Minneapolis's White Lie

In August 1973, Time magazine ran a cover of Minnesota Governor Wendell Anderson proudly holding up a fish. The accompanying story called Minnesota a “state that works,” and promised “The Good Life in Minnesota.” More recently, though, that cover motivated reflection on whether the state still deserves the moniker.

Derek Thompson’s recent article, "The Miracle of Minneapolis," is just one of many that trumpet Minneapolis as one of the best places in the nation to live. Certainly, many of Minneapolis's residents—myself included—have benefited from the city’s opportunities. Recent college graduates have little difficulty finding local work. The Twin Cities are home to more corporate headquarters per capita than anywhere in the nation. Young people who cannot find work in their own states move and build a life there, which means a large number of Twin Cities transplants are already educated members of the middle class.

What’s more, as Thompson noted, many transplants find it difficult to leave. Housing is more affordable than in other cities so long as you earn more than the minimum wage, and the suburbs have plenty of high-achieving public schools for people who choose to start families. In many cases, it is the American Dream. But then again, 60 years ago, so was Detroit.

It is uncomfortable to talk about race when one group’s success may be coming at the expense of another’s, but it is crucial in any discussion of the wealth and status of American cities. The cities that the press and city planners celebrate are places like Minneapolis (64 percent white), Salt Lake City (75 percent white), and Pittsburgh (66 percent white). These places have maintained a large white majority since their founding.

That's not true of the nation's less-wealthy cities. Detroit is the poorest city in the nation, and only 11 percent of its residents are white. Applying policies that work in a relatively white-heavy city, like Minneapolis, to a more diverse municipality without consideration for racial inequality will make the region vulnerable to economic disaster; poor and working-class residents will be relegated to areas of concentrated poverty, which would contribute to a city’s overall loss of wealth, a diminishing tax base, and a larger number of people dependent on city services.

Thompson argues that the real “miracle” is that Minneapolis has experienced wealth and success while still ensuring accessible housing, jobs, education, and social mobility for its poorer residents. The progressive policies that Minnesota enacted in the middle of the 20th century are admirable, but during that era only one percent of all of Minnesota’s residents were people of color. It is easy to enforce and encourage liberal safety-net policies when residents see people who look like them as the beneficiaries of these programs—one needs only to look at most Minnesotans’ home countries in Scandinavia to see how a homogenous population can result in inclusive social services.

Soon after publication of Thompson’s article, responses began appearing, challenging his evidence and arguing that Minneapolis’s success is not shared with its residents of color. A recent study by WalletHub, a personal-finance site, found that Minnesota has the largest racial poverty gap in the nation. Black residents in the Twin Cities live below the poverty line at a rate three times greater than that of white residents. Banks in the Twin Cities have been found to be nearly four times more likely to give high-income black residents subprime loans than their poor white counterparts. Minnesota consistently earns top national rankings for its students’ reading, math, and college-entrance exam scores, but it is one of the worst states in the nation for non-white students. While the studies are fresh, the Twin Cities’ communities of color—where most of Minnesota’s non-white population resides—have known and lived with these disparities for much longer.

Today, the non-white population of the Twin Cities has grown to 20 percent. Affordable housing developments are concentrated in only a few pockets of Minneapolis and St. Paul, creating the ghettos that mid-20th century policies avoided so well. If growing racial inequalities are not addressed, Minneapolis could find itself as one of the nation’s poorest cities when it comes to racial politics and urban decline.

The antithesis of Minneapolis today is Detroit. The two cities' demographic proportions are practically the inverses of each other. Detroit’s unemployment rate is high, and the population is largely undereducated and underinsured. Instead of being called miraculous, it declared bankruptcy in 2013.* The trajectories of these two cities, however, are not as different as one may think. The Twin Cities’ decline may just come later.

African Americans and immigrants from all over moved to Detroit in the beginning of the 20th century, enticed by manufacturing jobs. The ample supply of workers, and therefore consumers, allowed the automobile industry to flourish. After World War II, the Detroit metropolitan area thrived; the GI Bill allowed families to buy homes with yards, and their wages at the factories were more than enough to buy a car to let them travel from home to work. It seems hard to imagine now, but not too long ago, Detroit was the American Dream epitomized.

As the economy began to place less of an emphasis on manufacturing, Detroit took advantage of federal urban-renewal policies that helped American cities stave off the effects of deindustrialization in the 1950s and 60s. But its strategy for the use of these funds contributed to the city’s downfall. This money was put into the construction of large institutions downtown—stadiums, universities, and hospitals—that surrounding residents could never afford to patronize. A lack of investment in services for the city's residents, along with discrimination in housing and employment, kept black Detroiters in the city’s lowest economic tiers. This was an invisible problem for city officials, as they used their highest-earning residents to measure how the city fared as a whole.

When Detroit’s racial composition began to change, there were no attempts to rectify the actions that targeted and punished residents of color. That population grew quickly, and decreasing employment opportunities were increasingly preventing this community from contributing to the city’s economy. It cost Detroit greatly to deny this population a place to thrive, and it could cost the Twin Cities, too.

Of course, there are important differences between Detroit and Minneapolis. In the Twin Cities, the economy is more diversified and relies on stable white-collar employment rather than blue-collar labor. However, these two cities have comparable difficulties when it comes to their non-white populations. Detroit’s economic problems are directly related to policies and actions that deliberately excluded black residents from the city’s progress. This exclusion occurred while the city was championed as a welcoming middle-class haven that was ideal for people to start their adult lives—much like is Minneapolis today.

The policies that Thompson cites as responsible for keeping “the poorest areas from falling too far behind” were designed for a population that looks very different from what Minnesota looks like in 2015. The Minnesota Miracle Plan of 1971, which was mentioned in Thompson’s article, required all municipalities in the metropolitan Twin Cities area “to contribute almost half their growth in their commercial tax revenues” to a fund that would be invested directly back into the community. This served the area well until 2002, when the Minnesota Legislature revised its property- and income- tax systems. This resulted in a nearly 10 percent decrease in revenue-raising capacity between 1999 and 2002. Since 2002, 90 percent of municipalities in Minnesota have seen their tax revenues drop another nine percent. Even with these cuts the Twin Cities still experience lower overall rates of poverty than other cities around the country. But poverty is increasing, and it is largely centralized in the Twin Cities’ communities of color.

As the demographics of Minneapolis-St. Paul continue to change, it is clear that the area is ill equipped to deal with racial tensions. White Twin City residents express their discomfort with a more diverse city in interesting ways: a political "scandal" this past autumn dubbed Pointergate unproductively raised dubious questions about a new mayor, black men are harassed in the city’s public spaces, and municipalities bring criminal charges against protestors associated with the Black Lives Matter movement, all while the Twin Cities possess the highest rates of racial employment discrepancy in the nation. These issues will become more complex as the Twin Cities' immigrant population continues to grow.

For Minneapolis to remain successful, the progressive policies of the 1960s and 1970s must evolve to reflect the changing populations, prioritizing affordable housing, neighborhood integration, and investment in public education and health services. That would be the real miracle, and the model to transfer to other cities.

* This post originally stated that Detroit is bankrupt. The city formally emerged from bankruptcy on December 10, 2014. We regret the error.