An article about the income gaps in our state by Madison McVan in The Minnesota Reformer caught my eye. The Reformer is an independent, non-profit news organization in Minneapolis that publishes online.
Income and wealth disparity has increased for the last few decades, but has worsened recently. For those in the lower levels, it limits social and economic mobility. It often affects a person’s life expectancy and access to essential services.
According to Madison’s reporting, Minnesota is in the top five states with the highest average income, yet half the population earns less than $62,500 annually. These figures came from the Federal Reserve Bank of Minneapolis.
The US Census Bureau puts the median household income in Cook County at $65,045. Almost 10 percent of the population in Cook County lives below the poverty level, which is about $30,000 for a family of four.
In the Arrowhead region, the income gap threatens tourism and health care.
In the case of tourism, the wealth gap indicates the possibility of a shrinking market of people able to afford a multi-day visit to the North Shore and the Boundary Waters. I hope the major resorts and tourism promoters have considered this.
As for health care, as costs continue to rise and incomes aren’t increasing fast enough, more people cannot afford to go to the doctor.
When I was a business owner last century, we did a SWOT Analysis at least once a year. It examines the organization’s Strengths and Weaknesses and future Opportunities and Threats. We reviewed it at least quarterly, much to our managers’ dismay. The threat of rising inequality wasn’t front of mind back then (I’m old), but it would sure be a threat I’d have in mind if I were running a business or government agency today.
For craps and laughs, I decided to have a look at how much disposable income there might be for that median-income household in Cook County, which comes out to $5,420 per month.
After paying payroll and income taxes, housing and transportation take a significant chunk–at least 30% to 40%.
Health insurance, deductibles/co-pays, groceries, snacks, a daily coffee, and occasional adult beverages hit pretty hard. The median household is left with a few hundred each week to pay for student loans, clothing, daycare, toys, internet service, school supplies, and veterinary bills. An unforeseen roof repair or water heater replacement is brutal.
Little disposal income remains for recreation and leisure.
Life is pretty good when you don’t need to worry about whether to pay the doctor’s bill or buy groceries. Life is pretty good when you can take vacations without worrying too much about the costs. But the stress can become overwhelming when you’re living from paycheck to paycheck.
In the capitalist economy that is ours, one must make at least a middle-class income large enough to build capital for retirement. As the income gap widens, leaving fewer able to gain or create capital, it is more of a problem for all of us.
The threat from income and wealth disparity is the chronic financial stress the average person faces with little hope of getting ahead and how that stress plays out for our politics, community, and security.
