Minnesota is bright spot in poverty picture

08/31/2005

David Peterson,
Star Tribune
August 31, 2005

Poverty in Minnesota is holding steady and may be shrinking slightly even as immigrants pour into the state and as poverty nationwide is on the upswing, the U.S. Census Bureau reported Tuesday.

Minnesota was the only state to rank first, or in a statistical tie for first, in all three key measures released Tuesday. It had the lowest percentage of poor people, the highest average household income and the lowest rate of residents without health insurance.

Nationally the news was more sobering.

The number of Americans in poverty rose to 37 million in 2004, up 1.1 million from 2003 and the fourth straight increase in the government’s annual poverty measure. Household income remained flat, and the number of people without health insurance edged up by about 800,000, to 45.8 million.

A range of responses

Minnesota’s standout status drew a mixed response here.

A leading spokeswoman for the state’s largest immigrant community called it a moment to relish at a time when many have noted a rise in anti-immigrant feeling.

“This proves what we’ve said all along, that immigrants come to the state to work,” said Ytmar Santiago, executive director of the state’s Chicano Latino Affairs Council. “Often it means working two or three jobs.”

Others emphasized, however, that low poverty rates don’t mean there are no poor people.

Despite the glowing statistics, the Minnesota Council of Nonprofits warned, “Thousands of Minnesota families are unable to make ends meet.” The state is going backward in health insurance, it added, with 77,000 fewer people covered in 2004 than in 2001.

Poverty amid wealth

Minnesota’s wealth owes a lot to its being a great location for people who could live anywhere, said Gregg Anshus, a windsurfing enthusiast who serves as vice president and chief financial officer of Waters Instruments, a high-tech firm based in Plymouth.

He himself, he said, “cherishes” trips to the cabin, “turning off the cell phone and getting reconnected,” but also finds Minneapolis “very exciting, with a tremendous amount of activities on any given night.”

But Susan Reyes, a disabled tenant activist who lives in a subsidized apartment at the Calhoun Beach Club in Minneapolis, said it can feel strange to be poor in such a prosperous state.

“I feel so blessed to have this place, with its view over the lake,” she said. “I can walk out at night and see the night sky. I didn’t feel safe doing that in the building I lived in before this.”

On the other hand, she said, there is always a certain undercurrent of hostility. “We’re pretty invisible here. The market-rate tenants here who know about us, some aren’t happy about it—they see that we’re getting something they’re not getting.”

The income gap

The Census Bureau reported that even nationally, income inequality didn’t worsen over the past couple of years. But U.S. Rep. Martin Sabo, a Democrat who represents Minneapolis and some of its suburbs, issued a statement noting that “the disparity in household income between the top, middle and bottom is still the largest on record.”

A minimum-wage worker would have to work 11,660 years to earn as much as Yahoo Inc.’s CEO did in 2004, he said, and he is promoting federal legislation aimed at limiting tax deductions for salaries of the highest-paid executives.

Nationally, the Census Bureau reported, Asians were the only ethnic group to show a decline in poverty—from 11.8 percent in 2003 to 9.8 percent last year. The poverty rate for whites rose from 8.2 percent in 2003 to 8.6 percent last year. There was no change for blacks and Hispanics.

Charles Nelson, assistant Census Bureau division chief for income, poverty and health statistics, said the nation’s four-year rise in poverty echoes previous recessions: The poverty rate rose for four years following the 1991 recession, for instance.

Ron Haskins of the Brookings Institution, a Washington think tank, said that even as the Census Bureau reported that private health coverage fell, coverage expanded for youngsters in low-income families through Medicaid last year. Congress and the states plan to pare billions from Medicaid this fall.

The Census Bureau’s survey found that median household income in Minneapolis ($44,116) ranks among the top third—20th—among the nation’s 70 cities with populations over 250,000. St. Paul ($38,731) ranks 41st.

Among the 236 counties with populations that large, suburban Dakota and Anoka Counties ranked 22nd and 49th, respectively, while Hennepin ranked 74th and mostly urban Ramsey, 144th.