Minnesota Gov. Mark Dayton, right, applauds the Grammy Award -winning Okee Dokee Brothers, right, who played before a crowd of St. Paul Promise Neighborhood Freedom School children at the State Capitol, Tuesday, Aug. 20, 2013. (AP Photo/Jim Mone)

The Atlantic this month heaps praise on Minneapolis, marveling at the city’s seemingly contradictory accomplishments of high employment, prosperity and affordable housing.

As Derek Thompson writes in the March issue:

What’s wrong with American cities? is a question that demographers and economists have debated for years. But maybe we should be looking to a luminary exception and asking the opposite question: What’s right with Minneapolis?

Well, to start, the area is a corporate hub that employs a generous swath of educated middle-class workers. The region possesses an ample supply of housing, too, its suburbs sprawling free in every direction. The city also is  isolated enough that people find it hard to leave. Where would you go? Iowa?

On top of these advantages, Thompson credits two policies that spread out the rewards and responsibilities of growth. In 1971, municipalities in the Minneapolis-St. Paul orbit agreed to share a portion of their commercial property tax revenue. Then, in 1976, Minnesota passed a law requiring every neighborhood in the metro region — both the suburbs and the inner core — to build affordable housing.

These initiatives helped smooth the jagged inequities that often accompany increased prosperity. But how much did they contribute to what Thompson calls the Minneapolis “miracle”? And just who benefited from these policies?

The questions arise because Minneapolis has another quirk, one that’s a bit more difficult to talk about: It’s really white. In the 2010 Census, about 79 percent of people in the Minneapolis-St. Paul-Bloomington area said they were non-Hispanic white. Only 8.4 percent said they were non-Hispanic black.

Consider the other large metropolises that Thompson praises for being both upwardly mobile and affordable. These, too, are places that are extremely white: Salt Lake City (75 percent white, 1.8 percent black) and Pittsburgh (87 percent white, 9.2 percent black). The New York metro area, in contrast, is less than half white.

Race is directly related to the question of whether children born to poorer parents will prosper. The authors of the Harvard-Berkeley study of intergenerational mobility devote a section to discussing the connection. “The main lesson of this analysis [in this section] is that both blacks and whites living in areas with large African American populations have lower rates of upward income mobility,” they write. They cannot pinpoint why, exactly, but their calculations say that segregation plays a role.

In the 1970s, when the equitable growth policies were being passed, the Minneapolis area was 94 percent white and 2 percent black. Few people lived in segregated areas, because few people were minorities to begin with.  It’s easy to pass redistributive tax agreements when your neighbors are more or less homogenous. (This is another way that Minneapolis, where many people have Scandinavian ancestry, resembles the welfare nations of northern Europe.) The city’s successes have the whiff of a chicken-or-egg riddle. Minneapolis has had some success combating urban rot and maintaining a large, healthy middle class. But it’s also never had to seriously struggle with these issues.

The picture is less rosy these days. Since the 1970s, the city’s minority population has swelled, and segregation has worsened, particularly in its schools. About 62 percent of black students attend high-poverty schools, compared with 10 percent of white students. Beyond Minneapolis, the state of Minnesota has one of the largest gaps in black-white student achievement. Recently, WalletHub analyzed the black-white gap in census indicators such as household income, homeownership and educational attainment. It ranked Minnesota as the worst state for financial inequality.

Over the past 40 years, other cities have been puzzling over how to share opportunity with people who had been systematically denied it for centuries. Minneapolis largely sat out that debate, and its lack of experience shows. Consider these maps from the Urban Institute of people living below the poverty line.



Poverty, particularly nonwhite poverty, has been pooling in the city’s center for decades. As Thompson mentions, the city once had vigorous schemes to bust up concentrated poverty. Those efforts have fallen by the wayside, and today, low-income housing is mostly being built downtown, further clustering the poor. The MinnPost noted in 2010 that Minneapolis has race and income gaps between its urban core and wealthy suburbs and is doing worse on these measures than peer cities such as Denver, Seattle and Portland. 

This is not to dispute that the Twin Cities area has a lot of comfortable, affordable neighborhoods, which is the premise of the Atlantic’s piece: Minneapolis has good jobs, and living there is fairly cheap. But it is also developing serious problems with racial disparities and segregation, issues that its equitable-growth policies have done little to fix.