Poverty Fact Sheet
Poverty in Minnesota: Helpful Facts
Poverty Rates and Racial Disparities
1. Minnesota’s poverty rate is 11.9%, which means 621,970 Minnesotans live in poverty.
2. The poverty rate for Minnesota children is higher and stands at 14.1%. This translates to 174,000 Minnesota children.
3. For households headed by women, the poverty rate is 27.8%.
4. Minnesota’s overall poverty rate is below the national average and is relatively low compared to that of other states. However, Minnesota’s poverty rates for minorities are consistently higher than the national averages.
5. Minnesota’s poverty rate for non-Hispanic whites is 8.2% while its poverty rate for all people of color is 26.2%.
6. Minnesota has the highest poverty rate in the nation among Asian American children (22%).
7. Minnesota has the fifth highest poverty rate in the nation among African American children (47%).
Poverty and Basic Needs Thresholds
8. The federal poverty threshold is defined as $21,954 per year for a family of four.
9. In Minnesota, the average cost of covering basic needs for a family of four where both parents work is $58,363 per year. This means each parent would have to earn an hourly wage of $14.03, but 39% of jobs in Minnesota pay less than this.
10. Approximately 27% of Minnesota families (with children, at least one of whom is in childcare) are not earning enough to meet their basic needs.
Poverty and Income Trends
11. Minnesota’s poverty rate has been creeping upward over the past few years, from about 9% in 2005, to 11% in 2009, and then to 11.9% in 2011.
12. The poverty rate for children has also been increasing. It rose from 11% in 2008 to 14% in 2009. Back in 2002, it was only 9%.
13. Income inequality has been increasing in Minnesota. From the late 1990s to the mid 2000s, average income remained essentially flat for the bottom 20% of earners and the middle 20% of earners, but for the top 20% of earners, average income rose by over $10,000 (all in 2005 dollars).
14. Child poverty has an impact on everyone and hurts the economy. It is estimated that child poverty costs Minnesota $5.7 billion each year in terms of lost productivity and earnings and greater criminal justice and healthcare costs.
15. Poverty perpetuates itself. Children born into poor families are more likely to be poor when they grow up. Additionally, children who are poor over longer periods of time are more likely to be poor as adults.
Poverty Dynamics and Antipoverty Measures
16. The number one factor associated with falling into poverty is a household member losing his or her job. Changes in family structure and in disability status are also important factors.
17. Government transfer payments play an important role in keeping people out of poverty. In 2009, the Earned Income Tax Credit for low-income people lifted an estimated 6.6 million Americans out of poverty, including 3.3 million children.
18. In 2008, Social Security kept 19.8 million Americans out of poverty, including 1.1 million children. In Minnesota alone, Social Security prevented 234,000 elderly from living in poverty.
19. Since its creation, Medicare has significantly reduced the financial burden of healthcare on the elderly. Seniors who are covered by Medicare now would pay more for their healthcare if Medicare did not exist. The poverty rate for those over the age of 65 has dropped from 25% in 1968 to 10% in 2009.
20. In 2000, the Food Stamp Program lifted about 500,000 children out of poverty. Food stamps also contributed to significant declines in child poverty in measures of the depth and severity of poverty.
1, 3, 4: U.S. Census Bureau, 2011 American Community Survey
2, 6, 7, 12, 14, 15: Minnesota Kids Count 2011, Children’s Defense Fund Minnesota
8: U.S. Census Bureau, Current Population Survey, 2010 Annual Social and Economic Supplement
10: “What percent of Working Families in Minnesota do not earn sufficient income to meet basic needs?”, Growth and Jusice, 2006
11: U.S. Census Bureau, 2009 and 2011 American Community Surveys
13: “Pulling Apart: A State-by-State Analysis of Income Trends”, Center on Budget and Policy Priorities, 2008
16: Signe-Mary McKernan and Caroline Ratcliffe, “Events that Trigger Poverty Entries and Exits”, The Urban Institute, 2002
17: Internal Revenue Service
18: “Social Security Keeps 20 Million Americans Out of Poverty: A State-by-State Analysis”, Center on Budget and Policy Priorities, 2010
19: Marilyn Moon, Medicare: A Policy Primer, Urban Institute Press, 2006
20: Food Assistance and Nutrition Research Report Number 26-9, USDA Economic Research Service, 2002