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Is Duluth really a financial paradise?

Duluth is getting hailed as an economic Eden. So why are so many of its residents living in poverty?

Duluth is getting hailed as an economic Eden. So why are so many of its residents living in poverty? Tom Wallace, Star Tribune

A few days ago, Duluth started showing up in the headlines with a new feather in its cap. A survey by job search engine Indeed.com named the Minnesota port city as good as it gets if you want to get the most out of your money.

Indeed Hiring Lab explained its methodology. If you’re looking for cities where you earn the most, you’re looking at the Bay Area or Boston. But it also costs and arm and a leg to live there. If you adjust salaries to account for the cost of living, you’re probably looking at Cincinnati or Memphis.

But say you want a city where your dollar stretches and you have good job prospects. Once it factored in projected job growth and unemployment rate, the survey had a short list of financial triple-threats. And sitting cozy on that list, next to places like Wilmington, North Carolina and Lubbock, Texas, is good old Duluth.

“The rest of the country is catching on to what we’ve always known,” Duluth Mayor Emily Larson bragged. “Duluth is special.”

It's been especially special lately. Last October, the city’s unemployment rate sank to 2.5 percent, which happens to be the lowest jobless rate the state’s Department of Employment and Economic Development had on record since 1990. It's currently sitting at a solid 3.9 percent, per the latest Bureau of Labor Statistics.

In the fall of 2017, in St. Louis, Carlton, and Douglas counties, there were about two job vacancies for every unemployed resident. By May, the region’s manufacturing sector had grown by nearly 3 percent, retail was up 2 percent, and state government jobs shot up 7 percent.

Director of Business and Economic Development Heather Rand says Duluth probably owes Indeed's recognition to its diverse economy. Between tourism, advanced manufacturing, and higher education, there's a variety of options for job seekers. It’s also a major hub in the northeast corner of the state, which adds a few benefits to living there -- like the hulking Lake Superior sitting right on its banks.

“I think people would be surprised to hear we have a larger transportation network than most cities in the Midwest,” she says.

That all may be true, but there’s one thing Duluth has plenty of that the survey didn’t include: poverty.

This summer, Community Action Duluth reported that 17 percent of city residents are living under the poverty line -- higher than the national rate of 13.5 percent, and much higher than statewide rate of 11.5 percent. That’s actually an improvement. In 2014, 22.7 percent of Duluthians lived in poverty.

To give you some idea of what that means: a family of three making $20,780 or less is considered to be living in poverty. The average household income in Duluth is $43,518 -- about $20,000 less than the rest of the state. Life below the poverty line falls disproportionately on black families (55 percent), indigenous families (69 percent), and single moms with children under 5 (80 percent).

“These two studies talk about the two sides of Duluth,” Community Action Duluth director Jess Longenecker says. One of his organization’s main efforts is to find residents jobs that pay a livable wage: $14 an hour. Those job offers aren’t difficult to find in Duluth, Longenecker says. The city’s mean hourly wage was a penny shy of $22. But they are difficult to win one if you’re not a skilled, educated worker.

“The downside of that is that a lot of young people with educations are moving in, and they’re taking those nice-starting salary jobs,” he says.

Rand’s aware of the city’s dissonant economic reality. Duluth is a great place to stretch your money, she says – “if indeed you get the opportunity to grow your career or start your own business.” That’s not everyone’s situation. As people down on their luck arrive in Duluth to take advantage of its hospital systems, nonprofits and faith-based communities, they often find there isn’t any work available for someone with their education and experience.

The city is working hard to tackle the poverty problem, she says. They just hired a new workforce development director to give residents job training and prepare them to take advantage of Duluth’s bountiful employment opportunities. Until then, for them, Duluth won't be the financial Eden it appears to be, at least on paper, for some.