Minnesota is renowned for its economic diversity and is home to several Fortune 500 companies, yet the state has long grappled with stark economic disparities based on race. These disparities are more pronounced than in many other states, given Minnesota’s white population tends to fare better economically than elsewhere — exacerbating the visible gap between communities of color. Historical practices, such as redlining, have left lasting systemic barriers for people of color, especially among Black residents — preventing equitable access to opportunities for more marginalized groups.
Unemployment rates, regardless of age and education level, affect communities of color significantly more than white populations. Additional economic data suggests an active existence of the 80/20 ratio, which compares the top 20% of income earners to the bottom 20%. This ratio shows that the wealthiest Minnesotans make almost three times what the poorest 20% earn.
Economic inequality manifests in limited access to critical resources like housing, education, and employment. Many communities remain shut off from wealth-building opportunities that could help bridge the gap. Despite Minnesota’s reputation for inclusivity, particularly for first-generation refugees, the system often fails to provide the support necessary for lasting change.
According to data from the Minnesota State Demographic Center, about 27% of Black residents live in poverty, which is significantly higher than the state’s overall poverty rate. Long-term residents of color struggle to achieve parity in housing, education, and income levels compared to other states. Immigrants, while welcomed initially, often face barriers to long-term success over generations caused by systemic inefficiencies in integration and support systems.
White Minnesotans are 15 percentage points more likely to graduate from high school than Black Minnesotans. Racial gaps in standardized test scores also are significant and increasing. Marcus Owens, a national leader in economic and financial systems change and Principal Consultant at Nawe, Inc., explains: “The opportunities our children are having are not matched with their aspirations. … Schools have not adapted to the realities that people have, and as a result, accessible careers can be limiting.” Initiatives like the Northside Achievement Zone (NAZ) are stepping in to support students, but broader systemic changes are still necessary.
Economic inequality also varies significantly between urban and rural areas in Minnesota. Differing access levels to broadband, housing, and childcare exacerbate the divide between the Twin Cities metro area and outstate regions. In outstate communities like Worthington and Duluth, mining and meat-packing industries provide jobs but lack infrastructure investments that could make these areas sustainable hubs for economic growth.
A noteworthy solution under discussion is Project 110, which challenges traditional job criteria and emphasizes alternative pathways to employment, such as apprenticeships and staggered job opportunities. These efforts aim to close the urban-rural gap by addressing systemic job access and retention barriers.
Disparities in Minnesota’s labor market are evident across industries. In health care, for example, Black workers are concentrated in lower-wage in-home health care roles, with limited opportunities for advancement. Similarly, construction, a critical industry in the state, has barriers that make it challenging for underrepresented groups to secure stable employment.
Owens said the gig economy adds another layer of complexity: “Individuals are taking on second types of jobs through Uber, DoorDash, etc., yet pay is an issue. We need to create more ways and pathways for advancement.” Addressing wage inequality requires rethinking job readiness pathways, diversifying options beyond traditional four-year degrees, and ensuring equitable access to high-skill, high-wage opportunities.
Minnesota has historically implemented progressive taxation and a robust social safety net, yet these measures alone have not been enough to close the economic gap. While policies like affordable housing programs and workforce development initiatives have made incremental progress, systemic barriers persist.
One promising initiative is the Ground Break Coalition, a partnership of 40 institutions working to unlock financial systems for wealth creation in Black communities. By providing forgivable loans, low-cost financing, and pathways to homeownership, the coalition aims to foster generational wealth and close equity gaps.
Education is regarded as a cornerstone for economic mobility, but Minnesota’s educational system faces challenges in providing equitable opportunities. Experts note that a widening gap exists between affluent areas and low-income neighborhoods. Students in underserved communities face multiple systemic barriers, from outdated curriculum structures to unequal access to resources.
Owens says workforce development programs must also adapt to the demands of the digital age. Investments in vocational training, STEM programs, and industry partnerships are critical for preparing disadvantaged populations for emerging industries.
The path forward requires bold, systemic changes. Solutions must focus on addressing root causes of disparities, fostering sustainability, and creating wealth-building opportunities. “We cannot settle for incremental change. We need to be bold, develop, and share a vision that inspires us all regardless of what we look like or who we are,” Owens says.
This includes:
Investing in community infrastructure by building anchors in underserved areas, such as affordable housing, reliable broadband, and childcare facilities.
Expanding access to wealth-building opportunities by ensuring equitable pathways to homeownership, education, and entrepreneurship.
Promoting equity in governance and business by encouraging public-private partnerships to develop inclusive policies and practices.
All stakeholders must work collectively to achieve meaningful change,” he says. Policymakers, businesses, educators, and grassroots organizations need to align their efforts toward creating a Minnesota where prosperity is accessible to all. Public engagement also is vital in addressing disparities. Minnesota can pave the way for a more inclusive and equitable future by fostering conversations about economic inequality and encouraging participation in solution-building.
Tonya Jackman Hampton is an author with a doctor of education and an MBA. She is a native Minnesotan.