Washington's Two Economies -- A Growing Income Gap

Washington, D.C., the nation's capital, is one of the great cities of the world. Tourists come here from around the globe to enjoy its world-class museums and art galleries and visit its columned edifices of gleaming marble. It's a city that attracts some of the most talented people from America and abroad. Well-educated, highly paid professionals who work for federal agencies, in the halls of Congress and at media organizations make their homes on the banks of the Potomac.

But many long-time local residents use Washington's other name -- the District of Columbia. While the District's streets course through middle-income communities with neat row houses fronting well-kept lawns, its overall poverty rate has reached its highest level in nearly ten years. Sadly, the socioeconomic divide between Washington and the District of Columbia has been widening over the past two decades.

According to the D.C. Fiscal Policy Institute's October 2007 report, "D.C.'s Two Economies: Many Residents Are Falling Behind Despite the City's Revitalization," the wage gap between D.C.'s highest earners (the top 20 percent) and the lowest (the bottom 20 percent) is the widest it has been since 1979. And the number of impoverished District residents has grown. According to the Institute report, nearly 20 percent, or one in five District residents, have incomes below the poverty level. Since the late 1990s, about 27,000 D.C. residents have fallen into poverty.

Despite the recent economic downturn, Washington's strong economy has been anchored by large employers such as the federal government, the District government, universities, hospitals and corporate offices. The city also has experienced a boom in commercial and residential construction. Long seen as "recession proof," the Washington economy is strong. The economy has produced jobs for skilled and well-educated workers who have seen their incomes soar. While a large segment of the Washington population is economically successful, that prosperity has not been shared by a considerable segment of the District's black population and the least educated residents who have remained sunken at the bottom.

According to the Institute report, the median income for White households in Washington grew from $55,000 in 1980 to $92,000 in 2006 (in 2006 dollars). The incomes of the least paid workers (when adjusted for inflation) have stayed practically unchanged over the last three decades. The incomes of black households from 1980 to 2006 have remained essentially flat at $34,500. In addition, employment for black adults has declined steadily since the late 1980s, from 62 percent in 1988 to 51 percent in 2006. Only two other U.S. cities, Tampa and Atlanta, have worse income disparities. One's level of education can be critical for economic success. Just 51 percent of D.C. residents with only a high school diploma had jobs; this is the lowest level in nearly 30 years.

One-third of the District's children are poor, compared with 16 percent of adults ages 18 to 64. In 2004, approximately 22,000 District families with children had incomes below 200 percent of the federal poverty line, or less than about $31,000 for a family of three. Seventy-four percent of these were working families with one or more parents who worked at least part of the year. About 12,000 of these low-income District families with children -- more than half -- included adults who worked more than half of the year. In many cases, the parents worked full-time and year-round. Overall, some 47,000 District residents, including 27,000 children, lived in families that were poor or near-poor despite working most of the year.

This problem must be addressed at its roots. The first thing that must be done is to improve the quality of education at all levels -- preschool, elementary, secondary and postsecondary -- as well as provide job training programs that will equip District residents with the skills that will enable them to participate and succeed in the city's economy. Residents who are stuck in low-wage jobs and striving to stay off public assistance rolls need support. We must provide that support by establishing decent living wages, child care assistance, health care coverage and affordable housing.

Comments

[DHFabian]

Regarding the War on Poverty: It was probably the most successful set of policies in modern US history. Before "reform", 80% of AFDC recipients voluntarily quit welfare within 5 years because they were able to move forward with their lives. Families were able to get by during a time of illness, etc.
(today, people are simply dumped after a period of time). Families maintained a level of security while preparing for employment via education and skills training programs. Welfare aid ensured the health and safety of their children, enabling them to be successful students. To sum it up, the most recipients used aid for a short time, became self-supporting taxpayers, and the aid they received via their own tax payments.

Many lives were saved by the War on Poverty. Poverty rates plunged, employment increased, productivity increased, crime fell, and low-income children succeeded in school.

Consider that all of these things resulted from a single program, AFDC. Did ADFC "break the budget",
and "bring taxpayers to the knees"? Nope. It used a mere 6% of the budget.

Since Clinton welfare "reforms": increased infant mortality, falling life-expectancy among the poor; millions of people poured into a shrinking job market, and a tangle of related policies that wiped out unions, workers' rights and protections, and powerfully suppressed the wages. And of course we are paying for significant increases in imprisonment: yes, desperate people take desperate measures.

[ofbbg]

If I'm not mistaken, LBJ declared a "War on poverty" back in the early days of his presidency. How's that war been going? Seems to me that we've spent hundreds of billions of hard-earned tax dollars on it with virtually no progress. Same with education - we've thrown tens of billions at public education, with more demanded every year, yet the end product continues to decline in quality every year - and teachers have to personally buy school supplies. Detroit stands as a shining example of the failure of the public education system. It's the second most expensive school system in the nation, yet only 25% of high school freshmen graduate. I knew more when I graduated high school in 1963 than the average college grad today. Same with job training programs -how many different ones have governments extravagently funded - yet we have to import skilled and semi-skilled workers from around the world. One might easily (and I think correctly) come to the conclusion that throwing more and more money at these problems is not a workable solution - especially if government is doing the throwing. The Republicans may have been right - more and more government is NOT the answer. Would youy pay the same exterminator more and more for each failed attempt to eliminate you critter problem? Or your mechanic for repeatedly not repairing your car over and over again? Of course not. You'd take you business elsewhere. Maybe the nation as a whole should do the

[DHFabian]

To ofbbg: Americans in general seem to have an idea that there is one group of people who made up the welfare roles. For the overwhelming majority, welfare was a very temporary situation, enabling them to move forward. As people quit, others applied, then later quit, and so on. There were few "lifers", and those were high-needs people (i.e., the disabled who were able to undergo the daunting social security disability application process, the illiterate, etc.). The welfare rolls were in a constant state of change, increasing during economic downturns, shrinking when the economy improved.
Unfortunately, the conditions that cause US poverty have dramatically worsened; deregulation, outsourcing jobs at taxpayer expense, loss of education and skills training programs, unaffordable higher education, etc., etc.

[egal]

The schools haven't BEEN getting more and more from the government, not anywhere near even with inflation and increasingly expensiv needs, as a quick check into our school systems would tell you. Unless you think more "meet this quota or else", with standards no poor school could ever attain without first getting improved funding and teachers and equipment and free funds is what the government should be doing in order to help schools.

The Republicans are the ones who have pushed government-driven school down our throats while at the same time reducing funding to the neediest schools. What the schools with the most deficits and worst quality have been gettting is more and more testing, standards no poor school can attain but which they have to in order to get more funding, and an incompetent president who listens to the most widely discredited education personnel in his plans.

Maybe if the government had actually gotten involved productively and sent the money where it was needed in a manner not privy to theft and abuse by numerous parties, we would have a valid answer to the question of how effective government intervention is in education. Right now, we don't, because corruption and inefficiency and fund diversion and asinine demands have derailed all efforts to have the government usefully involved in education.

[Researchguy66]

The quality of any education starts with the parents...it doesn'tmatter how much money you throw at a system where no one cares about the value of the 13 years of free education they receive.

[jhNY]

I moved to DC right after college, and stayed about 5 years, about 30 years ago. At the time I was a resident, the tension between the whites and Blacks was palpable and pervasive. I thought at the time that somehow, even though I had lived in the South all my life before college, I had managed to move to a more racially charged place than any I had lived in previously.

My thesis then was that, Black people, from rural Georgia and the Carolinas mostly, imagined they had moved up to the racially tolerant North, while Eastern and mid-Western whites imagined they had moved to a city of the Old South, and each group acted accordingly, to the bitter disappointment of everybody.

At the time, it was possible from many angles for photographers to make editorial commentary out of the local landscape, just by taking a picture from several available angles in which the Capitol dome would take up the distant center of the frame while the foreground was entirely filled by slum dwellings occupied by poor Blacks. Sorry to hear so little has changed.

I hope there is a concerted, honest effort exerted by the politically powerful there, both residents and those who live there part-time for business purposes, to turn things around, especially in the fileds of education, housing and opportunity. But our nation's capital has long been the location of glaring inequalities, bemoaned by some but tolerated by many more.