How misreading Somali poverty led Minnesota into its largest welfare scandal

The billion-dollar pandemic-era social service billing fraud perpetuated mainly by Somali immigrants in Minneapolis is shocking in its scale. That Minnesota public officials would have turned a blind eye to one of the largest state welfare scandals in American history, for fear of being viewed as racist, should surprise no one.

For years, the state has wrongly convinced itself that its Black residents suffer from a deeply racist past.  Progressives made a key error, confusing the situation of new immigrants who happen to be Black Africans with those who are the descendants of American slaves. But they were sure they had to correct the past with dramatic policy changes.

This under-appreciated story began with what seemed to be an alarming 2019 investigation by the Minneapolis Star-Tribune that labeled Minnesota “one of the most racially inequitable states” — a conclusion based on a poverty rate four times higher for Blacks than Whites. But this is the same state that had extended a warm welcome, through Lutheran and Catholic social service groups, to refugees fleeing the Somalian civil war; by 2024 some 107,000 residents of Somali descent would reside in Minnesota. The state had effectively imported large-scale Black poverty — but this had everything to do with immigration and nothing to do with Jim Crow and its legacy.

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Neighborhood-level poverty data tells the story. In the North Minneapolis Hawthorne neighborhood, among the city’s poorest, 38% of residents are Black, and 21% are foreign-born. In the Cedar-Riverside neighborhood, 44.5% of residents are Black, and 42% of the population is foreign-born.

The newspaper, however, attributed the economic gap not to immigration but to “special benefits made available over time to the White population,” referring to “redlining”— federal mortgage guidelines that hampered blacks from buying homes, in Minneapolis and most other American cities— but long since abolished, long before the Somalis arrived.

But Minneapolis went into “how to be anti-racist” overdrive. Led by liberal Mayor Jacob Frey — who’d become notorious when he failed to crack down on the riots that followed the death of George Floyd— the city approved a law abolishing all single family zoning in Minneapolis.  He made clear that doing so was a form of reparations. Per Mayor Frey:  the city, he told Politico, was perpetuating “racist policies…implicitly through our zoning code.” Then-City Council President Lisa Bender piled on: “housing is inextricably linked with income, with all these other systems that are failing, especially in Minnesota, people of color.”

The anti-racist rhetoric overlooked the fact that there were long racially-integrated neighborhoods in a city and state that historically had a relatively small Black population — just 4.4% in 1970 — before rising to more than 18% today, thanks to Somali immigration.

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As I analyzed for City Journal— which in October broke the story about fraud money potentially supporting a terrorist front group — in one of the city’s most affluent areas, a respectable 4.3% of its households are African-American, compared with 7.4%  for the metropolitan area as a whole. The city’s Victory neighborhood is 18.3% African-American, and 40% of its population is in the highest-income category. It is both well-off and racially integrated. Minneapolis had no reason for white guilt.

But the Star-Tribune story landed at the beginning of the “how to be an anti-racist era”— and Minneapolis was on board, confusing immigrant poverty with racism.

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So it was that when one policeman tragically overreacted in arresting George Floyd, the city—and the country—concluded that policing, like zoning, is irredeemably racist. It was the same anti-zoning Mayor Frey who acquiesced when rioters set fire to the city’s Third Precinct police station following Floyd’s death—which led the city to dial back policing in favor social services.  (New Yorkers may see the same playbook from mayor-elect Zohran Mamdani.)

In light of the supposed racist backdrop to Somali poverty, state officials were hardly going to stanch the flow of federal dollars to faux food banks and autism treatment centers.  It’s possible that Gov. Tim Walz saw an infusion of federal dollars as good news — a way to help address that supposedly systemic black-white wealth gap. The right approach, of course, involves what was once called assimilation: making sure Somalis learn English and gain the skills necessary for upward mobility.  Not exactly the agenda of the most prominent Somali-American, Rep. Ilhan Omar, herself a one-time refugee who is quick to denounce “systemic racism.”

It is hard to understand the hyper-racial sensitivity of Minnesota progressives.  Minneapolis elected Sharon Sayles Benton, its first Black female mayor, in 1994; NFL great Alan Page became a state Supreme Court judge. And, of course, there’s the Minneapolis-bred musical genius of Prince.

The state had no reason to conclude cracking down on welfare fraud among new immigrants from a nation beset by corrupt government was racist. But, in the wake of long-building but misplaced white guilt, that’s what it did.

Taxpayers have lost not only financially. Residents of a famously well-governed state will lose their trust in government.

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