Asian Americans have the most income mobility in Minnesota

Asian Minnesotans have higher income mobility rates than not only other racial groups in the state but also Asian Americans in other states.

Saengmany Ratsabout grew up on public assistance while his father, who had immigrated to the U.S. as a Lao refugee in the 1980s, worked at warehouses and factories to support a family of eight.

His was the first generation to attend college, and after starting out making $12 an hour at a social services nonprofit, Ratsabout's income steadily rose as he changed jobs, earned more degrees and climbed the career ladder. The researcher specializing in Southeast Asian studies now makes $110,000 as the executive director of the East Side Freedom Library, which has allowed him and his wife — the daughter of Hmong refugees — to pursue opening their own Lao coffee business.

Ratsabout's steady growth in income tells the story of Asian American economic success in Minnesota. New data the Federal Reserve Bank of Minneapolis compiled found Asian Minnesotans have higher income mobility rates than not only other racial groups in Minnesota but also Asian Americans in other states. The trend is most stark at the lowest income quartile.

Ratsabout, 42, said he and his wife "certainly have had mobility."

The data does not break out nations of origin for Asian Americans, grouping together disparate communities with very different paths to this country. Minnesota's largest Asian American community is Hmong, who began resettling here in the 1970s after allying with the U.S. military in the war against Communists in Laos and then had to rise up from poverty as refugees. Meanwhile, the second- and third-largest groups of Asian Minnesotans are of Indian and Chinese heritage and often come to the state as college students or professionals with specialized skills.

There is no single explanation for Asian Minnesotans' income gains, but members of those groups point to a pressure to succeed in practical careers and an emphasis on education as a few shared pathways.

Consistent growth

The Fed data shows once Asian Minnesotans reach the highest income levels, this group also has unusually high rates of "persistence," meaning their incomes don't fall back down again.

Many Indian immigrants move here on visas for highly specialized workers, which could explain why their income stays high. But that also comes with an added burden. Eden Prairie resident Murthy Ivaturi moved to the U.S. from India in 2016 to work in IT on an H-1B visa and said he feels he needs to constantly upgrade his skills and perform at a high level while he waits for his green card application to process amid an enormous backlog.

"We need to ensure we maintain our status," Ivaturi said. "That means we should have specialized skills always and we should prove … exceptional talent. We always keep ourselves running in the race and updating ourselves technology-wise."

He added: "There's a lot of pressure that comes with that."

Pressure to thrive — whether to escape poverty, improve chances of remaining in the country or satisfy personal or cultural expectations — might be another reason for Asian Minnesotans' financial rise. Another could be the state's general economy and a host of social service organizations welcoming refugees and immigrants. The Hmong American Partnership, for instance, provides job training in manufacturing, health care, IT and transportation. The Karen Organization of Minnesota also offers vocational training and job counseling to the newest wave of Asian refugees.

"We don't have an explanation for what makes Minnesota different for Asian earnings compared to Asian earnings in the U.S.," said Illenin Kondo, senior research economist with the Opportunity and Inclusive Growth Institute at the Fed of Minneapolis.

He noted nationally, 35% of Asian Americans in the bottom income quartile have a college education compared to 18% of everyone else. But in Minnesota, the gap is small: 25% of Asian Americans in the lowest income group are college-educated compared to 20% of others. So education can't fully account for the difference. Kondo also pointed out earnings for foreign-born workers nationally have been outpacing their American-born counterparts through the two decades leading to the pandemic.

"It's very strong for top earnings, but it's true across the distribution … that could be playing out a little more strongly in Minnesota," Kondo said.

This picture for Asian Minnesotans isn't universal, though. A 2021 report from the Coalition of Asian American Leaders found many felt systemic racism and structural barriers prevented the community from improving economic mobility and building wealth.

Lee Pao Xiong, director of the Center for Hmong Studies at Concordia University, recalled having 30 relatives on public assistance in California working low-wage jobs during the 1990s. As a Hmong refugee in Minnesota, he successfully encouraged them to move to his state for better employment and affordable housing.

Those family members started out driving buses and working in factories, left behind government reliance and worked their way up to stability. They and other Hmong Americans also focused on education as a way out of poverty, Xiong noted.

Now, more than half of Hmong people in Minnesota own their own home. Xiong said those who came here as children, as well as the second generation, are succeeding.

"That's the spirit of the Hmong community," he said.

Yigang Wang grew up in China and earned a Ph.D. in mechanical engineering in California before moving to the Twin Cities in 2010 to start his career. His income steadily progressed as he advanced through the ranks and switched jobs several times, ultimately landing at his current role as an electrical engineering manager in Eden Prairie. Wang, of Plymouth, said he has found Minnesota's job market to be friendly toward Asian Americans and ripe for good engineers.

"Minnesota is very committed to promoting diversity and inclusion, not just in the university but also in the company," Wang, 45, said.

Chen Zhou is vice president of the Minnesota China Friendship Garden Society Board of Directors and lives in Plymouth. Zhou also said the state is generally welcoming to foreign-born newcomers, noting high participation in Asian American festivals and events.

"They feel they are part of this state," Zhou said of Asian Minnesotans. "They feel they are part of the community."

Saengmany Ratsabout and his wife, Gao Lee, at their warehouse office at Uprooted Coffee in St. Paul on May 8. Ratsabout's rise in income enabled Lee to to quit her $94,000 human resources job and focus solely on developing the coffee business. The couple work with distributors who bring coffee from Laos to the U.S. for the pair to roast locally and sell online.

Refugee mentality

Ratsabout initially left a job paying around $57,000 at University of Minnesota to start a business with his wife, Gao Lee, in 2020. But their plan of selling Southeast Asian drinks at festivals imploded when the pandemic arrived. Ratsabout returned to the U as a program manager at the Institute for Advanced Studies in 2022, making $75,000, and saw his income leap to six figures when he moved to a job at the library.

Lee went from being born in public housing to eventually making nearly $94,000 working in human resources for a philanthropic foundation before her husband's rise in income enabled her to quit her job and focus solely on developing their coffee business. Now 41, Lee said it was mentally hard to leave behind that salary to pursue Uprooted Coffee because of the refugee mentality of not having enough.

But after years focusing on building her income, she decided she was ready to fulfill her passion, too. The couple now works with distributors who bring coffee from Laos to the U.S. for the pair to roast locally and sell online as well as at various stores and cafes, including the Minneapolis Laotian restaurant Khâluna. But for the parents of two teenage children in Newport, arriving at this point took many years with no generational wealth as a fallback.

"Among our friends who are doing well financially who are Asian Americans, a lot of them went into careers that they were almost guaranteed a good financial package … because they have such a commitment to making their parents proud and supporting the extended family," Lee said. "So I think sometimes in our culture, that outweighs your own interests, your own passions, a bit."