Minnesota sees historic drop in child poverty

Child poverty has dropped by historic proportions in Minnesota and across the nation over the past 30 years, newly released U.S. Census numbers show.

It's a trend that some state social service leaders credit to welfare work requirements and a strong social safety net of programs they caution need to be saved for the future.

In Minnesota, 4.6% of children lived in poverty in 2020, compared with 20.9% in 1990. That's a drop of 78% in the past three decades, according to Census Bureau's Supplemental Poverty Measure. It's a better performance than the nation overall, which saw a 61% drop — itself historic. With about 1.32 million Minnesota children younger than age 18, about 61,000 live in poverty.

The result of the long downward trend in poverty is that countless thousands of Minnesota children over the past few decades have grown up under better circumstances than previous generations. While the decline in poverty rates was similar across all racial groups, racial disparities have not been eliminated, statistics show. Children of Black, Hispanic and Indigenous descent are still more likely to be experiencing poverty than white children.

Still, such massive gains in the fight against poverty will yield benefits for years to come, those who study the issue say.

"You can look out decades after a childhood where someone has experienced poverty, and you can see and measure the impact," said Susan Brower, Minnesota's state demographer. "Whether it's earnings, career trajectory, health, disability — all kinds of outcomes are tied to it."

Lowering poverty, she said, involves "not just the impact on the individual, but multiplying that by hundreds of thousands. We became a healthier, more productive, happier population than we otherwise would have."

The decrease in child poverty is "fantastic news," said Nikki Farago, deputy commissioner of the state Department of Human Services. "Less children in poverty is amazing, and it's going to make an amazing long-term impact for Minnesota."

But Farago cautioned that the state has much work to do on eliminating disparities born of historic and well-documented discrimination.

"We know that communities of color are starting at a different spot," she said. "They start behind everyone else. It's critical that as a state, and a state agency, we're making sure that we're targeting programs to address those disparities and eliminate those disparities, so that all children in Minnesota can thrive."

Work, tax policy are keys

Some social service leaders trace the improvements to changes in welfare policy decades ago.

Bill Clinton, elected president in 1992, campaigned to "end welfare as we have come to know it." He signed a welfare reform bill in 1996 that brought criticism from many of his fellow Democrats who thought its increased work requirements were punitive.

But many who study family and child welfare now say that requiring work in return for public benefits has turned out to be a good idea, noting that more parents in the workforce is part of the reason child poverty has fallen so dramatically. And that makes access to child care even more critical for low-income families, several noted.

Another Clinton-era reform that may have been even more important is the Earned Income Tax Credit (EITC), signed into law in 1993. It lowered taxes and increased tax refunds for low-income parents — as long as they are working.

"It was controversial at the time," said Maureen Warren, senior vice president of services for Lutheran Social Service of Minnesota. "A lot of his own supporters were disappointed in him. But some of the research credits that now in retrospect."

Like others in the social service world, Warren cautioned that the drop in child poverty shouldn't signal an end to help for struggling families.

"It's not time to declare victory," she said. "Social investment is needed to make sure kids can thrive — getting them connected to healthy habits, education, a safe environment, social connections.

"While the income may have increased, it doesn't mean that the health of the child has increased," she said, noting that safe and affordable housing remains a big issue in Minnesota.

And income alone doesn't give a complete picture of poverty and economic equality, said Yasmin Grewal-Kök, who leads a team of policy analysts studying child welfare at Chapin Hall, a research arm of the University of Chicago.

"The United States hasn't solved poverty," she said. "There are more than 20 million Americans in poverty."

In terms of net worth, she said, families of color still lag far behind white families. And there are many struggling families just above the poverty line — defined in 2022 as cash income of about $28,000 for a family of four.

Grewal-Kök said the many subsidies rolled out during the COVID-19 pandemic have proved to be effective at keeping families out of poverty. She suggested that they're worth looking at permanently.

"That has had an incredible impact on poverty, food insecurity and other areas," she said. "It kind of shows us what is possible."

COVID programs helped

The end of COVID-related stimulus concerns Debra Fitzpatrick, policy and research director of the Children's Defense Fund-Minnesota.

"We know that families with children are struggling, and some of that likely is due to the retrenchment of those really important supports during the pandemic, combined with inflation and other issues," Fitzpatrick said.

Fitzpatrick pointed to a recent Census Bureau Household Pulse Survey, which tracks the economic and social impacts of the pandemic. It showed that 45% of Minnesota respondents with children in their household are having a somewhat or very difficult time paying for usual household expenses.

Wages are increasing but not as fast as inflation. Minnesota families are struggling to keep up with the high price of gas due to inflation, she said.

The drop in child poverty was great to see, but it's challenging to attribute it to any one policy, said University of Illinois Chicago Professor Kalen Flynn. She said there is danger in numbers going back up once the structure of COVID-era programs disappear.

Many families were already struggling to afford housing, school lunches and childcare before the pandemic, said Colleen Moriarty, executive director of Hunger Solutions Minnesota. Hunger Solutions saw more support for families during the pandemic, she said, and the report confirmed that.

"I know that those services, if they haven't blinked off already, they're on the verge of that," Moriarty said.

School lunch was free for all families during the pandemic, for example, and the child tax credit and other pandemic-era benefits were boosted. Now families may be left without programs that kept them afloat. Moriarty said she worries that the Census report will be seen as another reason to return to "normal" or that childhood poverty has been solved.

"If we just let people slip right back down into extreme poverty it doesn't solve the issue. It doesn't build people towards being able to support themselves," she said.

"I think this is the bright side of what can happen when we all work together with the government to provide support for families. The dark side is what people will slide back to, unfortunately, if we don't keep up this support."