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Minnesota's poverty rate is the second lowest in the nation, but the numbers may not tell the whole story
by Dan Olson, Minnesota Public Radio
September 26, 2003

Once again, Minnesota has the country's second lowest poverty rate. However, people who help the poor say the formula for calculating poverty is woefully out of date and Minnesota's real rate is probably double what's reported. The new U.S. Census Bureau poverty numbers released Friday showed nationally that poverty rose and incomes declined for the second year running.

St. Paul, Minn. — New Hampshire and Minnesota have the country's lowest poverty rates. About five and half percent of the two states populations are officially poor.

Wisconsin's poverty rate of about eight and half percent is also among the country's lowest. By comparison, Arkansas, New Mexico and Mississippi at between 17 and 18 percent have the country's highest rates.

Roughly 34.5 million Americans live in poverty. The federal government defines poverty as a single person earning $9300 or less a year. The poverty rate for a household of three, including one child is about $14,500.

State University of New York at Albany sociologist John Logan, a national poverty expert, says the poverty rate increase for blacks was the largest of any group. "That's discouraging because in the l990's African Americans specifically had made some progress and caught up a little bit to whites. And there was some evidence of progress there, but it turns out to be a fragile gain because they're losing a lot of what was gained in the 90s now just in the last two years," Logan says.

The census numbers do not supply much specific poverty information for Minnesota. The most detailed look at the state's poor comes from the St. Paul-based Wilder Research Center. Wilder scientist Greg Owen says their most recent analysis is for southwestern Minnesota. He says single people there are much more likely to be poor.

"The economic engine of one person is simply not as powerful as two people in the household. Secondly, the proportion of persons of color that are in this population below the poverty level is about twice what it is in the general population. In the southwest part of the state that's mostly Latino, Spanish speaking people," Owen said.

The other finding, Owen says, is people with disabilities are disproportionately represented among Minnesotan's who are poor.

Ilene Wallace says Minnesota's poverty rate is likely double what the Census Bureau is reporting. Wallace is executive director of the Heartland Community Action Agency in Willmar. The western Minnesota anti-poverty agency is a conduit for federal and state dollars for poor people who need housing and other help.

A more realistic calculation of the poverty line for a family with children, Wallace says, is $33,000; not the $15,200 set by the federal government. She says the government's calculation underestimates living costs.

"When housing prices skyrocketed that was never taken into account. When fuel prices went up drastically that was never taken into account. So we're using the same formula to determine whether households have enough money to make it that we were using in l962 and it's not real any longer," Wallace said.

Wallace rejects the widely held assumption that lower rural living costs cushion poor people there from poverty's effects. She says it's true some housing costs in rural areas for some people are lower. However, rural wages are lower. And other costs, she says, are higher.

"There are transportation issues in a rural areas that people do not see in a metro area. We're talking people living in one town and maybe they're working in another town that's 30 or 40 miles away and their child care is in a different town so you don't function in a rural area without transportation and transportation costs are often higher," Wallace says.

One other finding from the Census Bureau poverty report. The nation's child poverty rate, put at about 16.5 percent is unchanged. It's down from a recent peak ten years of more than twenty two and half percent, but still very high compared to child poverty rates in other western industrialized nations.

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