Ramstad: How will future Minnesotans view our current efforts to fix historical prejudices?

Minnesotans used to look back at the post-World War II era as the moment the state began a spectacular rise to becoming one of the most prosperous places in America.

With time, and a more critical lens, it became clear that’s also when prejudicial housing covenants and biased practices in lending and hiring created huge economic disparities between white Minnesotans and everyone else.

The most pernicious behaviors ended but economic gaps remain, a vexing problem that Samuel L. Myers Jr., a University of Minnesota economist, calls the “Minnesota Paradox.”

One of the most extreme disparities is that only about 20% of Black households in Minnesota are homeowners compared to more than 70% of white households.

I often write about whether Minnesota can maintain its wealth and remain an economic powerhouse with a state population growing at its slowest rate ever.

The extra layer to that challenge is, for about a decade now, what little population growth the state has seen is because of people of color. Minnesota’s white population peaked in the early 2010s, declining since.

Which makes ending the Minnesota Paradox not only about moral virtue or social justice but imperative for the economic well-being of all Minnesotans.

“If we aren’t tackling [the paradox] ... we won’t have the same prosperous economy that we have had,” LisaBeth Barajas, head of community development at the Metropolitan Council, said. “The math doesn’t hold up any other way.”

In this series of columns, I’ll explore why it’s been so difficult to fix the Minnesota Paradox.

Of course, for years there have been many efforts and much money spent to create more opportunities for Minnesotans of color. Since the police murder of George Floyd in 2020, businesses put new attention on hiring practices and representation.

Some were short-sighted and collapsed from criticism or financial scrutiny. Others have made a difference. I’ve written about efforts like the McKnight Foundation’s massive program to expand lending to Black Minnesotans and the emergence of specialized job fairs.

Still the paradox persists, and I wonder what future Minnesotans will say we got wrong in the 2020s.

Over months of conversations with business and community leaders, I’ve learned about failures to improve housing and education, about the endless, often strident debate over segregation vs. integration and about decisions that seem benign but hold back Minnesotans of color.

“The United States started with an idea. What was the idea? That all men are created equal. We start with a great idea, then it seems we find a way to lose it,” the Rev. Alfred Babington-Johnson, a longtime leader in Minneapolis’ Black community, told me recently.

We’re in a moment when the U.S. and Minnesota economies are performing relatively well. We’ve gotten past the pandemic downturn and the whiplash recovery, which spiked inflation. And yet, American voters tell pollsters the issues they care most about in the presidential election are inflation and immigration.

Race and class underlie those issues, and grievance and victimhood dominate the public discussion. All the negativity leads people to forget that economic opportunity is not a zero-sum game. White people do not have to be dragged down for people of color to get ahead, and vice versa.

Indeed, in a monumental study released last month, economists led by Harvard’s Raj Chetty looked at the upward mobility of 27-year-olds born in 1978 and 1992 and found the places where Black people fared the best were the same as where white people did.

What’s more, as I’ve often written, Minnesota is one of the states that’s at the leading edge of a phenomenon that will eventually influence the overall U.S. economy — the change from labor abundance to labor scarcity.

Minnesota’s overall workforce remains smaller today than it was before the pandemic. That’s due to low population growth and retirements in the baby boomer generation, which is proportionally more white than younger generations.

This change should mean more opportunity for everyone, but particularly people of color who historically had lower rates of employment.

Yet the presence of opportunity isn’t enough, said Myers, who is writing a book on Minnesota’s economic history. The inertia of individuals and organizations must also be overcome, he said.

Myers compared the type of change needed in Minnesota to what China is going through to encourage bigger families after growth was stymied by its one-child policy.

“I use the Chinese example to illustrate two things,” Myers said. “One is to warn us not to think that it’s as simple as changing the growth pattern of the population. The second is that it’s a cultural change. How people institutionalize things doesn’t always reverse itself.”

It can, though. Myers’ research chronicles how the state’s culture changed nearly a century ago — in the wrong direction for Black Minnesotans.

“It used to be that Minnesota was an extremely high-performing state for African Americans in the sense that they had higher home ownership rates than there was in the rest of the country,” Myers said. “All this was before 1940.”