Poverty down nationally, Minnesota takes steps for further progress

New Census information released today gives a snapshot into the economic recovery’s reach in 2013. The good news is that the national poverty rate fell in 2013 for the first time since 2006, although there was no significant change in the number of people living in poverty.

The data also show how policy choices at the national level made a difference in lifting millions of Americans out of poverty. Today’s data also underscore that Minnesota’s recent policy choices are on the right track towards greater economic security.

Poverty rates often are slow to decline after an economic downturn, so it is good news it finally started to fall in 2013. However, the U.S. economy needs to grow at a faster rate in order to replace the millions of jobs lost in the Great Recession and respond to new people joining the job market. In 2012-2013, 14.7 percent of Americans and 11.0 percent of Minnesotans lived in poverty. In 2013, this meant that a family of four had an income below $23,834.

The number of Minnesotans without health coverage was around 440,000 in 2013, or 8.2 percent, about the same as in 2012. We can expect the number of Minnesotans without health insurance to fall in 2014 because of policy decisions that went into effect this year, such as covering more Minnesotans under Medicaid, continuing affordable health care for working families through MinnesotaCare, and creating our own state-based health insurance exchange, MNsure.

While the data show that still too many people in Minnesota and across the country are unable to afford the basics, the new information demonstrates the success of policies to lift families out of poverty. For example, the federal Earned Income Tax Credit lifted 5.5 million Americans – including 2.9 million children – out of poverty in 2012.

Minnesota is building on this success story. In the 2014 Legislative Session, policymakers increased Minnesota’s version of the Earned Income Tax Credit, called the Working Family Credit, by about 25 percent. The Working Family Credit helps more than 330,000 working families to get by on low wages.

The data released today show other policy measures were effective at lifting Americans out of poverty in 2013, including:

  • 3.7 million Americans who received basic food assistance through SNAP.
  • 14.7 million American seniors through Social Security.
  • 1.2 million Americans through Unemployment Insurance.

The Census Bureau will release more Minnesota-specific information on incomes and poverty on Thursday, so be sure to stay tuned for our analysis.

-Clark Biegler

About Clark Goldenrod

Clark Goldenrod is the Minnesota Budget Project's policy analyst.
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