Moving Minnesota Out of Poverty
Minnesota Health Plan
Information and Resources
by Senator John Marty
March 3, 2017
Eight years ago the Legislative Commission on Ending Poverty by 2020 issued its final report. As the name of the commission indicates, the legislature recognized the scope of the problem would require an extended timeline for reaching the goal of ending poverty. Unfortunately, 2020 is rapidly approaching, yet little progress has been made. In some ways Minnesota is moving backwards.

As a co-chair of the former Poverty Commission, I call on Minnesotans to push the state forward and urge state leaders to adopt policies to move all Minnesotans out of poverty. I recently introduced the Moving Out of Poverty bill, SF 1318, which might be the single biggest step towards ending poverty that Minnesota has ever taken.

Senate File 1318 would:
  • Establish a $15/hour minimum wage through a gradual five year phase-in ($13/hour for small businesses)

  • Strengthen the Working Family Tax Credit—more than doubling the tax credits that low income workers receive (making it equal to 75% of the federal Earned Income Tax Credit)

  • Fully fund the Child Care Assistance Program (CCAP) so all low-income working parents can get quality, reliable childcare, and eliminating the multi-year waiting lists. In addition, by raising reimbursement rates (to cover costs of childcare at the 75th percentile of local providers), parents will have more options and can choose high-quality care, childcare workers will earn a decent wage and providers can afford additional training in child development.

  • Provide a $300/month increase in the MN Family Investment Program (MFIP) grants. Payments in MFIP have not been increased in over thirty years.
These investments in moving people out of poverty would be funded by closing the loophole in which high income earners are exempt from federal social security taxes on income over $126,000. Minnesota cannot change the federal social security law, but if the federal government is not going to collect this revenue from high income earners it is reasonable for the state to collect that revenue. High income earners would only be paying the same percentage of their income in social security taxes that every other Minnesota worker pays.

This Moving Out of Poverty legislation is bold. But it is not unreasonable, and its provisions have strong public support.

The $15/hour minimum wage, with this gradual phase-in, would simply align Minnesota with laws in several other states and cities. Broad public support for a higher minimum wage is evident—all of the proposed minimum wage increases on the ballot in 2014 and 2016 passed, even in conservative states such as Arkansas, South Dakota, and Nebraska.

Eighty years ago in the New Deal, America made a social contract with its people that included a minimum wage: Workers will receive a minimum wage. It won’t make you rich, but you will have enough to afford necessities for your family—food, housing, clothing, medical care.

We are far from fulfilling that social contract. The scope of Minnesota’s poverty problem remains large with one of every three children living in families struggling to make ends meet. One of every ten households has times where people go hungry because they have no money for food. There are working people who go “home” from their jobs to a homeless shelter at night because they cannot afford housing.

The minimum wage increase alone is not sufficient. Even at that level many workers will not be able to pay for basic needs, so the legislation would more than double Minnesota's Working Family Credit. This increase would provide a couple thousand dollars more to a single parent who earns only about $20,000 per year.

When parents are unable to work, Minnesotans have recognized the importance of providing financial support to help them survive. We know that children whose families cannot afford housing and food are robbed of their potential—we can measure how it inhibits their physical, mental, and emotional development.

Unfortunately, financial assistance payments in Minnesota have not increased since 1986. Inflation over those decades has taken its toll and those families are more stressed than ever. The proposed $300 per month increase would do much to stabilize the lives of these children.

Circumstances will always occur that bring people into poverty—if you lose your job, or your car breaks down, or you get hit with large medical bills, you may slip into poverty. When we talk about ending poverty, we cannot prevent people from falling into it, but we can help them move up and out of poverty quickly, so they are not trapped.

Ending poverty in Minnesota is an achievable goal if we have the political will to do so. This legislation would be a strong commitment towards fulfilling the goal of moving Minnesota out of poverty and helping all families thrive.

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Copyright � 1999-2017, John Marty