Opinion: What you may not know about greater Minnesota

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A longtime relationship between neighbors isn’t always easy. Over the years, people can change​, and sometimes old assumptions get in the way of seeing the person the other has become. We wave from across the fence, maybe borrow a snowblower or tool now and then, but we don’t always take the time to really talk. And when we don’t talk​ ​—​ ​like, really talk​ ​—​ ​misunderstandings can grow.

At the Center for Rural Policy and Development, we sometimes think about the relationship between greater Minnesota and the Twin Cities in this way​ ​—​ ​like neighbors who’ve shared a property line for generations. Both have changed over time, yet sometimes each still hangs onto old ideas about the other. And those assumptions can lead to tension, mistrust​ and missed opportunities to work together.

So maybe now is a good time to have that long-overdue conversation on the front porch without judgment or defensiveness. Just a real effort to listen and better understand each other.

Since the ​c​​​enter is focused on rural Minnesota, we’ll get the ball rolling by sharing some surprising shifts and long-term trends you may not have noticed about the communities that make up greater Minnesota.

In 1980, only 2% of greater Minnesota’s population was Black, Indigenous or persons of color (BIPOC). (Greater Minnesota is defined as the 80 counties outside the Twin Cities seven-county area.) Now this group makes up 14% of the population in greater Minnesota​ (compared to 23% for the state as a whole), bringing much-needed residents to the labor force, not to mention adding kids to our schools and ​more​​ cultural richness​ to our communities​.

In fact, the counties in the state with the largest percentages of BIPOC individuals are in greater Minnesota. Mahnomen County’s population is 55% ​BIPOC ​thanks to its large Indigenous population on the White Earth Indian Reservation, followed by 47% in Nobles County in southern Minnesota​, where many Latino, Asian and East African immigrants now work in Worthington. Here are the top five counties in the state for BIPOC populations:

While the overall percentage has grown a lot, however, it’s also worth noting that rural Minnesota’s diversity is concentrated in specific pockets and communities around the state.

Believe it or not, rural Minnesota can be one of the best places to find work right now. Since the Great Recession in 2007-09, most regions in greater Minnesota have had a higher job vacancy rate than the Twin Cities seven-county metro. The high vacancy rates are partly due to the economic growth happening in greater Minnesota, but they also have to do with our population being on average older. Growing businesses and a retiring workforce equals lots of open jobs.

Immediately after the pandemic, job vacancy rates spiked to around 10% across greater Minnesota. Those rates have settled down a bit recently, but​ are still hovering around 5% or higher, whereas in the Twin Cities metro, the rate sits at 3.8%. Greater Minnesota’s higher job vacancy rates ​mean there are still plenty of employers looking for workers.

Not anymore. That might have been true in the 1980s, but our jobs have had to evolve in educational requirements, sophistication and, above all, pay. But yes, it’s no secret that wages in rural areas are lower than in urban areas.

If we look at personal income, people in the most rural areas of Minnesota make an average of $61,055 per person compared to $79,926 in the state’s most urban counties. Many policymakers, researchers and economic developers point to this wage gap as a reason for labor force shortages in rural areas.

The fact, though, is that this gap has been steadily shrinking. Per-capita personal income in our most rural counties has grown by 153% since 2001, far exceeding the 110% wage growth in Minnesota’s urban counties.

The kicker, too, is that in many parts of the state, the cost of living is lower, especially in terms of housing and child care, the two big economic differences between greater Minnesota and the Twin Cities area.

In general, the higher the wage, the better your ability to meet and exceed the cost of living no matter where you live. Twin Cities metro counties sit at the top for median wages, but they also have the highest cost of living in the state. Meanwhile, in the most rural counties, the cost of living is 15% to 30% lower.

The map above is one way of showing how the cost of living in each county compares to its median wage (half the residents’ wages are above the median, half are below it). Some of the state’s more urban counties with higher median wages, such as Hennepin, Ramsey and Olmsted (Rochester), exceed the cost of living by over 150%. In contrast, wages in rural counties like Roseau, Pennington, Koochiching, Stevens and Brown are about 60% to 70% of Hennepin County’s median wage. Because the cost of living is lower in those rural counties, though, their median wages cover the cost of living also by about 150%.

On the other hand, counties just north of the Twin Cities and stretching into the central lakes region have median wages that barely cover the cost of living there, partly due to their unique housing markets and local economies. There are nuances, but overall, living in greater Minnesota can be a good deal.

Shouldn’t there be too much housing​ in greater Minnesota​?

The answer is: not necessarily. Household sizes have been shrinking due to a combination of lower birth rates, increasing death rates (the leading edge of the baby boom generation is turning 80 next year) and the growth of single-person households. The birth and death rates determine the change in population, but shrinking household sizes result in fewer people using up more housing.

For example, if your town had a population of 100 and 75% of that population lived in three-person households while the other 25% lived in one-person households, you’d need 50 houses: 25 for the larger households and 25 for the smaller ones.

However, if you had 100 people with only 30% living in three-person households and 70% living in one-person households, you’d need 80 houses, 10 for the larger households, 70 for the smaller households. And as kids leave and spouses pass away, those three-person households gradually turn into two- and then one-person households.

Since 1970, the number of households has increased in all parts of the state, including in counties that saw population loss.

So greater Minnesota isn’t quite what it used to be. It’s more diverse, a great place to find a job and a region with rapidly rising incomes, but the growing number of households is also putting pressure on local housing markets. It’s good change for the most part, and more and more people are finding this out for themselves as they make their homes in Minnesota’s rural counties and small cities. It’s good change we can all live with and celebrate.

Glad we had this chat.

Kelly Asche is a senior researcher for the Mankato-based Center for Rural Policy and Development. Marnie Werner is the center’s vice president of research and operations.