New report shows stark economic inequalities among Minnesota's cultural groups

New state data shows continued deep differences in the economic well-being of Minnesotans from different cultural groups, reflecting longstanding racial disparities in the state and country.

Among the biggest disparities, according to the report from the Minnesota State Demographic Center: median household incomes that ranged from a low of less than $29,000 in some groups to a high of $120,600 in another.

Called "The Economic Status of Minnesotans 2023," the report released Wednesday analyzed dozens of data points comparing the state's 17 largest cultural groups, including Somali, Hmong, Mexican, Dakota and white.

Key findings relied on survey data collected between 2016 and 2020 and show disparities in homeownership, employment, education levels and individual earnings.

State Demographer Susan Brower said the big differences in economic resources and labor force participation likely remain a problem.

"This report gives us a whole lot of detail on our diversifying state," she said. "We have a pretty good picture that the racial disparities we've known about for many years still hold."

Median household incomes ranged from a low of about $28,800 for Somali households and certain American Indian households to a high of $120,600 for Asian Indian households. White households had a median income of about $75,000.

Unemployment was four times higher among adults from American Indian, African American, and Somali communities than among Asian Indian, Chinese, Filipino, Lao, Vietnamese, Puerto Rican and white Minnesotans, according to the report.

These disparities could be attributed to educational attainment, a lack of reliable access to a vehicle or a lack of proficiency in English, Brower said.

The report shows how deeply the differences affect communities and how unlikely these issues are to be fixed quickly, she said.

Homeownership is a central way to build wealth for many families, and wide gaps reveal how few assets certain communities possess. Seventy-seven percent of white households owned their home compared with just 25% of African American and 11% of Somali households.

That statistic was not a surprise to Minnesota Homeownership Center President Julie Gugin, who said the gap between white and Black homeowners has persisted for years. Cities and the Legislature are beginning to take notice, she said.

"Since the murder of George Floyd, the powers that be — whether it's philanthropy, community leaders, elected officials — are starting to pay far more attention to racial inequities. ... Housing in particular is getting far more attention than it ever has," Gugin said.

The demographer's report also highlighted differences within communities of color. Somali, Mexican, Ojibwe and Hmong full-time workers reported the lowest earnings, under $40,000 annually, while Asian Indian and Chinese workers earned $91,000 and $64,000, respectively.

About 75% of Somali people were living either below the federal poverty line or "near poverty," which means many were one crisis away from falling into poverty, the report said. The federal poverty line is $26,500 annually for a family of four. For all of the American Indian groups, 50% to 60% live below the poverty line or near poverty.

The state report does not advocate for particular solutions to the inequalities; it notes that there are already efforts under way around the state to remedy them. But it said the data could be particularly useful when considering the future of an already tight labor market.

"Minnesota will need contributions from all available workers in the years to come to fill available jobs and maintain growth," the report said.

That could mean improved English-language training, Adult Basic Education or increased child-care subsidies, the state report said.

Whitney Harvey, Minnesota Chamber of Commerce director of workforce diversity and inclusion, has traveled the state educating the chamber's 2,300 business members about ways they can remove hiring barriers and make workplaces more diverse and inclusive for people of color, people with disabilities, non-English speakers, veterans, those lacking cars and others.

Harvey sometimes connects employers with community groups that can teach English on the jobsite or create ride-sharing programs for workers who lack transportation, she said. In other cases, her organization connects businesses looking to address child-care deficits or diversify suppliers.

"My job is to help business owners understand what the existing barriers are and to think of unique ways to remove those," Harvey said.

The Northside Economic Opportunity Network (NEON) in Minneapolis is trying various approaches to boost income levels of Black Minnesotans, especially on the city's North Side. The nonprofit community lender is training Black entrepreneurs to maximize sales and profits so they can hire more workers. Network staffers are also helping Black small-business owners buy their own buildings to begin building real estate equity and wealth.

"We are trying to reduce the racial wealth-equity gap and we believe that the most effective tool to do it is entrepreneurship," NEON President Warren McLean said in a past interview.

Determined to improve Black wealth, U.S. Bank has started an "Access Commitment" program. It helps Black sole proprietors gain the skills and growth needed to hire at least one additional worker.

"In our research we found that [a] disproportionate number of Black-owned businesses are sole proprietors. And we found that by helping these small businesses create one more job, that the economic impact is enormous," said Greg Cunningham, U.S. Bank's senior executive vice president and chief diversity officer.

A resulting new business mentoring program dubbed "One More Job" "is all about helping these organizations create jobs and opportunities in these communities," he said.

The state demographer's office used detailed but anonymous data from the American Community Survey to define the cultural groups. Brower noted that it's possible some of the Black cultural groups might be undercounted due to methodology limitations in how the Census Bureau collected the data.