Minnesota beats national figures, but prosperity still out of reach for many

Minnesota is among the top ten states in terms of incomes, but that above average performance is not reaching all communities. That’s according to new data from the U.S. Census Bureau. Today’s Census data confirms that incomes are substantially lower and poverty more prevalent in Minnesota’s communities of color. While the economic gap between white Minnesotans and communities of color is wide, there has been some improvement in poverty among black and American Indian Minnesotans.

We mentioned on Tuesday that while the nation’s economic recovery has been slow, the national poverty rate finally started to decline in 2013. Minnesota continues to do better than the rest of the nation. In 2013, our median household income increased to $60,702 and our poverty rate was 11.2 percent, both substantially better than the U.S. figures of $52,250 and 15.8 percent.

Minnesota’s continued economic strength depends on all Minnesotans having the opportunity to support themselves and their families. However, some communities have not shared in the state’s success. Black, American Indian and Latino Minnesotans earned significantly less than white Minnesotans in 2013.

Communities of color also experienced much higher poverty rates than white Minnesotans. In 2013, one in twelve white Minnesotans lived in poverty, while one in three black and American Indian Minnesotans, one in four Hispanic Minnesotans and about one in six Asian Minnesotans lived in poverty. To put that into perspective: a family of four was considered living in poverty in 2013 if their income was below $23,834.

This picture is grim, but the new numbers show that Minnesota’s reality can change. While still very high, the poverty rate for black Minnesotans decreased by five percentage points from 2012 to 2013. Analysis from our State Demographer shows that poverty also decreased for American Indian Minnesotans since 2011.

2014 acs blog table

Today’s data is helpful in understanding the different experiences of racial and ethnic groups broadly defined. But when substantial numbers of people are grouped together, the variety of individual experiences can be lost. For example, Asian Minnesotans as a whole have a median income that’s about the same as white Minnesotans, but they also have a higher poverty rate. Some Asian Americans are doing extremely well, but many aren’t earning enough to make ends meet.

To build the strongest economic future, we’ll need all Minnesotans to be able to reach their fullest potential in the workplace. Wise policy choices can make a difference in moving towards this future.

In the 2014 Legislative Session, policymakers improved the Working Family Credit, providing an important boost for people working at lower wages, as we mentioned on Tuesday. Policymakers also responded to years of stagnant wages by increasing the minimum wage, which will reach $9.50 by 2016. As a result, 325,000 Minnesotans will see a boost in their earnings. The minimum wage increase can make a dent in the wide income gap between white Minnesotans and people of color. The JOBS NOW Coalition found that almost one in three Hispanic workers in Minnesota and about one in five black workers would see higher wages when they studied a minimum wage increase similar to what passed this year.

Today’s new information tells a familiar story. Minnesota continues to exceed the national averages, but too many Minnesotans are still falling behind. As Minnesota enjoys greater diversity, it is even more important for our state’s future to take the steps needed to close our racial economic gaps. By expanding opportunity and building ladders into the middle class, our state will truly beat the averages.

-Clark Biegler

About Clark Biegler

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