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Census numbers show 'a lot of wealth' in Minnesota
by Jeff Horwich, Minnesota Public Radio
August 26, 2004

Minnesota's economic picture looks better than most other states, with median incomes near the top of the list, and rates of poverty near the bottom. (MPR Photo/Jeff Horwich)

New government numbers show Minnesota remains among the most affluent states in the nation, with one of the lowest rates of poverty. Wisconsin and Iowa, two other political swing states, also showed fewer signs of poverty than many other states in the country.

Minneapolis, Minn. — Stacked up against the rest of the country, Minnesota paychecks look pretty nice. The U.S. Census Bureau says that between 2001 and 2003, Minnesota households had a median income of $54,500 -- that is, half the households made more, half less. Incomes did fall slightly during that time, but Minnesota is still in a statistical dead-heat among half-a-dozen states at the top. Nationally, the median household makes less than $44,000 a year.

"The '90s were very good to us, and we have a lot of income and wealth here in Minnesota," says Barbara Ronningen, a senior analyst with the state demographer's office. "Somehow we seem to suppress that. I think we don't want to admit that we're wealthy -- it's this modest, northern Midwestern attitude."

Ronningen says she might have expected poverty rates here to rise in recent years, on the heels of a recession and a continued sluggish job market. But they didn't. The Census Bureau found just 7 percent of Minnesota households below the poverty line, trailing only New Hampshire.

Ronningen cautions poverty figures can be misleading, and probably understate the true number of Minnesota's poor. The poverty line is defined as a family of four making less than $19,000 a year. Not only is that figure considered outdated and extremely low by many analysts, but it doesn't account for a higher cost of living in certain places.

We have a lot of income and wealth here in Minnesota. Somehow we seem to suppress that. I think we don't want to admit that we're wealthy -- it's this modest, northern Midwestern attitude. - Barbara Ronningen, state demographer's office

"In Mississippi, where income is less, where rent is less, $18,660 dollars would probably go a lot farther than in Minneapolis, for example," says Ronningen.

A second Census survey, released at the same time, gives a glimpse of some individual communities -- including the swiftly growing metro counties of Anoka and Dakota. In Anoka County, median household income dropped by 7 percent between 2002 and 2003. But the poverty rate also fell, from 6 percent to 4 percent.

In Dakota County, income and poverty both rose. This makes sense to Fred Rau, who runs six food shelves in Dakota County for the Community Action Council. The number of food shelf customers doubled since 2001, and continues to grow. But so do the donations from the community.

"We've been lucky -- pockets of people that give a lot. People have been very generous. But business has been up, up, up," says Rau.

Rau says the agency has seen more requests for help with rent, utilities, car repairs, and school supplies. Many of these people, he says, probably make more than the statistical poverty line. They might fall into a broader measure of the working poor, those who make 200 percent of poverty -- or $37,000 a year for a family of four. According to the numbers just released, about 17 percent of Minnesotans fall into this category.

Along with income, health insurance coverage has become an important measure of economic well-being. The new numbers show about 8 percent of Minnesotans are uninsured -- the lowest level in the nation. And it has remained relatively steady, even as the number of uninsured grew nationally and in neighboring states.

But there's a shift going on within that steady number -- according to Kathleen Call, a professor of public health and state data analyst.

"Historically, the private market -- the employer-subsidized insurance -- has really helped us keep our rate low. But it seems like we're seeing some erosion in the employer-based market, and the public coverage rates are increasing," says Call.

Minnesotans under 65 using Medicaid and other public health insurance grew from 10 percent in 2001 to more than 12 percent last year. Not a huge shift, but Call describes it as "foreboding," given that no new funds are flowing into the public health system.

The new insurance numbers also don't show another trend Call has been charting -- the shift of more health care costs to employees in the form of higher premiums and deductibles. In this respect, Call says Minnesota has been tracking the nation.

Wisconsin and Iowa, two other political swing states, also showed fewer signs of poverty than many other states in the country.

The bureau also reported slight increases in incomes in Iowa and Wisconsin. Incomes in Wisconsin were among the top third in the nation while those in Iowa were in the middle of the pack.

The figures came from the bureau's Current Population Survey.

The bureau averages survey results over time to come up with the estimates. The bureau used two-year averages in reporting some national figures, but recommends using three years in comparing states because of the smaller sample size.

The figures were released about a month earlier than normal, in what some Democrats claimed was an attempt to blunt their use in the presidential election. The Census Bureau denied the move was politically motivated.

Nonetheless, the national data will probably figure prominently in the tight presidential election race between President Bush and Democratic challenger John Kerry, who claimed the numbers were evidence Bush's economic policies had failed.

"Under George Bush's watch, America's families are falling further behind," said Kerry during a campaign stop in Anoka on Thursday. "While George Bush tries to convince America's families that we're turning the corner, slogans and empty rhetoric can't hide the real story."

Bush administration officials noted that the data didn't reflect more recent gains in the economy in the first half of 2004. Also, Health and Human Services Secretary Tommy Thompson blamed the Senate for failing to adopt Bush's health care legislation.

Polling in the Upper Midwest has shown that health care is the fourth most important issue for voters in the region - after the economy, the war on terror and Iraq - said Larry Jacobs, who teaches political science at the University of Minnesota.

The number of people without insurance also carries special weight in the three states because of the states' historically low uninsurance rates.

"I do think that there is an expectation of insurance in the Upper Midwest that is not shared by some of the other states," he said. "So any erosion in that becomes pretty noticeable."

He said that news of an increase in the number of uninsured, for many voters, is a sign that the nation is worse off that it was four years ago - a perception that Kerry's people will push and Bush supporters will battle.

"When they (voters) see declines in the number of people with insurance, it's an indicator that things are not as well as they were when the president took over."

(The Associated Press contributed to this report)

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