Advertisement
The surveys show that more Minnesotans live in poverty now, at the end of the economic expansion, than in 2001 when the state was struggling out of a mild recession.
The reports also show that more Minnesotans now live without health insurance than in 2001. Minnesotans’ median household income also slipped a bit during six years of overall economic growth.
But Minnesota remains relatively well off. The state ranked 10th in the country, with a real median household income last year of $55,802. By comparison, Wisconsin, at $50,578, ranked 21st.
The Census Bureau results released Tuesday were “very disappointing,” according to Katherine Blauvelt, a policy analyst at the Minnesota Budget Project, a nonpartisan tax and budget think tank that’s part of the Minnesota Council of Nonprofits.
Blauvelt said the six-year downdraft in Minnesota is not unique but representative of the country. Most of the gains went to the highest-income Minnesotans, she said.
“Workers worked smarter and harder all throughout this decade — productivity was up — but most Minnesotans did not get the benefit of the economic growth,” Blauvelt said. “We now know that economic growth on its own does not mean Minnesotans are better off.”
The state’s rising poverty was not news to Mark Peterson, chief executive officer of Lutheran Social Service of Minnesota. Peterson’s organization is opening 48 units of affordable housing in Minneapolis’ Phillips neighborhood next week and has received more than 1,000 applications for them, he said.
Art Rolnick, senior vice president and director of research for the Federal Reserve Bank of Minneapolis, said he’s cautious of the findings and thinks the concern about the stagnating middle class is misplaced.
Rolnick said the Census Bureau focuses on cash wages when it calculates household income and doesn’t include many other types of contributions employers make to worker well-being, such as payments to pensions or insurance funds, Medicaid, food stamps and energy assistance.
If all that “missing income” is included, Rolnick said, Minnesota’s median household income actually rose 7.3 percent between 1999 and 2007.
Rolnick acknowledged that increase is not healthy growth and falls short of what might be expected coming out of an expansion. But the biggest problem found in the Census Bureau data is the rise in children living in poverty, he said.
According to the Census Bureau, 12 percent of Minnesota’s children last year, or about 143,000, were living below the poverty level. That’s up from an estimated 9 percent in 2000, Rolnick said. The Census Bureau defines poverty in the state as a family of three earning less than $16,689.
“We know that kids living in poverty on average are the ones that start school behind and end up dropping out of school,” Rolnick said. “Long term, this has a major effect on economic development. That should be the red flag.”
