Making a Living? The State of Working Minnesota
Labor Day 2000
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Executive Summary
Minnesota workers have realized many improvements in their standard of living
during the 1990s, including wage and family income increases and a strong
decline in unemployment. However, these general measures hide the fact that
inequality is increasing, that increased incomes are largely due to more hours
worked, and that basic costs — particularly housing — are out of reach for
ordinary workers.
Low Unemployment Rate Disguises Disparities
Although Minnesota’s unemployment rate has dropped to 2.8%, unemployment is
considerably higher in the northern regions of the state. The unemployment rate
also disguises the fact that many workers have a relatively tenuous connection
to the workforce. Nearly 19% of Minnesota workers work only part-time hours. The
number of workers laid off also has not declined over time.
Wages Grow Unequally
Minnesota’s low, median, and high wage workers all saw their wages increase
during the 1990s. However, these wages did not grow at the same rate, and for
many workers, increases in the 1990s made up for declines in the 1980s. Since
1979, the wages of low wage workers have grown 7.5%, median wages 8.6%, and high
wages 13.3%. These uneven growth rates have led to greater wage inequality
between workers.
Family Incomes Up, Because Families Work More
Minnesota’s median family income grew faster in the 1990s than in any other
state, reaching $67,140 for a family of four, an annual growth rate of 2.1%
since 1989. However, national data show that increased family incomes have come
at the expense of more hours worked. The average U.S. worker spent 1,898 hours
on the job in 1998, nearly two weeks per year more than in 1989. The average
two-parent family with children worked a total of 3,452 hours per year, nearly
four weeks more than in 1989. This makes it increasingly difficult for workers
to balance work and family responsibilities.
Income Inequality on the Rise
Income inequality has been increasing in Minnesota. The incomes of the
poorest 20% of families did not grow since the late 1970s relative to inflation,
while the incomes of the middle 20% of families grew 16.6%, and the incomes of
the top 20% of families grew 42.6%. The prosperity of Minnesota’s economy has
not been equally shared.
Basic Costs Outpace Income Gains
Minnesota workers are finding that basic costs are rising faster than their
incomes. Housing in particular has become out of reach for ordinary workers.
Median home prices in the Twin Cities have increased 61% since 1995, and have
grown even faster in other parts of the state. It is now nearly impossible for
an average family to buy a home in the metro area.
Updated August 22, 2000
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