{"id":311091,"date":"2025-11-24T16:20:09","date_gmt":"2025-11-24T16:20:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/311091\/"},"modified":"2025-11-24T16:20:09","modified_gmt":"2025-11-24T16:20:09","slug":"hows-minnesotas-economy-it-depends-on-your-income-bracket","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/311091\/","title":{"rendered":"How\u2019s Minnesota\u2019s economy? It depends on your income bracket"},"content":{"rendered":"

On paper, Minnesota\u2019s economy looks solid. Jobs remain near record highs<\/a>. Economic output is growing<\/a>. Major employers, from the Mayo Clinic to 3M, are hiring. And the state\u2019s unemployment rate<\/a> remains below the national average<\/a> \u2014 a statistic often cited as proof of broad economic health.<\/p>\n

On the ground, the story feels different. Many Minnesotans experience a daily reality marked by high prices, shrinking financial cushions, and a feeling of being stuck in their jobs. And yet, as they read positive headlines and see others thriving, many are left with a pervasive sense that the economy is working well \u2014 just not for them.\u00a0<\/p>\n

And economists say both impressions are true, rather than contradictory. Minnesota isn\u2019t experiencing one post-pandemic recovery. It\u2019s experiencing two.<\/p>\n

\u201cThe top 10 percent of income earners are responsible for 50 percent of consumption,\u201d said Tyler Schipper, associate economics professor at the University of St. Thomas. Moody\u2019s Analytics recently reported<\/a> that top earners now account for a higher share of spending than any point since it started tracking the figure in 1989.\u00a0<\/p>\n

Related: Minnesotans are changing spending habits as inflation keeps squeezing budgets<\/a><\/p>\n

\u201cSo when we measure economic activity \u2014 GDP, retail sales \u2014 we\u2019re really observing the behavior of people who are doing relatively well.\u201d Aggregate data like these indicators \u201cdoesn\u2019t give every household an equal vote,\u201d he said.<\/p>\n

Measures that treat each person equally, regardless of income, tell a different story. Consumer sentiment surveys measuring how people feel about the economy show falling confidence. The University of Michigan\u2019s widely watched confidence index dropped <\/a>6.2% from October to November and is down nearly 30% from a year earlier. The last time Americans, on average, expressed a net positive view of the U.S. economy was February 2020<\/a>.<\/p>\n

That divide, between strong top-line indicators and sinking household outlooks, can be a hallmark of what is sometimes called a \u201cK-shaped\u201d economy. It\u2019s not a perfect metaphor, but it has become a useful visual shorthand: one group climbing upward, another slipping or stagnating.<\/p>\n

\u201cWhen averages look good but half the population feels terrible, that\u2019s not a contradiction. It means the income distribution has widened,\u201d Schipper said.\u00a0<\/p>\n

That gap can be shown using a number of indicators and trend lines. But it can also be seen in the lived experience of Minnesotans who find themselves on opposite sides of this gulf.<\/p>\n

Barry: \u201cIt\u2019s not my economy\u201d<\/p>\n

Barry Page, 68, earns over $900 a month in Social Security and pays more than $1,000 in rent. He has been looking for work since January, when an arrest \u2014 later deemed improper with the charges being dismissed \u2014 led to the loss of his job as an industrial painter. Despite the case\u2019s dismissal and expungement, he says the record still haunts his job applications and background checks.<\/p>\n

\u201cI\u2019ve been trying to get a job for almost a year,\u201d he said on a recent afternoon while waiting for the Metro Green Line at a University Avenue fast-food restaurant in St. Paul and picking at his french fries. \u201cThey look at that computer and they say, \u2018He\u2019s too old,\u2019 and that\u2019s that.\u201d<\/p>\n

\"\"Barry Page at his apartment on Wednesday, Nov. 19, 2025, in Brooklyn Park, Minn. Page receives about $900 in Social Security per month, but pays more than $1,000 in rent. Credit: Ellen Schmidt\/MinnPost\/CatchLight Local\/Report for America<\/p>\n

His monthly expenses \u2014 rent, groceries, utilities \u2014 exceed his income before he has bought food for the week. \u201cIf I put all my Social Security check toward rent, I can\u2019t pay my gas bill, my electric bill. I have to have a job.\u201d<\/p>\n

A fast-food meal that once cost $8\u20139 now runs him $15. \u201cYou get what they give you,\u201d he said, holding up a sandwich he described as \u201csalad with bread.\u201d\u00a0<\/p>\n

He\u2019s resigned himself to paying prices he never would have two years ago. But he\u2019s still angry that companies are able to charge those high prices, because higher earners can afford them.<\/p>\n

\u201cSociety sets prices for them, not us. They can afford it. We\u2019re struggling to live in their economy,\u201d he said, referring to higher-income Minnesotans. \u201cIt\u2019s not my economy.\u201d<\/p>\n

Page relies on friends, including a pastor and a friend in Washington, D.C., that he\u2019s currently waiting on a call from, to keep him afloat. \u201cIf it wasn\u2019t for them, I\u2019d be on the streets,\u201d he said.<\/p>\n

For him, like millions of other Minnesotans, the economy isn\u2019t abstract. It isn\u2019t a graph. It\u2019s an increasingly unreliable ladder, where the rungs feel less stable today than they did the day or the year before.\u00a0<\/p>\n

Joe: \u201cWe\u2019re tightening up, but we\u2019re fine.\u201d<\/p>\n

Twenty miles away, on the other arm of Minnesota\u2019s economic trajectory, is Joe Mueller, a real-estate agent and owner of a growing rental portfolio. He said his companies collectively gross around $1.25 million a year, though his net take-home is likely less than half that. He describes himself as someone who once \u201ccame from nothing.\u201d He used to sell real estate out of a rusted $400 pickup that he\u2019d park around the block from showings.\u00a0<\/p>\n

Now, Mueller occupies a financial reality most Minnesotans will never see, as a successful real estate agent and owner of The MOVE Group at RE\/MAX.<\/p>\n

As prices have climbed, he and his wife have trimmed some discretionary spending \u2014 ending vacations earlier, opting for cheaper flights, being \u201cmindful of waste.\u201d But those adjustments aren\u2019t necessary, but rather precautionary.<\/p>\n

\u201cWe don\u2019t stress over the price of eggs,\u201d he said. \u201cThat\u2019s a blessing, and I recognize that it\u2019s not the same for everyone.\u201d\u00a0<\/p>\n

When prices rose, he didn\u2019t go without; he optimized his spending to match the happiness it brought him and his family. \u201cIf you can do a $5,000 vacation for $3,000 and still get 90 percent of the experience, that\u2019s great,\u201d he said.<\/p>\n

When asked about economic worry, he rejected the word. He prefers \u201cprepared.\u201d \u201cEvery economy has cycles,\u201d he said. \u201cYou adjust. You weather it. You don\u2019t pull the fire alarm.\u201d<\/p>\n

Mueller\u2019s experience is emblematic of high-earning Minnesota households. Like everyone, they recognize conditions have shifted compared to before the pandemic. But they are able to recalibrate their spending and lifestyle from a position of confidence, not desperation.\u00a0<\/p>\n

More broadly, and in stark contrast to Page\u2019s outlook, for Mueller, the economy is not a threat. It\u2019s a system that still works, as long as you stick to the right strategies, maintain the right buffers, and stay in the right mindset.<\/p>\n

Why economists say these two realities can coexist<\/p>\n

Mueller and Page are not symbols \u2014 they\u2019re Minnesotans living through the same macroeconomic conditions but experiencing them in fundamentally different ways.<\/p>\n

Mueller\u2019s household has buffers \u2014 equity in real estate, cash flow from rentals, diversified income, and enough discretionary spending to adjust when he needs to.<\/p>\n

\u201cWhen things tighten, we tighten,\u201d he said. \u201cIf a recession comes, we\u2019ll weather it. We live below our means, and we\u2019re willing to dial back the extras.\u201d<\/p>\n

Page\u2019s household has no buffers and no margin to absorb a surprise.<\/p>\n

\u201cWhen I was working, I was good,\u201d he said. \u201cI was bringing home $2,500 to $3,500 a month. But now \u2014 now I\u2019m getting $967 and rent is $1,035. I ain\u2019t got nothing left.\u201d<\/p>\n

How can their experiences be so disparate, and why are their trajectories diverging instead of converging?\u00a0<\/p>\n

Economists say the trend of divergence is no longer simply an artifact of the pandemic or a short-term mismatch between supply and demand. Instead, it reflects a deeper pattern of different groups moving through fundamentally different economies.<\/p>\n

Related: Minnesota economists, researchers fear politicization of jobs data\u00a0<\/a><\/p>\n

Perhaps most alarming for those who have held traditionally middle-class jobs \u2014 police officers, teachers, manufacturing supervisors, and many others \u2014 is that this is no longer a low-income vs. high-income dichotomy. Labor market trends, combined with inflation, means many middle and upper-middle-income households are struggling to make ends meet and are only one layoff or emergency from slipping down the rungs of the income ladder.<\/p>\n

The orthodox view of Minnesota\u2019s economy \u2014 low unemployment, steady job growth, high labor-force participation \u2014 is not inaccurate. But those averages have masked a widening split within the state\u2019s households, one that economists say has been building quietly for years and is now showing up more plainly in certain data points.<\/p>\n

\u201cYou really can\u2019t talk about one economy anymore,\u201d said Kjetil Storesletten, a macroeconomist at the University of Minnesota. \u201cYou have multiple trajectories depending on assets, education, and where you sit in the labor market. The aggregate number is just the weighted summary of all of those realities.\u201d<\/p>\n

Those \u201cweights\u201d matter. When higher-income households \u2014 who both earn more and spend far more per person \u2014 continue to spend, the economy\u2019s overall indicators look resilient even if many other households are straining to just keep up with the basics.\u00a0<\/p>\n

\u201cWe observe an aggregate number, but behind it are many separate distributions moving differently,\u201d he said. \u201cAverages can hide enormous disparities.\u201d<\/p>\n

Read more: Not just vibes: These economic indicators raise concerns about Minnesota\u2019s economy<\/a><\/p>\n

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