Economic recovery is not reaching all Minnesotans

Despite a rise in productivity in the U.S. economy, we aren’t seeing much growth in wages. In fact, many Minnesota workers don’t earn enough to support a family. We sort through the data in our latest report, For Many, Hard Work is Not Enough: The State of Working Minnesota 2015.

Even six years into the economic recovery, too many Minnesotans are struggling to support themselves and their families. Minnesota workers are earning about the same as they did 15 years ago, after adjusting for inflation. That’s despite economic growth that could have fueled wage gains, since national productivity has increased by 21.6 percent since 2000.SWM wage percentiles-01

Over a longer time span, the benefits of economic growth have gone largely to those with the highest incomes. High-wage workers saw their earnings grow by 21.3 percent since 1979, in inflation-adjusted terms, while low-wage workers’ wages only grew by 5.4 percent. This has contributed to worsening wage inequality in Minnesota.

Stagnant wages have not kept up with the cost of living, and many Minnesota workers are not earning enough to support a family. A typical Minnesota family of three needs to earn $16.34 an hour to meet their basic needs, but there aren’t enough good jobs that pay these wages. More than half of Minnesota workers without a college degree made less than this wage.

As we were reminded last week, people of color in Minnesota have not had access to the same opportunities as white Minnesotans. These Minnesotans are more likely to be unemployed or underemployed, and earn less. With Minnesota’s tightening labor market and a labor shortage on the horizon, we need to tap into the skills and abilities of this important and growing part of our workforce.

More workers will benefit from the economic growth they help create if we have public policies that strengthen job quality, ensure Minnesotans can get the education and training they need and can get good jobs, and help low-wage workers make ends meet and move into the middle class.

We can take specific steps, including:

Stagnant wages and growing income inequality threaten our state’s economic success. Making hard work pay off and broadly sharing the benefits of economic growth are critical to ensuring a strong future for all of us.

-Clark Biegler

About Clark Biegler

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