## Stark Wealth Disparity in the Twin Cities: A Generational Divide
A new database reveals a staggering wealth gap in the Twin Cities metropolitan area, with the wealthiest communities boasting net worths approximately ten times greater than the poorest. Median household net worth in affluent western suburbs like Lake Minnetonka, Plymouth, and Maple Grove surpasses $400,000. In stark contrast, parts of south Minneapolis and west St. Paul report median net worths closer to $40,000. This disparity underscores a broader trend of wealth concentration in Minnesota, mirroring national patterns.
Net worth, calculated as assets (cash, retirement accounts, home equity) minus debts, provides a clear picture of economic well-being. For middle-class families, home equity typically constitutes the largest portion of their net worth. The data reveals a significant number of households with negative net worth, indicating that their debts exceed their assets. Nationally, this disparity is even more pronounced, with the wealthiest areas, such as Palo Alto and New York City suburbs, exhibiting median family net worths exceeding $1 million, while the poorest communities (in cities like New York, Houston, and Milwaukee) average a mere $18,000.
This chasm, according to Tom Kemeny, a compiler of the database, perpetuates itself across generations. Wealthier communities, he explains, benefit from higher property taxes and increased philanthropy, leading to superior resources in education, healthcare, transportation, and infrastructure. These advantages create a cycle that benefits subsequent generations, widening the gap between affluent and impoverished communities.
The study’s geographic focus on Public Use Microdata Areas (PUMAs)—census divisions with at least 100,000 people—allows for granular analysis of wealth variation within densely populated counties. Data for the database is drawn from the federal Survey of Consumer Finances (assets and debts) and the Census Bureau’s American Community Survey (demographics, income, and homeownership). This comprehensive approach reveals a long-term trend: over the past six decades, wealth concentration in Minnesota has intensified. In 1960, the bottom 50% of families held about 10% of the state’s wealth, while the top 1% held approximately 17%. By 2010, the bottom 50%’s share had nearly halved, while the top 1%’s share more than doubled. This trend showed little change between 2010 and 2020.
Several factors contribute to this escalating wealth inequality. These include the decline of high-paying blue-collar jobs, the concentration of white-collar employment in coastal and technologically advanced metropolitan areas like the Twin Cities, and tax policies that disproportionately benefit the wealthy. The United States exhibits greater wealth inequality than most other democracies. Further exacerbating this issue are significant racial wealth disparities, largely stemming from historical discriminatory practices. Minnesota, unfortunately, ranks among states with the worst racial wealth disparities, a consequence of its history of redlining—the denial of mortgages and other financial services to non-white individuals. The effects of these historical policies are clearly visible in contemporary maps of neighborhood inequality.
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By Christopher Ingraham, Minnesota Reformer, January 28, 2025
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