Minnesota has second lowest poverty rate in the country

Published 10:38 am Thursday, September 15, 2016

By Jon Collins

The U.S. census data released Tuesday paints a rosy picture for Minnesota, which has some of the lowest poverty rates and lowest rates of residents without health insurance.

The bureau put the state’s official poverty rate at 9.1 percent, with almost half a million people in the state living in poverty last year.

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The state’s poverty rate is tied with Vermont and lower than any state except New Hampshire. It’s also significantly lower than the national poverty rate of 13.5 percent. While the poverty rate decreased nationally last year, it still hasn’t fallen to pre-recession levels.

The proportion of Americans in poverty also fell sharply last year, to 13.5 percent from nearly 14.8 percent. That is the largest decline in poverty since 1999. There were 43.1 million people in poverty last year, 3.5 million fewer than in 2014.

Overall, the census data show that incomes continue to climb across most of the country and for most demographic groups. But earnings still haven’t recovered to pre-recession levels.

The typical U.S. household’s income rose 5.2 percent in 2015 to $56,516. Even with the solid gain, that remains below the median household income in 2007 when the Great Recession began.

But middle-class incomes had seen little improvement since the recession ended in 2009, even as the unemployment rate fell and hiring picked up.

“It’s really a broad, broad increase in median incomes, and one of the largest increases … that we’ve ever had,” said Trudi Renwick, assistant division chief at Census Bureau.

Median incomes picked up in all regions of the United States, across all age groups, and for most ethnic and racial groups, she said.

The figures could also impact the presidential campaign. Median household income is now higher than in 2009 when President Barack Obama took office. It took six years to reach that point, a trend that likely has contributed to insurgent candidacies by GOP nominee Donald Trump and Sen. Bernie Sanders, an independent who campaigned for the Democratic nomination.

But it remains 2.4 percent below the peak it reached in 1999, when it was $57,909.

The income gains and drop in poverty reflect ongoing gains in the job market, Renwick said. About 2.4 million more Americans found full-time, year-round jobs in 2015.

Americans are also likely benefiting from an increase in middle-income jobs. Many of the jobs created in the early years of the recovery have been in low-paying sectors, such as fast food restaurants and retail.

But according to a report from the Federal Reserve Bank of New York, in 2014 and 2015 the growth of middle-income jobs in sectors such as shipping and construction outpaced the gains in lower-paying and higher-paying work.

The poorest Americans saw the biggest income gain, the Census report found, driven by widespread increases in the minimum wage and increasing competition for low-wage jobs.

Incomes also rose across demographic groups. The median income for Hispanic households increased by 6.1 percent last year while non-Hispanic whites and African-Americans each saw increases of more than 4 percent, according to the Census.

Disparities still persist. Median household income for African-Americans was estimated at just under $37,000, less than half that of Asian households. Hispanic household median income was an estimated $45,148 while white households earned an estimated $60,109.

Income for the poorest 10 percent of households jumped 7.9 percent, while for the wealthiest 10 percent, incomes rose just 2.9 percent. That narrowed the gap between the two groups by one of the largest amounts on record.

The Census report also showed that the number of uninsured Americans continued to drop, as people take advantage of Obama’s health care law.

The share of people in the United States uninsured for the entire year was 9.1 percent, or 29 million people. When compared to 2014, nearly 4 million people gained coverage during the year. The share of the population uninsured in 2014 was 10.4 percent, or 33 million people.

The proportion of Minnesota residents with access to health insurance also rose last year, according to Census Bureau data. Only 4.5 percent of state residents were uninsured in 2015, down from 8.2 percent in 2013.

The report also found that women on average earned 80 percent of the income of men in 2015, a slight improvement from 79 percent in the previous year.

— The Associated Press contributed to this report.