MINNEAPOLIS — Minneapolis and St. Paul, Minn., have driven the state's economy for at least a century. With the state capitol in St. Paul, the University of Minnesota's main campus in Minneapolis, and 19 different Fortune 500 companies headquartered here, it's not surprising that the metropolitan area is home to more than half of the state's residents and a growing number of jobs. The Twin Cities didn't escape the recession, but the region has emerged relatively unscathed. This past April, the unemployment rate in the Minneapolis-St. Paul-Bloomington region was just 4.1 percent, according to the Bureau of Labor Statistics.
But the Twin Cities face a number of challenges common to all metro areas. Minneapolis Mayor Betsy Hodges and St. Paul Mayor Chris Coleman say demographic change is one of them. By 2040, more than one in five metro-area residents will be over age 65, and 40 percent will be nonwhite, according to the region's planning agency. The region has to figure out how to narrow the gaps in educational attainment, income, and employment between white and minority residents in order to remain prosperous. It also has to figure out how to convince young people, big businesses, and start-ups that they have a bright future here.
In this series, National Journal will profile three tools local leaders are using to encourage economic growth: investing in transit, connecting university research to the marketplace, and developing effective job-training programs. I spoke with Mayor Hodges by phone to ask about the challenges Minneapolis is facing, and how she's working to address them. Edited excerpts follow. My interview with St. Paul Mayor Chris Coleman will run later this week.
What is the biggest challenge facing the Twin Cities in terms of economic growth and development?
The wide gaps we have in outcomes between white people and people of color. We have some of the biggest gaps in the country on pretty much any measure you care to name. And we know what the demographics look like — by 2040, the region will be majority minority. That will happen sooner in the city of Minneapolis. If we don't make sure that everybody is thriving, we are going to be hampering our growth potential, both in terms of workforce development and people's ability to participate in our economy.
What can a mayor do to address these gaps and inequality?
One way is simply how we put our city together. Are we creating opportunities where they're needed most? That includes transit, particularly light rail and street cars. Investors are more confident investing around rails than they are investing around bus tires; they know those rails will be there in a generation. And with transit, you bring people to jobs and jobs to people. You can put them in the neighborhoods that need them the most, and that can spur an upward cycle of development.
Closing achievement gaps has proven to be a tough challenge across the country. What are you doing in the Twin Cities?
I just had the first meeting of our Cradle to K Cabinet. We're focusing on closing gaps from prenatal to 3-year-olds, because the first gap kids face is being born healthy, with the brain development they need. As a city, that is a place where we can directly have an impact. We're working to make sure that pregnant moms get the health care that they need and then sticking with those families for the first couple years of life. We also know that kids who are in stable housing do better than those who aren't, even if you control for their level of poverty. So it's vital to make sure that kids and families have stable housing.
There's a University of Minnesota professor named Aaron Sojourner who sits on the Cradle to K Cabinet. He published a study this spring that showed when you have strong supports and interventions for kids 3 and younger, the results of that persist into high school and beyond, even if there's no subsequent intervention. It's a big deal. It shows that this early, early period can have a transformative impact on the trajectory of a kid's educational life.
How do you make sure there are affordable housing options for everyone in the community?
I am one of the cochairs of Heading Home Hennepin, our 10-year plan to end homelessness. A big component of that is investment in affordable housing. We've done a really good job with single adults, but now it's seniors and it's families that we're really having to focus attention on. From a design perspective in terms of how you build a city, that's where transit comes in. If somebody can live in the city without a car, you're a step ahead of the game. I am working with my team to figure out the best way to spur affordable housing along those transit corridors.
How has the population of Minneapolis changed in the past few decades?
We're actually growing — but the biggest change is in our racial and ethnic diversity. The older people in the community are white, and the younger people are people of color with expanding families. The city is 60 percent white and 40 percent people of color. But in the public schools, it's 70 percent kids of color and 30 percent white kids. That makes our achievement gap a critical challenge. We have one of the biggest achievement gaps in the country — a 25 percent graduation rate for Native Americans, a 37 percent graduation rate for African-American and Latino students.
Is there any way to turn those graduation rates around?
There's an organization called Generation Next, which both Mayor Coleman and I sit on — former Mayor [R.T.] Ryback is the executive director. It's designed to close the achievement gaps using an evidence-based methodology and working from best practices. That's why I have my Cradle to K initiative. It's not that I want to let this current generation of children go. But I also know that this earliest intervention can have long-term effects that are only to the good.
One of the cases that I am making here and around the country is for inclusive growth. If we make sure that everybody can benefit from and participate in the growth that is happening, then everybody does better. The [International Monetary Fund] did a study that showed countries that had a 10 percent decrease in inequality had a 50 percent increase in the length of their growth spurt. Reducing inequality is in everybody's interest. The things we can do to make sure that everybody can participate fully include education but also a comprehensive review of all the regulations around small and medium-sized businesses in this city and our small business and entrepreneurial support program. We need to be able to foster growth in every community and for every person.
This is the first time I've written about a region that really has two equally strong cities in the same metro area. They used to have a competitive relationship, but it looks like the two cities are more cooperative than competitive now.
There is that history — or that perception — of competition. I know that it is in the interest of Minneapolis for St. Paul to succeed and for the region to succeed. I cheer when St. Paul does well. Mayor Coleman and I have been friends for many years, and it's been a delight to work with him on this light rail [linking Minneapolis and St. Paul]. I'm pretty excited about it. And I have to say, it's nice to have a mayor nearby who's experienced in the job. I can call him and he totally gets it.