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The Inclusive Economy
CFED Research Release Highlights Twin Cities' Financial Insecurity
By Sean Luechtefeld on 10/18/2011 @ 11:30 AM
New data released today by CFED's Research Team reveals enormous disparities along racial lines in how people are faring in the Twin Cities during the economic downturn, particularly in the areas of homeownership, savings and overall income.
CFED’s Asset & Opportunity profiles for the Twin Cities were released at a St. Paul forum featuring state and local elected officials and national experts, including Mayor Chris Coleman, State Rep. Morrie Lanning, St. Paul City Council Member Melvin Carter, Minneapolis City Council Member John Quincy and Commerce Commissioner Michael Rothman. Our very own Jennifer Brooks, Director of State & Local Policy, was on-hand to speak at the event as well.
“We hope these profiles and the forum today fuel an ongoing conversation about income and asset poverty in the Twin Cities and statewide, “ said Brooks. “It is clear that many families are suffering. But we have found ample evidence that local leaders, working in partnership with non‐profits, have the power to create highly effective programs that help families build wealth and save for the future.”
CFED's Asset & Opportunity profiles provide a comprehensive look at the financial stability and economic resiliency of families in general, and those released today take a close look at Minneapolis and Hennepin County and at St. Paul and Ramsey County. They offer the most comprehensive data available on the economic challenges facing households in the metro area in comparison with state and national figures. Among the key findings in Minneapolis & St. Paul:
- While more than 63 percent of whites own homes in the Twin Cities, just 23 percent of blacks in Minneapolis and 26.4 percent in St. Paul are home owners. This is attributed, in part, to high home costs. The average national home cost is 3.7 times greater than median income, but is 5 times greater in Minneapolis and 4.5 times greater in St. Paul.
- Low incomes and lack of assets are having a profound effect on the ability of Twin City residents to save for the future and build financial security. Fully 63 percent of black Twin City residents, compared with approximately 25 percent of whites, are living in “asset poverty,” meaning they do not have enough assets to live at the poverty level ($22,314 for a family of four) for three months if they lose their main source of income. The overall rate for people of color living in asset poverty was also quite high (57 percent in Minneapolis and 52 percent in St. Paul).
- While median income for whites was nearly identical to the national rate of $52,175, the medium income for black households was just $21,747 in Minneapolis and $26,031 in St. Paul.
Downtown Minneapolis
“These data paint a troubling portrait of the recession’s impact on the Twin City’s most vulnerable families. Our region’s economy cannot prosper with so many residents lacking the income and assets to achieve financial security,” said Ron Elwood, supervising attorney for the Legal Services Advocacy Project, which hosted the forum along with CFED and Greater Twin Cities United Way.
At the forum, policy makers presented their reactions to the data and discussed current programs and future plans aimed at expanding financial security and opportunity. A panel of local experts also provided information about efforts currently underway that are helping struggling Twin City residents build wealth by connecting them to safe and affordable financial products and services, and increasing their access to income‐boosting benefits and tax credits.
“These innovative programs are making a significant difference for families in our area. But they need to reach more people. Local, state and national leaders working with those of us in the non‐profit sector have an opportunity to identify and support strategies that can help people achieve greater financial security,” said Andrea Ferstan, director of income strategies for Greater Twin Cities United Way.
CFED has been working with cities across the country to expand access to mainstream banking, financial education and income and asset‐building opportunities, as well as help families protect the assets they have so they can become more financially stable. The organization is assisting Twin City officials to help bring about similar changes in the metropolitan area and throughout the state. To read the Minneapolis Asset & Opportunity Profile click here; to read the St. Paul Asset & Opportunity Profile, click here.
The Asset & Opportunity Profiles were made possible with support from Northwest Area Foundation.
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