Duluth and Minnesota poverty levels dip

By John Myers

September 19, 2013 11:00 PM

While thousands of Twin Ports students living on ramen noodles and cheap beer might argue otherwise, new data is showing that cities with big or multiple colleges have been showing artificially high poverty rates for years.

The study by the U.S. Census Bureau, released this summer, shows that income-poor but not really poverty-stricken students are pushing poverty rates up by 5, 10 or even 30 percentage points in places like State College, Pa.; East Lansing, Mich.; and Duluth. Nationally, nearly half of college students who live away from home are counted as in poverty.

For example, the Census Bureau on Thursday released the results of the 2012 American Community Survey showing Duluth's poverty rate dropped from 22.9 percent in 2011 to 21.5 percent in 2012. That's still far above the state and national averages, but take away the 5.4 percentage points that

account for away-from-home college students, and the study found

Duluth's poverty rate is closer to 16 percent, not far off the national level of 15 percent.

Drew Digby, special projects and long-term recovery manager for Carlton County and a former state of Minnesota employment analyst, said the study confirms what analysts had suspected for years.

It's not to say some college students aren't truly in poverty -- older students going back for a degree for retraining, say, who have two kids and no parents or spouse contributing. But most college students aren't in need of government programs to help lift them into the working class.

Knowing what the college student portion of the poverty level is "allows us to go into the data and understand what is driving the real problem here," Digby said. "It helps us find who is really hurting, who needs help and how to target programs that are going to reach those who need it."

Duluth Mayor Don Ness agreed.

"For many years I've questioned the impact of college students on our poverty statistics and took criticism for it in certain circles. Truth is always more complicated than a single number statistic," Ness told the News Tribune. "This second level of analysis shows us a more accurate scope of the challenges we face. Poverty is a big problem in our city and it takes many different forms. ... Poverty for a single mom looks a lot different than for the college sophomore from the suburbs."

In other new Census Bureau data released Thursday:

Duluthians work, but many don't make a lot of money. Duluth residents living at 200 percent of the poverty rate and below (which includes what most people would call the working poor) made up 39 percent of the population in 2012, down almost 2 percentage points from the year before, but still high, Digby noted. "Still a major issue, but (the) data is going in the right direction," he said.

The national poverty rate of 15 percent is essentially unchanged from 2011, mirroring a stagnant economy and job market. The official poverty level for a family of four is $23,492. About 46.5 million people are in poverty in the U.S., about 1 of every 7 people.

Median household income in Duluth went up 7 percent in 2012 to $43,799. That's obviously good news, but it's tempered by the fact that local income still lags way behind the Minnesota median income of just under $59,000. Nationally, median household income slipped a little to $51,017 in 2012 from $51,100 in 2011.

Oddly enough, more Duluth residents older than 16 work than the national average, but our income is still lower. Some 58.6 percent of Duluthians older than 16 work, compared to 57.5 percent nationally. But because our jobs pay less, our average income is lower. "We have to figure out how to get more people from those $7 an hour jobs to the $14 an hour jobs and up, and that's not easy in a relatively small city like Duluth," Digby said. "We've seen a lot of new jobs at places like Enbridge and Cirrus and Essentia that are in the upper end of pay scales ... but we still have a big percentage of our jobs at the lower end of the pay scale."

Ness said efforts to get middle-aged and older residents into new careers through training, or retraining, are working, slowly but surely.

"Employers like AAR, Enbridge, Cirrus and others are hiring as quickly as they can find qualified workers. With the right two-year degree and a good work ethic, Duluthians can step into multiple jobs paying between $35,000 and $70,000 a year with room to grow," the mayor said. "As boomers retire, those skill shortages are going to become a crisis in certain industries -- we have to start today to get those in poverty who want a better life for themselves into programs that will give them the skills that our employers so desperately need."

Nationally, 43 states showed significantly no change in poverty from 2011. Poverty went down in only two states: Minnesota and Texas. Minnesota's poverty rate dropped to 11.4 percent in 2012. Poverty went up in Wyoming, New Jersey, California, Mississippi and New Hampshire. Mississippi has the highest poverty rate at 24.2 percent. New Hampshire has the lowest rate at 10 percent.

Nationally, the share of people without health insurance declined from 15.7 percent to 15.4 percent. In Duluth the uninsured rate is about half that: 92.7 percent of Duluth's population had health insurance in 2012, about the same as 2011's 92.8 percent.

Many of Duluth's residents below the poverty level receiving federal aid are working. In Duluth, 87.5 percent of the families receiving SNAP (food stamp) benefits had at least one worker in the family. More than a quarter, 27.5 percent, had at least two workers in the family.