Demographic trends reveal mixed portrait of Ninth District reservations

Was poverty reduction solely an urban phenomenon in the 1990s? Examining the poverty analysis literature might lead you to this conclusion, especially since scholars who examine the issue often focus on changes that occurred in metropolitan neighborhoods. However, changes in the incidence of poverty varied in other geographic areas. One way to examine trends in nonurban poverty is to look at the changes that took place over the decade in a rural part of the Ninth Federal Reserve District that is known for high poverty rates: Native American reservations.

This article examines several social and economic trends that have taken place on District reservations since 1990, with a focus on the change in poverty rates and incomes over the decade. At first glance, the significant changes that occurred during the decade suggest that reservations were generally better off in 2000 than they were 10 years earlier. While many of the changes were momentous, areas for concern remain—especially for the reservations' Native American populations.

Population trends

Broadly speaking, reservations are state- or federally recognized, geographically defined areas of varying size over which Native Americans have the primary governing authority. The Ninth Federal Reserve District, which encompasses Minnesota, Montana, the Dakotas, Upper Michigan and northwestern Wisconsin, has 45 reservations. Minnesota has the most, with 14, while Montana's 7 reservations have the highest total population, with 63,565 people in 2000 (see Table 1).

Overall, District reservation populations grew at a rate of 17.8 percent between 1990 and 2000. This rate was 4 percentage points higher than the rate for the rest of the nation (13.2 percent) and 5 points higher than the rate for Minnesota—the fastest growing of the District's six states. Many large Ninth District reservations posted moderate population gains, while smaller reservations (those with fewer than 1,000 residents) tended to grow at a much faster rate.

Population data categorized by race reveal that reservations are not just populated by Native Americans. 1/ While numbers vary across reservations, Native Americans accounted for approximately 60 percent of District reservation populations in 1990 and 2000. Whites were the second-largest racial group on reservations, accounting for 41 percent of the population in 1990 and 34 percent in 2000. Over the intervening decade, however, the growth in the Native American population accounted for 72 percent of the approximately 30,000 people added to the total District reservation population. Whether this increase was due to natural population growth or Native Americans returning to reservations remains unclear.

Income and poverty

Overall, the decade saw an economywide boom that was generally accompanied by improved income and poverty trends for most reservations. However, Ninth District reservations did not benefit equally from the boom and most still lagged significantly behind their respective states on several important income and poverty indicators.

Incomes increase.For most reservations, median household income increased at a much higher rate than it did in their respective states. After adjusting for the change in price levels over the decade, the increase in household income on northern Wisconsin's Bad River Reservation was almost three and a half times that of the state of Wisconsin (57 percent and 16.8 percent, respectively). Some of the substantial increases in median household income may be partially attributed to revenue from reservations' casino operations. 2/

For example, the Flandreau Reservation near Sioux Falls, South Dakota, had a high level of casino revenue and an adjusted increase in median household income of close to 40 percent over the decade. Still, for almost one out of every five reservations in the Ninth District, the rate of increase in median household income was lower than the rate of increase of the state median, and in 90 percent of District reservations, median household incomes remained below their respective states' figures.

Poverty drops.Did the economic boom on District reservations lift residents out of poverty during the 1990s? Census data reveal that poverty rates decreased between 1990 and 2000 for almost every reservation (see Table 1). Overall, the poverty rate for the District's reservations dropped by 7.5 percent over the decade, with Wisconsin reservations, on average, showing the largest decline in poverty: a 22.5 percentage-point decrease. South Dakota reservations, on average, had the lowest decrease: 4.2 percentage points. The number of high-poverty reservations (those with a poverty rate above 40 percent) also declined, from 23 in 1990 to 9 in 2000.

More modest declines in the poverty rate were the rule for District reservations, especially for those with the largest populations. For example, the rate of poverty of the largest reservation in the District, the Flathead Reservation in Montana, decreased by 2.6 percentage points between 1990 and 2000. Two notable exceptions to this trend of decreasing rates included the Fort Peck (Montana) and Crow Creek (South Dakota) reservations, where the poverty rate increased by 3.8 and 6.9 percentage points, respectively. Even with dramatic proportional declines over the decade, District reservations had poverty rates in 1990 and 2000 that were considerably higher than the rates in their respective states (see the graph below).

For the Native American population on Ninth District reservations (61.3 percent of the total reservation population in 2000), poverty rates decreased by 12.2 percentage points over the decade. Poverty proved to be more widespread for Native Americans on reservations (see Table 2). For example, 42 percent of District Native Americans living on reservations were in poverty in 2000, compared to 32 percent of all reservation residents. Even though Native Americans were 60 percent of the total reservation population, they made up a larger share of the population in poverty for both decades (80 percent), further suggesting that poverty persists for this group even as household incomes increase.

A mixed portrait

In summary, despite the fact that a number of positive trends occurred during the 1990s, census data reveal a mixed economic portrait of Ninth District reservations. Reservation incomes increased and poverty declined. However, a sizable gap still exists between reservations and their respective states on these baseline poverty and income measures. The data also show that reservations did not benefit equally from the economic boom of the 1990s. Many small reservations with vibrant casinos located near large urban areas, such as Wisconsin's St. Croix or Forest County Potawatomi reservations, did very well. On larger reservations in the rural west of the District, such as Montana's Fort Peck Reservation, most indicators declined slightly or remained unchanged.

1/ When considering census data on race, it is important to note that Census 2000 significantly revised the questions used to identify race and ethnicity. In particular, questions related to Hispanic ethnicity were separated from race-related questions, and respondents could select more than one race category to describe themselves. Nationally, 98 percent of respondents chose only one category. For more on the changes to race and ethnicity in the 2000 census, see Elizabeth Grieco and Rachel Cassidy, Overview of Race and Hispanic Origin, Census 2000 Brief, U.S. Census Bureau, March 2001.

2/ For an analysis of Ninth District casinos, see Douglas Clement, “Not a great bet,” fedgazette, Federal Reserve Bank of Minneapolis, March 2003.