The legacy of segregation continues to affect investment and development patterns across the United States and is limiting inclusive economic growth in the Minneapolis-St. Paul region, a report from the Center for Economic Inclusion finds.
A companion report to the Minneapolis Saint Paul Regional Economic Development Partnership's MSP Regional Indicators Dashboard, the report, Indicators of an Inclusive Regional Economy (6 pages, PDF), examined fourteen indicators in four categories of economic inclusion: inclusive growth, economic development, human capital, and transportation and access. According to the report, while the employment rate for African Americans in the region is up nearly 10 percentage points since 2013, wages for people of color continue to lag those of white Americans. The report also found that about half of Latinx, a third of African Americans and Native Americans, a quarter of Asian Americans, and a fifth of whites don't earn enough to lift an average-sized household above 185 percent of the poverty line. And while a postsecondary credential is perhaps the most important factor in increasing income and wealth, fewer than half of students of color at Minnesota's two-year colleges are graduating or transferring within three years and fewer than half of African-American and Native-American students at the state's four-year institutions are graduating within six years.
The data also show that African Americans account for 8.7 percent of the region's population but own only 1.7 percent of local businesses; that since 2013 annual bank lending to small businesses in census tracts with a majority of people of color grew just $2.5 million, compared with $120 million in majority-white census tracts; and that in 2017 middle-income African-American applicants were twice as likely to be denied a mortgage than were white applicants, while more than 60 percent of low-income renters of all racial/ethnic groups spent at least 30 percent of their incomes on housing. In addition, regional development patterns have limited access to jobs in high-poverty areas and made owning a vehicle a near-necessity, creating hardships for low-wage earners.
"Our pervasive inability to fully maximize the talent of people of color in our schools, workplaces, supply chains, and economic ecosystems is having devastating effects on our regional economy and the very fabric of Minnesota," Center for Economic Inclusion founder and CEO Tawanna Black writes in the report's introduction. "Each year, our economy loses billions of dollars as we allow racial and economic inequities to persist. It's time for change."