Minnesota Poverty: Still better than Mississippi's!

This decade has not been kind to low-income Minnesotans.

According to new U.S. Census data analyzed by Lutheran Social Service and the Minnesota Budget Project [PDF], Minnesota lost ground in poverty, health care coverage and household incomes during the six-year economic recovery that lasted from late 2001 through 2007.

Minnesota is one of 24 states that saw its overall poverty rate worsen since 2001. Nearly one in ten Minnesotans, or 9.5%, lived in poverty in 2007. This is significantly higher than the 2001 poverty rate of 7.8%. Nationally, the poverty rate was 13.0% in 2007, which is also significantly above the 12.1% rate measured in 2001. Remarkably, the poverty rate was higher after six years of economic recovery than during the 2001 recession.

Still, could be worse. Minnesota ranked only 44th among the states on poverty, compared to number 1 Mississippi at 20.6%.

Last year when these figures were released, the Bush Administration heralded a down-tick in the national poverty rate from the previous year, from 12.6% to 12.3%. At the time, The Christian Science Monitor noted that the reported number might not provide a true picture of economic turmoil in America [emphasis mine]:

The bureau's poverty rate measures a snapshot in time. Some experts say that focus masks a significant increase in economic instability for Americans that makes more people in the middle class vulnerable to poverty. That's because while the percentage of people in poverty at a given time may be declining (it's fluctuated between 10 and 15 percent for the past 20 years), more Americans overall are experiencing poverty at some time during their lives than at any time during the past 30 years, according to a study done at Washington University in St. Louis.

The study found that in the 1970s, about 24 percent of people between the ages of 20 and 29 experienced poverty for a year or more. In the 1980s, that went up to 30 percent. And in the 1990s, it increased to 38 percent. The reasons, according to Mark Rank, one author of the study, are the increase in lower-paying jobs, employment insecurity, and significant decreases in health-insurance coverage.

In Minnesota, we're seeing the consequences of this instability — not just in poverty rates, but in rising unemployment, foreclosure rates and perhaps even in school test results and dropout rates. Whatever growth occurred during the last weak business cycle did not reach many Minnesota families.

According to the Minnesota Budget Project:

Minnesota households had a median income of $55,802 in 2007. This is significantly less than 2001’s figure of $58,363 (measured in 2007 dollars).

Minnesota is still better than average on all three measures noted in the analysis, but the trends are heading in the wrong direction, and the costs are falling largely on state and local governments already feeling budget pinches.

Cutting taxes won't do much to help feed families with marginal incomes, and putting more in the pockets of high earners doesn't directly address the employment problem — helping people develop the skills to find and hold jobs. But unless concerned Minnesotans speak up, cutting programs that aid the poor will be one reflexive response, and tax cuts will be the other. 

— Charlie Quimby