Poverty Rises Significantly in Minnesota, Median Income Falls

Public Supports Can Help Family Budgets Recover

St. Paul, Minn., Sept. 28, 2010 – U.S. Census data released today shows that the percentage of Minnesotans living in poverty rose to 11 percent in 2009, a significant increase from pre-recession levels. The effects of the recession were widespread in Minnesota, but people of color and children were particularly impacted.

“Although there was a significant increase in poverty among non-Hispanic whites in Minnesota, the most concerning news continues to be the huge racial disparities in our state,” said Christina Wessel, deputy director of the Minnesota Budget Project. “We also saw thousands of additional Minnesota children fall below the poverty line during the recession.”

The numbers are dramatic – more than one in three Blacks and American Indians living in Minnesota fell below the poverty line in 2009. The increase in poverty, however, was strongest within Minnesota’s Latino community, where the poverty rate increased by four percentage points between 2007 and 2009. For non-Hispanic whites, the poverty rate reached eight percent in 2009, a one percentage point increase from 2007. In 2009, a family of three would have had to earn less than $18,300 to be considered living in poverty.

Minnesota’s children also experienced a sharp increase in poverty during the recession, with the child poverty rate reaching 14 percent in 2009. That increase meant approximately 25,000 additional children fell below the poverty line between 2007 and 2009, a two percentage point increase.

Median Income Falls as Most Minnesotans are Hit by Recession

Median household income in Minnesota fell by two percent between 2008 and 2009, according to the latest Census data, demonstrating that the effects of the recession were felt by most families. Minnesota’s median household income dropped to $55,616, which was still above median household income at the national level.

“Median household income, in addition to poverty rates, is statistic where we can see the impact of a historic lack of access to educational and employment opportunities on our communities of color,” said Wessel. “Although white Minnesotans have experienced a drop in median household income during this recession, most communities of color were behind long before this recession began.”

The median income for Black, American Indian and Latino households in Minnesota was significantly lower than the median income in non-Hispanic white households in 2009. And the median income for Black households in Minnesota ($26,930) even falls below the median household income for Blacks on the national level ($33,463).

The Road to Recovery Must Include Public Supports

The numbers present a growing challenge to those leaders who want to build strong families, healthy communities and a sound economy. In a recession, the pressure builds as the need for public services increases while revenues are falling.

“We know that the state continues to face large budget shortfalls, but reducing or eliminating state services to balance the budget will not help us move forward from this recession. Continuing cuts in services means more job losses, a greater strain on remaining public services and higher poverty. It leads to a cycle where families can’t get help when they need it most,” said Wessel. “We can help our communities recover from the recession, and that means raising revenues to help balance the budget and maintain investments in education, health care and job training.”

Additional Information

For more information, see the Census Bureau’s American Community Survey.

For information on trends examining the economic well-being of Minnesotans, visit Minnesota Data Trends.

The Minnesota Budget Project, an initiative of the Minnesota Council of Nonprofits, provides independent research, analysis and advocacy on budget and tax issues emphasizing their impact on low- and moderate-income Minnesotans. The Minnesota Council of Nonprofits (MCN) is the statewide association of 1,950 nonprofit organizations. Through its website, resource publications, workshops and events, cost-saving programs and advocacy, MCN continually works to inform, promote, connect and strengthen individual nonprofits and the nonprofit sector.

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