Minnesota gets a glimpse of hope and economic gains

  • Article by: JEREMY OLSON , Star Tribune
  • Updated: September 12, 2012 - 9:37 PM

The state stood out in census survey reporting that U.S. households had lost income but gained health insurance.

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Hopes for a better life drew Duke Johnson to Minneapolis. At People Serving People, his wife, Angela, above, got dental care.

Photo: David Joles, Star Tribune

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Minnesota may have turned an economic corner between 2010 and 2011, according to a closely watched U.S. census survey released Wednesday.

Household income edged up last year, the poverty rate edged down and the share of people with health insurance expanded slightly -- although the changes fell within the survey's statistical margins of error.

Minnesota's results stood out against a subdued national picture that emerged from the census report. Nationally, household income slipped 1.5 percent, to $50,054, and poverty was essentially flat. Minnesota's estimated poverty rate was well below the national average, 10 percent vs. 15, and its rate of residents without health insurance was 9.2 percent, compared with 15.7 percent nationally.

Nonetheless, Minnesota remained worse off than it was before the last recession -- a measure of the nation's tepid economic recovery.

A hopeful sign emerged in Minnesota's income data. Average household income inched up to $57,520 in 2011, from $53,972 the prior year. (Both numbers are adjusted for inflation.) Although the increase remained barely within the census survey's margin of error -- meaning it could be a statistical aberration -- it offers reason for optimism when combined with Minnesota's declining unemployment rate and recent forecasts of economic growth.

"Let's hope so," State Demographer Susan Brower said. "From this data, we can't say for sure, but let's hope so."

Income gap widened

A clearer picture of Minnesota's economic health will emerge next week, when census officials release their annual American Community Survey, which yields more reliable trends for states and large cities.

Despite its limitations, Wednesday's release, known as the Current Population Survey, provided a clear picture of the nation's economic well-being and plenty of ammunition for the U.S. presidential race.

Average incomes fell for the bottom 80 percent of households, and the nation's median household income remained far below its peak, $53,252 in 1999.

At the same time, the number of Americans with health insurance rose to 260.2 million last year compared with 256.6 million in 2010. Coverage levels particularly improved among 19- to 25-year-olds, who among other things took advantage of new federal rules allowing them to remain on their parents' health plans.

The increase in insurance coverage is "extraordinary" in a tough economy and a credit to President Obama's health reforms, but the poverty and income figures might help Republican Mitt Romney, said Lawrence Jacobs, an expert in presidential politics and survey research at the University of Minnesota's Humphrey School of Public Affairs.

"A decline in personal income is often blamed on the incumbent and leads a good number of voters to punish the incumbent," Jacobs said.

Some of the drag on incomes reflects the gradual aging of the nation and its massive baby-boomer generation; households of older couples or senior citizens living alone tend to make less money.

The national data also revealed a widening of the nation's income gap -- meaning that more earnings went to the wealthy and less to the poor last year. An inequality measure known as the Gini index rose in 2011 -- the first such change since 1993.

Low-wage jobs

The economy's weakness is a daily reality at the People Serving People homeless shelter for families in downtown Minneapolis.

Adults with high school diplomas or less are struggling to find jobs, executive director Daniel Gumnit said. Those who find work often don't receive wages that can cover the high costs of rent and child care in the Twin Cities, he added. The shelter, as a result, has been at or near capacity all summer.

"We have people sleeping in our library and conference rooms," Gumnit said, "every conceivable place that we can put people."

Duke Johnson moved his wife and two children from Savannah, Ga., to Minneapolis recently because he believed the city offered his family a better chance at a stable future. Johnson, 22, worked as a chef in Georgia during the day and then watched the kids at night, when his wife worked as a nursing assistant.

Their income didn't cover rent, though, so Johnson moved to Chicago with relatives, and his wife and kids stayed in subsidized housing in Georgia until they made plans to relocate to Minnesota. They are staying at the Minneapolis shelter while searching for work.

"I think we can keep up with the bills and everything better here," Johnson said.

Jeremy Olson • 612-673-7744

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