Poverty Rises in Minnesota

Two reports released this August by the U.S. Census Bureau contain information suggesting that from late 2001 through 2007 many Minnesotans struggled against a stagnant economy that disproportionately hurt lower income households. Data compiled for this recent six year span, a period of overall economic growth for the nation, shows that, in Minnesota, the poverty rate rose, household income declined, and a smaller percentage of the state’s citizens had medical insurance coverage. Those three measures (percentage of the population living at or below the poverty level, percentage of population without health insurance, and current median household income) serve as indicators commonly used to judge the economy’s impact on people at lower income levels.
As of 2007, 9.5% of Minnesotans lived at or below the poverty level as opposed to the 7.8% recorded for 2001; 8.8% of people in this state were without health insurance compared to 7.5% who went uninsured in 2001. Furthermore, the median household income, that income level at which exactly 50% of the households earn more and 50% earn less, fell, when adjusted for inflation, from $58,363 per year to $55,802. The U.S. Census Bureau’s reports suggest to many that the benefits of Minnesota’s expanding economy in the early years of this decade were unevenly distributed.
With regard to these findings, Katherine Blauvelt of the nonpartisan Minnesota Budget Project is quoted in the St. Paul Pioneer Press as saying that although “productivity was up (in our state)…most Minnesotans did not get the benefit of the economic growth. We now know that economic growth on its own does not mean Minnesotans are better off.” It may well be that over the past six years, in Minnesota, the rich grew richer as the poverty rate increased and fewer and fewer families could afford health coverage.
Among the more alarming findings of the Census Bureau’s reports is that in Minnesota, as of 2007, 12% of people under the age of 18, nearly 150,000 children, live below the poverty level. For Minnesota, the Census Bureau defines poverty as a family of 3 earning less than $16,689. In 2000, only 9% of children in our state lived in households with an income below that level. As Art Rolnick, senior vice president and director of research for the Federal Reserve Bank of Minneapolis, points out in the Pioneer Press, children in poverty “on average are the ones that start school behind and end up dropping out of school. Long term this has a major effect on economic development.”
Although Voices for Change remains steadfastly nonpartisan, it is hard to ignore the fact that the “economic slide” documented in the Census Bureau’s reports coincides with Governor Tim Pawlenty’s tenure in office. Minnesota, by any objective calculation, remains among the economically healthiest states in the nation. Despite the recent decline, Minnesota’s median income level ranks 10th out of the 50 states. Nonetheless, the current administration’s policy of reducing an inherited deficit while refusing to increase taxes may contribute to a situation where economic growth within the state fails to yield benefits to those at lower income levels. Moreover, under Governor Pawlenty, the state government reduced its support of social services, for budget balancing reasons, at a time when the states poverty level was increasing, the average income was falling and more people joined the ranks of the uninsured.
With the Democrats having completed their national convention in Denver and the Republicans having ended their convention in St. Paul, anyone keeping his or her ears open will certainly hear much discussion of policies designed to stimulate the economy, increase productivity and promote growth. Voices for Change believes it is important that our elected representatives and our prospective representatives, especially those seeking to represent us locally within our state, speak not only to questions of stimulating and expanding the economy; it is paramount, as well, that they address the issue of the unbalanced, inequitable distribution of the benefits of an “improved” economy.

2 Comments »

  1. Bob Watson said,

    Very, very insightful (or should I say inciteful). Everybody talks about the economy in terms of a rising tide that lifts all ships. That tide can drown those who aren’t in the boat yet

  2. good job


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