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Chapter 8

Income, Wealth, and Quality of Life

    Auto-era changes created an Upper Midwest that was not only physically transformed but also more prosperous. In the 1920s, the region, compared with the national average, had less than three-fourths the per capita income, less than one-eighth the per capita value of physical improvements, and only about half the per capita monetary savings. By 1980, per capita income and monetary savings were virtually equal to the national average, and per capita value of physical improvements exceeded the national level. An underbuilt, capital-poor, developing region had become a well-built, prosperous, middle class neighborhood of America.¹¹⁵

    Income and wealth had not grown equally everywhere. On the eve of the 1980s, the income map showed notable contrasts within the region (Figure 81). One set of income differences mirrored the urban trade and service hierarchy. The Twin Cities area, together with the medical and computer center at Rochester, not only led the region but also ranked among the highest-income metropolitan areas in the United States. Average income was progressively less down the urban size order to the small towns, hamlets, and rural areas.

    High average income in urban areas reflected their centrality in the circulation system. They were the busiest centers of exchange and the largest concentrations of professions, management, and innovation. Average income was also less on the least productive farmland. In the marginal farming areas and the Indian reservations, 50 of the region's 342 counties ranked among the poorest one-third of all counties in the country. The Upper Midwest is one of the more egalitarian parts of the United States; nevertheless, communities of fine homes and luxury apartments contrasted with communities of sagging frame houses, used trailers, and remodeled boxcars. Where job opportunity, wages, and investment were low, so were the local tax bases and government revenues.

    The geographically uneven income distribution led to transfers from wealthier communities to poorer. Transfers through the public economy took the form of higher state aids in the poorer counties, or higher local property taxes in upper income neighborhoods to help pay for improvements in poorer neighborhoods. In the private economy, income transfers took the form of philanthropy and were encouraged by tax concessions. The transfers were an attempt to meet minimum needs; they equaled only a small fraction of the income differentials between either individual families or county averages. Nevertheless, the system of income transfers reflected the combination of drive for efficiency and sense of community that has appeared at many points in the story of the region's development.¹¹⁶

    The difference between the lower and higher income counties was reduced from the time of the earliest census of income in 1950 to the most recent in 1980 (Figure 82). That reduction was partly the result of a relative decline in the Twin Cities Central Counties with the growing concentration of low-income population in the inner areas of St. Paul and Minneapolis. But it was mainly the result of strong income growth in the cities in the wholesale-retail and shopping center classes, in the recreational lake districts, and in the major areas of commercial farming. Economic growth outside the metropolitan core was stimulated by several decentralizing factors: highway transportation and telecommunication; growth of government employment; and increased transfer payments through state aids, private and public pensions, and welfare. Rural economic growth also reflected the higher income per farm that accompanied the increase in farm size and productivity. While decentralized growth was facilitated by technological changes, it was also attracted by relatively underemployed rural labor, lower wages, and lower taxes. The effects of transfer payments were most obvious on the map and of greatest relative importance in the counties with large rural Indian populations. A century after the conquest, average Indians remained impoverished and segregated.

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Figure 81. Median Family Income by County, 1979. Source: note 115.

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Figure 82. Growth in Family Income, 1949-1979. Source: note 115. (Percentages were calculated using constant 1979 dollars.)

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    The pattern of income change in the Great Plains highlights the climatic risk to farming in that part of the region. There was a mixture of very high and very low income gains among randomly distributed groups of farm counties. Nineteen seventy-nine was a bad crop year in parts of South Dakota and in some areas along the High Line, but a good year in other parts of North Dakota. The result was an erratic pattern of farm income change in 1979 compared with 1949.

    Whether net income grew or not, there was a very large increase in the amount of money flowing through the major farming areas. Recall the threefold increase in value of farm products that were sold per square mile in the major farming areas, in constant dollars, between the 1920s and the 1970s. The growth was also evident from the geography of bank accounts. Of 169 counties with per capita bank deposits above the regional median, all but nine were in the cropland corridor from southeastern Minnesota to northern Montana. Fifty-eight of those counties were well below the regional median family income. The anomaly of big bank accounts and low income probably reflected in part the different definitions and assumptions in reporting farm personal income, compared with urban income, to the Census Bureau. But the major fact was that the farmers were running a very large, highly capitalized enterprise on very narrow and variable margins.

    As a result of post-World War II changes in the income pattern, the differences between the larger and smaller cities were narrowed, but the differences between many smaller cities and their rural hinterlands were sharpened. Thus there was less apparent need for income transfers between urban areas. At the same time there was a larger, more dispersed urban base for income transfers to the residual low-income rural areas. That change was well illustrated by a 1983 South Dakota advertisement for industrial development. It devoted full pages to the industrial gains and opportunities in Sioux Falls, Rapid City, Aberdeen, and Huron while it also pointed out that the state government had doubled aids to local schools and vocational training centers in the preceding four years. South Dakota took pride in holding down state expenditures. But as the state's urban income base grew, state aids could also grow —and the need was there.

    Several measures of assets suggested the magnitude of savings and capital accumulation in the region by the early 1980s. Bank and savings-and-loan deposits had reached $60 billion in 1981, and bank assets were in the neighborhood of $80 bilion—3.1 percent of the country's total. Two hundred corporations, including 11 cooperatives, with annual sales greater than $25 million, had combined assets of about $200 billion. That was 3 percent of the assets of all United States corporations in that size class. Because of the concentration of finance and corporate headquarters in New York, the rest of the country's share of banking and corporate assets has always been less than its share of population. But the primary region centered on the Twin Cities was one of the few such regions in the country where the reverse was true: the share of major business assets surpassed the share of population.

    Within the region, bank and savings-and-loan deposits were spread rather evenly. The share of deposits was at most only one or two percentage points above or below the share of population in the wholesale-retail centers, shopping centers, and rural areas alike. Even the Twin Cities share of deposits exceeded their share of population by less than four percentage points. But the concentration of bank assets at the Twin Cities was substantially larger than the share of deposits. Assets were enlarged by a central pool that the major Minneapolis and St. Paul banks provided for management of short-term surplus funds from many smaller institutions throughout the region. In total the region's wealth was surprisingly large, and it was relatively dispersed throughout both the population and the area. The pattern reflected long-standing traditions of a high savings rate, decentralized control, and regional cooperation. All three traditions reflected a distinctive historical mixture of creative tensions and practical necessities.

    Of course, there is an ultimate, practical question about the growth of income and wealth: Did it enhance the quality of living? After a century of earning, saving, building, and rebuilding, what kind of a place to live had people created in the Upper Midwest?

    In the early 1980s, Places Rated Almanac was the most widely read, general compilation that attempted to "rank places according to the factors that most affect quality of life." That image-making reference book ranked 277 metropolitan areas in the United States. Thirty of the 277 areas make up all or most of each of the nation's thirty high order metropolitan areas. Population of each of those 30 areas was over one million. Ten of the 277 areas were specialized suburbs of the "big thirty" and could therefore not be compared with others in their size classes. One hundred twenty-nine ranked were outside the 30 high order urban areas, under one million population, but with at least 250,000 population. The remaining 108 were small metropolitan areas, with populations less than 250,000. Ten Upper Midwest urban areas were included in the small metropolitan class, and the Twin Cities were in the high-order group.¹¹⁷

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    Using the almanac's rating system, we find that the "best" places had modest housing costs, low heating and air-conditioning costs, abundant health care, little violent crime, easy internal circulation, frequent regional and national air connections, abundant school capacity with ample staff and equipment, abundant and varied recreational facilities, abundant and well-patronized libraries and arts, professional sports, ample available jobs, good pay, low taxes, and mild climate. Those broad classes of descriptive attributes certainly were relevant in the 1980s. Curbstone observation of American behavior left little or no doubt that they reflected modal standards and aspirations. They also described very well the most likely residential environment of the modal household on the American socio-economic scale at that time: the middle-income suburbs of a metropolitan area.

    According to those criteria, the Twin Cities ranked fifteenth among the 30 high-order metropolitan areas. Among the smaller centers, six of the 10 Upper Midwest cities ranked in the top one-quarter, and all except Great Falls ranked above the median.

    But those ratings included the climate factor. It was surprising to see any Upper Midwest places—with the country's most intemperate climate-ranked above the cellar. If the climate factor had been neutralized, the remaining score would have depended on what a community had built, the services it provided, how effectively its people had adapted to economic change, and how well it managed its public affairs.

    With only those community factors con^ sidered —climate neutral —the Twin Cities ranked second after Dallas-Fort Worth, not only among the high-order centers but also among all the metropolitan areas in the United States. Among the 108 small metropolitan areas under 250,000 population, Duluth-Superior ranked first, LaCrosse second. The addition of Sioux Falls, Rochester, St. Cloud, and Fargo-Moorhead put six of the nation's nine highest-rated places in the Upper Midwest. Billings, Grand Forks, and Eau Claire-Chippewa Falls brought the Upper Midwest total to nine of the top 27. Nine-tenths of the region's small metropolitan areas ranked in the top one-quarter in their size class nationwide. All 10 were above the national median. While other studies and surveys had also placed the Twin Cities at or near the top among the nation's large centers, smaller Upper Midwest cities had not been included in earlier national comparisons.

    On the face of it, the ratings seemed to indicate that the growth of income and wealth had indeed enhanced the Upper Midwest quality of life and did so at a rate well above the national average. To be sure, the precise numbers and ranks were probably impossible to defend rigorously and hardly worth debating. They would no doubt fluctuate within a fairly wide range in future editions of the almanac. Yet the notion that these cities are very desirable living places with an extreme climate probably matched very closely the feelings of virtually everyone who had ever put down roots in the region. The ratings would have projected the same image to any stranger who took the trouble to separate the climate factor from the others. So perhaps the ratings were reasonable, by the standards of social evaluation and artistic criticism.

    But the ratings do not reveal what the people in these places had to do to make them rank high as communities in which to live. Clearly one necessity was to reconcile conflicting criteria for desirability. The most notable conflict matched the criteria of high-quality health care, education, recreational facilities, and streets and utilities against low taxes. The optimal solution surely depended on a continuing search for efficiency, innovation, good government, and a spirit of community. People in these Upper Midwest communities also had to reconcile some criteria for quality with a disadvantageous location. For example, jobs at competitive wages and salaries had to be reconciled with a location distant from the center of gravity of the national markets. That reconciliation depended on innovation, entrepreneurship, organization, and management. National air connections that were frequent and direct had to be provided for a region with a comparatively small, thinly spread population and a remote location. The solution depended not only on entrepreneurship in the transportation business but also on concentration and focus of the regional market at a relatively small hierarchy of major centers. Those conditions necessary for a high rating appeared often in the story of the auto-era transformation of the Upper Midwest: innovation, entrepreneurship, management, good government, urban hierarchy.

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    In order to rate highly, a place clearly had to have a high proportion of the physical and socio-economic characteristics of a middle-class or upper middle-class suburb. In terms of some important descriptive statistics, the region's cities have had certain suburban socio-economic characteristics almost from the start. That seems strange at first, because commercial farming had been and still was in the 1980s a larger part of the economic base here than in other regions, and because few places are far from the countryside. Because so much of the basic industrial economy has always been on farms and in small towns, the cities have had exceptionally high concentrations of the region's white-collar population: merchants, professionals, clerical workers. Functional classifications of the nation's cities showed almost every one in the Upper Midwest specialized in services rather than manufacturing. Travelogues characterized the places as "clean." Among the million-size metropolitan areas in the almanac's rating, the Twin Cities have embodied the same characteristics as the smaller cities. The region's agriculture has always accounted for an exceptionally high proportion of the Twin Cities economic base. The metropolis has been the culminating concentration of offices, professionals, and business services in the region. It has been more a service center than an industrial center. Even the Minneapolis-St. Paul manufacturing growth in the auto era strongly reflected the service and professional base.

    A very large heavy industrial economic base of Upper Midwest cities has been in the fields and farmyards. Production lines have been the furrows, feeding troughs, milking parlors, silos, pens, elevators, country roads.-The blue collar parishes, clubs, bars, and halls —so popular among students of city industrial neighborhoods —have been at the small towns and country crossroads. The vast rural part of what had become truly an urban system could not appear fully in the city statistics used in ratings. The smells, sweat, sprawling storage and assembly yards, the capital-intensive plants with declining labor requirements-features that added to the size, but not to the ratings, of many industrial cities —have been mostly between these Upper Midwest cities, not within them. To a significant degree; the cities rated were, like some large suburbs, a selected statistical section of their larger working communities. But there the similarity to suburbs ended abruptly.

    On closer inspection, a great many of the production workers turned out to be business men and women. Farm households commonly managed a half-million-dollar or larger physical plant and inventory. For about half of them, animals made up a major part of the production equipment. Each creature had its own idiosyncrasies and had to be treated with care or lost to the productive enterprise. Thousands of independent, small-town shopkeepers were skilled at custom welding, custom shaping and machining of metal, improvising replacement parts, and adapting mass-produced machines to unique soil and drainage problems. Thousands of independent truckers and small transportation firms knew the territory and knew how to keep track of what needed to be moved, where, when, and why. The roster went on and on.

    The cities were selected parts of an interactive network that tied the countryside to the world's cultures and commerce. Despite apparent isolation and small size, the cities afforded a pragmatic, rather distinctly sophisticated view of the world. Farm trade centers had elements of suburban life style. Farmers were urban. They were heavy industrial laborers but also owners, managers, and entrepreneurs. The biggest banks and trading firms were as rural as they were metropolitan, yet also national and international. The risks of climate and world markets were everyday experiences. Many medium-size as well as large industrial and service firms were national and international; as were the church denominations. The industries depended on innovation and efficiency. The churches were committed to tradition and humanitarianism. Many of the same local people were involved in both, worldwide. Ninety percent of the highway mileage was subsidized by the other 10 percent; and the economy could not function without the entire system. The whole regional structure had been built from wilderness within four generations. In such a community it was unusually difficult to dispute rapid change or deny the importance of humanitarianism, entrepreneurship, subsidies, tradition, the inevitability of risk, or the drive for security. Under those circumstances, tolerance, truth, and, above all, pragmatism had an above-average chance to prosper. The community ratings in a way reflected the role of both the rated places and the others in this regional environment. But the numerical rating criteria could not catch the spirit or the history.

    Now consider the additional role of climate in the regional culture. No matter how highly those places rated on the community scale in the early 1980s, people still had to deal with the climate. Coping with the climate added to the unusual character of the places, though surely not to their ratings — at least not directly.

    Many steps were taken to neutralize the temperature extremes. Shelter for every purpose was designed, built, or upgraded for efficient heating —not only homes and commercial buildings but also specialized structures including the Twin Cities skyways and domed stadium. Winter clothing was designed for light weight, convenience, and warmth. Transportation equipment was maintained and routes were designed for operation in severe low temperatures, wind, ice, and snow. Indoor social, recreational, and cultural winter activities were rich and varied. The ratings in recreation and arts partly reflected that effort. Midsummer hot spells were partly neutralized by the way in which buildings were designed for winter. Ample insulation not only reduced winter heat loss; but also made summer air-conditioning cheaper and more efficient. At the same time, nature provided most of the antidote for summer heat-frequent mild, dry, breezy, sunny days and several thousand large recreational lakes.

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    For those who spent virtually all their time in intellectual activity, conditions were ideal for simply ignoring the temperature extremes. To be able to concentrate, those people needed to be warm but not hot, cool but not cold. They could remain indoors any time of year and enjoy those conditions. And since heating is more efficient than air conditioning, they could enjoy optimal indoor climates in the Upper Midwest more cheaply than they could in the warmest parts of the Sun Belt.

    Rather than neutralize the extreme climate-or ignore it-many people used it and enjoyed it. With an ample supply of ice and snow certain for several months of every year, they could justify investing in specialized equipment with full knowledge that they would use it. Vilhjalmur Stefansson, the famous Arctic explorer and author who was reared on the Dakota pioneer fringe in the 1880s and 1890s, wrote many years later, "With Southerners it is a miracle to walk on water. To Northerners the most commonplace use of water is to walk on it."¹¹⁸  Thus ice-fishing houses, skates, hockey equipment, skis, snowshoes, snowmobiles, snow tires, four-wheel drives, lightweight warm-up suits, parkas, thermal underwear, moon boots, mittens, and earmuffs were commonplace. They were as necessary as the bats, balls, golf clubs, outboard motors, tennis rackets, three-wheelers, 10-speeds, fishing rods, and snorkeling equipment with which they shared vast amounts of household storage space.

    But the winter gear was more than a set of exercising tools. It offered more than a chance to test survival skills, grist for conversation over hot coffee, or even the means to get from one warm spa to another-although those were important. It opened the unique natural environment of northern winter. People could experience the thrill of seeing the remarkable amount of life and activity in nature in the "dead" of winter-the fish beneath the ice, the green watercress in an icy spring-fed creek between deep snowbanks, the great variety of tracks and burrows in the snow, the green grass and forbs beneath the snow's protective blanket, the variety of birds in the freezing air and the sheltering evergreens. The winter season began with the near certainty of a frosty Thanksgiving and a white Christmas, ended with the suddenness of the spring breakup. In three weeks, a trillion gallons of meltwater trickled through the leaves and needles on the floor of the North Woods, gathered in rocky streams, and poured into Lake Superior and the headwaters of the Mississippi and the Red. Thirty-foot drifts —packed and grotesque-began to soften, gush water from their undersides, pull away from Montana's mountain walls, and quickly fill the reservoirs in the headwaters of the Missouri. Muddy streams ripped the walls of the Badlands and the breaks of the Great Plains. Ridges of dark soils and stubble appeared above the melting snow in the grain fields; meltwater seeped into the ground to be stored and used by the crops of the coming summer.

    Winter activities were a part of intense year-round outdoor recreation. That feature of Upper Midwest living was reflected in the high rate of public expenditures for conservation and natural resources, the high ownership of recreational homes, and the high "recreation" scores on the metropolitan ratings.

    Those who neutralized, ignored, used, or enjoyed the climate were also those who accounted for the high Upper Midwest ratings on community factors. They provided the current of continuity in the turbulent demographic stream: built the communities, maintained them, and kept them anchored in their places on the land. Those people came from many backgrounds. Many were Upper Midwest natives—more than 70 percent in 1980. Many others immigrated to a place in the region, and their commitment and affection grew. Many eventually moved on, in the nation's mobile society. But for a time each adapted, adopted, and contributed. Community building and climatic adaptation characterized the region's distinctive quality of life, and it rated highly.

    Yet the region continued to be segregated in much of the national image by the perception of isolation and uninhabitable climate. Places Rated Almanac indirectly quoted the masses who pictured the "howling wilderness of the Northern Plains." Newcomers and visitors were sometimes baffled by the regional culture.

    In the early 1980s, a widely read business author prescribed a new form of social-political organization to cure some of the nation's ills. ¹¹⁹  The prescription was based on his experience in analysis of corporate management patterns. In fact, at least one of his business prototypes was the Upper Midwest's largest industrial corporation. He emphasized a combination of autonomy with interdependence, "loosely structured networks of interaction to facilitate familiarity and idea-sharing."Almost predictably, he came to the regional metropolis  of the Upper Midwest and discovered his prescribed form of organization in action in an entire community. People who collectively developed the region's circulation network and built a system of interacting settlements on the network appeared somehow to have invented an optimal system. It needed only to be identified by an outside observer as a generic type, and named.

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A group of graduate students from prestigious private business schools, working as summer interns at corporate offices in Minneapolis, summarized their impressions for a business magazine in 1983. One of them, who had been working previously in New York City, said, "The life style is about as different as I can imagine. . . . it provides the basis for a location decision." She and others were pondering the combined expressions all around them of a unique regional history and a unique location. They were in a metropolis in the countryside, yet they were working for local multinational corporations. Several were students at Harvard and Stanford, the most richly, privately endowed universities in the world. Yet here in the Upper Midwest, the local state university that year ranked third, after these two, in private support—highest in private support among American public institutions. Local symphony and chamber orchestras, choirs, and theaters had earned international acclaim. A doctor, a state legislator, and a parish priest led three of the remarkable array of old-time polka bands on the recording and regional ballroom circuit. Fine arts programs brought national recognition to small cities such as Devils Lake, North Dakota. Farm couples made annual theater trips to New York.¹²⁰

The interns were also near the northern frontier of world settlement. The great circle flight from London takes more than six daylight hours over the subpolar North Atlantic, the Greenland ice cap, the subarctic tundra, and the nearly empty boreal forest of eastern Canada and northeastern Minnesota before

the Twin Ports come suddenly into view —and the Twin Cities northern suburbs follow after only a few more minutes over forests, lakes, and scattered farms. In this region, the northern wilderness presses farthest south in North America. Aside from cold waves, nature provides other occasional headline-catching reminders. A wayward black bear once entered a downtown Duluth cocktail lounge. A six-point buck recently wandered into a suburban Twin Cities supermarket on a busy afternoon.

One of the interns said the Twin Cities seemed ideal for young marrieds but wondered "what it's like when you run out of things to do." People who know might say that you get involved in building and maintaining the community, experiment with the climate, and get acquainted with the neighbors and places. Go out to the Bear Paws, over to the Porcupines, up to the Rainy, down to the Skunk!