A new Labor Day report looks behind commonly reported statistics to see who's winning and losing in Minnesota's current economy. Making a Living? The State of Working Minnesota, Labor Day 2000 finds that, although the state is enjoying strong economic growth and all levels of the workforce have seen some wage gains, many working people are falling behind.

Nan Madden, director of the Minnesota Budget Project, authored the study, with assistance from Molly Moilanen and Lisa Jordan of the Labor Education Service of the University of Minnesota.

Going beyond the averages

Madden said, "The analysis in this report goes beyond statewide averages and separates the population into groups based on family income or wages. This allowed us to identify which struggles are common to all workers, such as balancing family and work responsibilities, and those which fall more heavily on low- and moderate-income workers, like purchasing a home."

Jordan, a labor economist, commented on information in the report that, while Minnesota ranks 10th in the nation in the percentage of the workforce who are union members and union membership in the state is growing, the percentage of Minnesota workers who belong to unions has declined since the 1980s. "When union density declines, inequality grows," Jordan said. "It takes union power to narrow the wage and wealth gap between average working people and the wealthy."

Marcie Jefferys, fiscal policy director of the Childrens' Defense Fund of Minnesota, who assisted in the report's preparation said, "More parents working more hours has helped fuel the state's strong economy. But, most employers are not helping parents meet the challenges caused by the additional time away from home that work now takes. Employers, employees and public policy makers should join together to come up with solutions to make sure children are not the losers in this economy."

Publication of Making a Living? The State of Working Minnesota, Labor Day 2000 was made possible through funding and in-kind services from the Center for Urban and Regional Affairs (CURA) of the University of Minnesota, the Ford Foundation, the Labor Education Service of the University of Minnesota, the Minnesota AFL-CIO and the Minnesota Council of Nonprofits. Other organizational sponsors include the Coalition of Black Trade Unionists, the Children's Defense Fund of Minnesota, JOBS NOW Coalition and the Minnesota Farmers Union.

Making a Living? The State of Working Minnesota, Labor Day 2000

EXECUTIVE SUMMARY

Minnesota workers have realized many improvements in their standard of living during the 1990s, including wage and family income increases and a strong decline in unemployment. However, these general measures hide the fact that inequality is increasing, that increased incomes are largely due to more hours worked, and that basic costs ??-- particularly housing -- are out of reach for ordinary workers.

Low Unemployment Rate Disguises Disparities

Although Minnesota's unemployment rate has dropped to 2.8%, unemployment is considerably higher in the northern regions of the state. The unemployment rate also disguises the fact that many workers have a

relatively tenuous connection to the workforce. Nearly 19% of Minnesota workers work only part-time hours. The number of workers laid off also has not declined over time.

Wages Grow Unequally

Minnesota's low, median, and high wage workers all saw their wages increase during the 1990s. However, these wages did not grow at the same rate, and for many workers, increases in the 1990s made up for declines in the 1980s. Since 1979, the wages of low wage workers have grown 7.5%, median wages 8.6%, and high wages 13.3%. These uneven growth rates have led to greater wage inequality between workers.

Family Incomes Up, Because Families Work More

Minnesota's median family income grew faster in the 1990s than in any other state, reaching $67,140 for a family of four, an annual growth rate of 2.1% since 1989. However, national data show that increased

family incomes have come at the expense of more hours worked. The average U.S. worker spent 1,898 hours on the job in 1998, nearly two weeks per year more than in 1989. The average two-parent family with children worked a total of 3,452 hours per year, nearly four weeks more than in 1989. This makes it increasingly difficult for workers to balance work and family responsibilities.

Income Inequality on the Rise

Income inequality has been increasing in Minnesota. The incomes of the poorest 20% of families did not grow since the late 1970s relative to inflation, while the incomes of the middle 20% of families grew 16.6%, and the incomes of the top 20% of families grew 42.6%. The prosperity of Minnesota's economy has not been equally shared.

Basic Costs Outpace Income Gains

Minnesota workers are finding that basic costs are rising faster than their incomes. Housing in particular has become out of reach for ordinary workers. Median home prices in the Twin Cities have increased 61% since 1995, and have grown even faster in other parts of the state.

For a copy of the report go to the Minnesota Budget Project's report at http://www.mncn.org/bp/laborday.htm