drought as highlighted in the research report titled Minnesota’s Vanishing Workforce produced by Lightcast and the MN Business Partnership, we face a future with more expected job openings than available workers. AI can help bridge this gap by augmenting human labor, automating repetitive tasks, and allowing workers to focus on higher-value, problem-solving roles.

At the same time, we must acknowledge the challenges. AI will disrupt certain job categories, requiring workforce adaptation and reskilling. Some routine jobs will change or even disappear, and we must be proactive in supporting workers through upskilling and transition programs. However, history has shown that technology-driven job transformations most often lead to the creation of new roles and industries that we cannot yet fully predict, and Minnesota must position itself to capitalize on these opportunities.

It’s important to recognize that any AI policies that prioritize rigid labor protections over business competitiveness could unintentionally harm Minnesota’s economic future. While ensuring fairness in the workplace is important, policies that make AI adoption overly expensive or cumbersome for employers could potentially:

      • Drive Companies—and Jobs—Out of Minnesota – Businesses have choices about where to invest and grow. If AI regulations in Minnesota become more restrictive than in peer states, we risk losing not just jobs but also innovation, entrepreneurship, and tax revenue.
      • Reduce Minnesota’s Competitiveness for AI Investment – AI is a global race, and states that strike the right balance between responsible innovation and workforce adaptation will be the ones that attract and retain high-value industries. Policies that focus too much on restricting AI’s role in workplaces, rather than preparing workers to thrive alongside it, could make Minnesota a less attractive destination for businesses.

I will be reminding committee members that as policymakers, they play a critical role in ensuring a balanced approach to AI regulation. Rather than focusing on restricting AI’s impact through mandates and barriers, we believe elected officials should adopt a strategy that:

      1. Encourages innovation by making our state a hub for responsible AI adoption and business expansion
      2. Invests in workforce adaptation by supporting retraining programs, industry partnerships, and incentives that help workers adapt and transition into new AI-enabled roles.
      3. Is Risk Smart, not Risk Averse, addressing legitimate concerns such as algorithmic bias and data privacy with targeted, thoughtful policies rather than broad, reactionary restrictions.

Minnesota has an opportunity to lead—not by resisting and over-regulating AI’s evolution, but by harnessing its potential to strengthen our workforce and economy. We urge elected officials to take a more measured approach that encourages AI innovation while ensuring Minnesotans are prepared for the rapidly changing future of work.

Well, off to the Capitol. In my next legislative update, I’ll be covering a variety of topics including bills related to data center sales tax exemptions, restrictive employment covenants, computer science education funding, and more. If you have policy issues and concerns you would like to see MnTech address, please reach out to me at jeff@mntech.org.