Minnesota Census Takeaways: Incomes Rise, Poverty Falls, Disparities Persist

American Community Survey data released today shows that Minnesota has continued to make progress in the past year and that we have still have work to do to be a state that works for all Minnesotans.

On the positive side, Minnesota continues to have income growth.1 Incomes in Minnesota continue to be high relative to the country as a whole. Compared to our neighboring states Minnesota has higher incomes and robust growth.

Minnesota also continues to enjoy low poverty rates relative to the rest of the country. Not only does Minnesota have the third lowest poverty rate, we also continue to make progress in reducing poverty. This year Minnesota saw a 0.4% reduction in the poverty rate which may not sound large in the abstract but represents 15,800 fewer Minnesotans living in poverty than last year.2

Not everybody shares in Minnesota’s prosperity. We still has over half a million people living in poverty including 149,926 children under 18.3

Minnesota also continues to have vast disparities in poverty between white households and households of color. For example the poverty rate for both American Indian and black Minnesotans is quadruple the poverty rate for white Minnesotans.4

Concerted efforts to address economic and employment disparities are paying off for Minnesotans. The overall trend for poverty among people of color is Minnesota is down since 2012, even taking into account some year over year variability. For example despite an uptick this year, the poverty rate for Latino Minnesotans declined by a about quarter between 2012 and 2017 from a high of 25.7% to the current rate of 19.0%.5 Particularly striking is the decline in poverty for black Minnesotans between 2014 and 2017 from 37.5% down to a current rate of 28.2%. While the decline this year was slower than we saw in the past several years the trendline shows that progressive policies and programs that provided support for targeted training, education, and employment continue to pay off for Minnesota’s economy.6

It is also striking how many working Minnesotans experience poverty. Last year 186,714 people who worked at least part time experienced poverty. Year-round, full-time employment is a significant factor in reducing poverty – for people over 16 who had year-round full-time employment the poverty rate was 1.5% compared to 13.5% for workers who were employed part time or seasonally.7 While the job market in Minnesota is robust, providing a large number of potential employment opportunities, currently about 41% of job openings are part time.8

Poverty can be a useful tool for understanding trends in our economy, but it is also a limited measure of whether Minnesotan are thriving. Currently the poverty measure for a family of four is $24,858.9 According the to the Economic Policy Institute’s Family Budget Calculator, a household of this size in Hubbard County would need to make $78,149 to achieve an adequate standard of living or roughly 300% of the poverty measure.10 By this standard, there are about 1.5 million people in Minnesota who are not in poverty, but are below an adequate standard of living – or about 30% of Minnesotans.11

Minnesota is making progress but still has a long way to go. Continuing the policies that have allowed our economy to grow, supporting policies that encourage high quality living wage jobs,  and increasing support for focused efforts to address employment and income disparities will help us become a state that works for everyone.

 

1 U.S Census Bureau, 2002-2017 American Community Survey Adjusted by CPI-U-RS, analysis by EPI
2 U.S Census Bureau, 2017 American Community Survey, 1-Year Estimates
3 U.S Census Bureau, 2017 American Community Survey, 1-Year Estimates, Poverty Status in the Last 12 Months
4 Ibid.
5 U.S. Census Bureau, 2007-2017 American Community Survey, 1-Year Estimates, Poverty Status in the Last 12 Months
See for example Laws of Minnesota 2016, Article 12 providing $35m in appropriations for equity initiatives including grants and procurement incentives.
7 U.S. Census Bureau, 2017 American Community Survey,1-Year Estimates, Poverty Status in the Last 12 months
DEED, Job Vacancy Survey, https://apps.deed.state.mn.us/lmi/jvs/Results.aspx 
9 U.S. Census Bureau, Poverty Thresholds by Size of Family and Number of Children, 2017
10 https://www.epi.org/resources/budget/
11 U.S. Census Bureau, 2017 American Community Survey, 1-Year Estimates, Poverty Status in the Last 12 Months