Child Watch® Column: "Washington's Two Economies—A Growing Income Gap"

Release Date: May 9, 2008

Marian Wright Edelman

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.


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