Print Columns   |   Web Chats   |   Blog Archives   |  

D.C. Inequalities, Or How the Middle Class Got Stuck

If you made $80,000 in the 80s, you probably make more than twice that today. But if you (or someone like you) made $32,000 two decades ago, your pay has probably gone up only to about $42,000. And if you were unfortunate enough to be on the lowest rung of the income ladder back in the 80s, you've probably made zero progress since then, with average incomes in that lowest fifth of families staying put at about $12,000.

That's the bottom line in the growing inequalities in the economy both across the U.S. and particularly in the District. A national study of income inequalities and a local analysis looking at the numbers in the District show that the poor stayed poor, the middle inched up, and the rich got stupendously richer.

This likely comes as a surprise to no one except the folks in the top fifth of the income scale, who regularly manage to seem themselves as financially beleaguered with only a vague tsk tsk in the general direction of those who must scramble ever harder to get by.

The big political question that such studies prompts is why the vast middle of the population doesn't seem terribly exercised by their persistent problem with falling further behind. The great American binding myth of mobility is generally just true enough to tamp down any notion of class divisions--even within the inequalities shown by the statistics, there's room for people to rise to a higher income bracket through education and initiative. But the numbers don't lie: Most people don't ever make that jump. The beauty of the American system is that vastly more people believe they can and will move on up than ever realistically will do so. And we tend to vote and speak as if we were guaranteed to be the ones who will claw our way up, and we therefore don't vote to soak the rich, because secretly we think we will one day be one of them.

The D.C.-specific numbers show, according to the Lazere analysis linked above, that the city's poor population has not really benefited from the District's economic transformation since the end of the Barry era. But here the numbers don't tell a full story. It's certainly true that large swaths of the city remain mired in poverty, unemployment and the traps of the permanent underclass. But over these past 20 years of gentrification, there's been a big change in the city's population, and a large piece of that change has been the economic uplifting of people who used to be part of that low-income population in the District.

Why doesn't that show up in the stats? Because the great majority of those who benefited from the city's rising tide left town. They moved out to Prince George's County and beyond, cashing in their D.C. homes to fulfill suburban dreams. That may have done little for the inequalities picture in the District, which remains very much a city of rich and poor with scarcely any middle, but it did an enormous amount for those who now boast of being homeowners with real capital out in the county. The old joke about Marion Barry having created Ward 9--the former D.C. residents who populate much of Prince George's--is even truer today than it was when he left office. Except a good chunk of that credit should go not to Barry, but to that much-reviled master of gentrification, Mayor Tony Williams, who is destined to go down in history as the mayor who transformed the District for all while managing to miff most.

By Marc Fisher |  February 1, 2006; 7:14 AM ET
Previous: Nervous Kaine, Victorious Herring | Next: I Went on National TV and All Anyone Saw Was My Eyebrows

Comments

Please email us to report offensive comments.



You neglected to mention the CEO making $2 million in the eighties. This segment of wage earners has experienced an obscene compensation hike thanks to compliant Boards.

Posted by: Pennypincher | February 1, 2006 7:30 AM

Roddy Stinson: D.C.'s crocodilians beat up Texas but ignore their own swamp
Web Posted: 01/31/2006 12:00 AM CST
San Antonio Express-News

In case you missed the latest flood of crocodile tears shed by Washington's champions of the poor ...

"The gap between haves and have-nots has increased throughout the country, but it's particularly acute in Texas, according to the state-by-state analysis released by the Washington-based Center on Budget and Policy Priorities and the Economic Policy Institute."

—From an article, "In income, Texans live in a state of disparity," on Page One of last Friday's Express-News

It seems the secular pietists who run Washington's think tanks just can't beat Texas up enough.

Lord knows the Lone Star State deserves a good whuppin' occasionally, and I wouldn't mind the latest one so much if the District of Columbia Holy Rollers had prefaced their income-gap report with this information:

The top four executives at the Center on Budget and Policy Priorities pull down $153,000, $127,00, $122,000 and $121,000 a year.

The top four executives at the Economic Policy Institute pull down $182,000, $127,000, $100,000 and $100,000 annually.

Those numbers are from the think tanks' tax returns, available on the GuideStar Web site to anyone interested in learning more about Washington's we-love-the-poor-but-we-want-to-live-like-the-rich crowd.

In the District of Columbia, the richest 20 percent of citizens enjoy an average annual income of $157,000. The average income of the poorest 20 percent is $12,700 — a difference of $144,300.

That information (from the DC Fiscal Policy Institute Web site) is particularly interesting when compared to the numbers for Texas, where the average income of the richest fifth is $118,971, the average income of the poorest fifth is $14,724, and the difference is $104,247.

If the Texas problem is "acute," the Washington, D.C., problem is CATASTROPHIC.

Elsewhere on its Web site, the DC Fiscal Policy Institute uses information from the 2000 census to list the income gaps in the central cities of the nation's 40 largest metro areas:

Washington, D.C. — No. 1

Dallas — No. 18

Houston — No. 20

San Antonio — No. 27

Of course, reporting those numbers and the income gaps between the Washington poor and the Washington poverty warriors would make the job of flailing Texas a lot harder. So don't look for the broadcasting of such info now — or ever.

In fact, just get used to being tied to the think tanks' whipping post.

Because of Texas' border with Mexico, this state is — and will forever be — an entry point for immigrants from Mexico, Central America and South America.

Most of the immigrants are poor when they arrive, and they work at low-pay jobs until they or their children or their children's children lift themselves educationally and economically into the middle class and upper class. (There are millions of examples.)

Because many of the immigrants enter the state illegally, some Texans are critical of that population stream. But not this Texan. If I weren't a U.S. citizen, I would get here as soon as I could by any means available. God forbid I should criticize someone else for feeling/doing likewise.

But clearly this influx of immigrants skews income disparity in Texas and creates a punching bag for any think-tank "analyst" who wants to take a swing.

Speaking of which (from Friday's Express-News article) ...

"'(The income gap is) a gully across the country, but in Texas it's like a deep canyon,' said Elizabeth McNichol, a senior fellow with the Center and one of the study's authors."

I couldn't find McNichol's salary on the Internet, but I'd bet a C-note that the difference between her pay and the average income of the bottom fifth of Washington's population is greater than the gap between Texas' haves and have-nots.

(Ms. McNichol, if you read this and want to take that bet, my telephone number is below. If you read this and want to apologize to the Lone Star State, feel free to call collect.)

To contact Roddy Stinson, call (210) 250-3155 or e-mail rstinson@express-news.net. His column appears on Sundays, Tuesdays and Thursdays.


Posted by: Lone Star | February 1, 2006 9:09 AM

One question to ask: Are the same people who were low and middle income in the 1980s the same people who are low and middle income now? And I don't mean broad classs, I mean the exact same people.

Maybe that's why people don't get cheesed about stats like this. They move up, even as other people fill in the gaps. After all, how many college grads from 1986 still earn now what they did back then?

Posted by: Jacknut | February 1, 2006 9:25 AM

Great point, Jacknut. Articles such as this one are a classic example of the irresponsible misuse of statistics by the media, politicians, etc., to further their own agendas. For those interested in learning more about Mr. Fisher's and his colleagues' (willful?) misunderstanding of basic economic stats, check out "The Vision of the Anointed" by Thomas Sowell.

Posted by: Knightly | February 1, 2006 9:51 AM

Marc,

Do you actually have even the slightest bit of data to back this up, or are you talking out your posterior? In effect, you're saying...

"Sure the inequalities are growing, but I'm going to rationalize by saying lots of the people with money moved out."

Riiiight. They all voluntarilly ran out the door. Nothing to do with being priced out by escalating propety tax bills. No possibility that income didn't rise much, but renting out in the burbs became cheaper comparatively?

Ah, never underestimate the ability of a yuppie to rationalize.

Posted by: John | February 1, 2006 10:32 AM

Yes this is a good example of innumeracy in action. The figures are corrected for inflation to 2002 dollars. So the bottom 1/5 of the income distribution moved in lockstep with inflation and have the same buying power they did in the 1980's. Is anything wrong with this? In fact - I doubt every quintile *could* have increased income relative to inflation - this probably would have increased the inflation rate and changed the rescaling factor.

There is a good point about the upper incomes far outpacing inflation - they are certainly doing better than the bottom. But why do we think every income bracket deserves to outpace the cost of living?

Posted by: Jeff | February 1, 2006 10:33 AM

Anyone who lives in the District can see that there is an extreme and obvious disparity in the income of the residents. You don't need stats to see that. With all the prosperity this city has seen, the people at the bottom rungs have benefitted very little from it (if at all). Next time you come into the city, take a little drive around the housing projects near Anacostia, the detour back towards Georgetown. You will then be in a much better position to discuss the income gap in DC.

Posted by: Suburbanites, bah | February 1, 2006 10:50 AM

You callous folks who focus on nitpicking the analysis of the numbers should reflect on the fact that fully 20% of DC's residents are trying to support their families on $1000/month. Seriously, think about that for a minute.

As one of the few members of the middle class remaining in the District, I implore you: I am sick of having my car broken into by desperate fellow DC residents looking for pocket change. Maybe you rich folks with garages could care less about the rest of us--but hey, I'm middle class, not below the poverty line. Since you couldn't give a crap about lowly welfare recipients unworthy of your compassion or respect, could you at least start looking out for the subaru-driving office schmuck who is sick of replacing car windows?

Raise everybody up to a reaonable living wage, and we'd all benefit--well, except the rich and powerful, who are already safe in their gated communities and rural ranch retreats. COme to think of it, I guess that's the problem.

Posted by: josmond | February 1, 2006 12:45 PM

"Raise everybody up to a reaonable living wage..."

And how do you propose to do that?

Posted by: Anonymous | February 1, 2006 1:10 PM

"Raise everybody up to a reaonable living wage..."

And how do you propose to do that?

Sure, it's nice to want to wave the magic wand and to give everyone a "reasonable living wage" - whatever the heck that is - but making that so is fraught with danger.

Let us say, for instance that we jacked up the minimum wage to 15 bucks an hour. It's not our money, so what the heck, right? That'd be a fairly reasonable living for most of us out here - approximately 1800 dollars a month, post tax. In fact, that's pretty much what I being home every month. It's not enough to rent a decent place without a roommate, even in a MD suburb, but that's another topic entirely.

Okay, so now all our lowest-wage workers have more cash, thanks to us. Hooray, right?

Well, no. Because all those employees who were already making 15 bucks an hour suddenly find themselves with minimum-wage, entry-level jobs. Will employers boost their salaries accordingly? Not very likely, since they've already taken one sizeable hit thanks to our largess. Most smallish businesses, the place where most of us in America work, could never afford it. So now, you've essentially crushed at least a couple years of work from the guy who started at minimum wage and worked his way up to that salary. It doesn't mean a darn thing to hium now, because we, the goodhearted Americans, have instantly devalued it. Goodbye hard work. Goodbye benefits of college. Goodbye motivation to work harder.

And now that there's more money out there, retailers can feel free to let their prices creep up a bit. The law of Supply and Demand works for money too, to a large extent. Besides, those retailers just had to jack up a bunch of salaries, so they're going to need the extra money to make payroll, or they're going to have to lay off a couple people. Looks like some of that cash just got eaten up in creeping inflation forced by our generosity.

Ripples continue. Remember that "shrinking middle class" that we all read about from time to time? Well, we're the ones who shrunk it, thanks to our raising the salary floor without really thinking about what else it might do. Buying power? Well, the lower class gets a bit more but the middle class loses at least as much. We just sunk a whole bunch of people into the new lower class. Yay us.

Posted by: Jimmie | February 1, 2006 1:23 PM

Maryland *just* raised its minimum wage by a dollar for the first time in ten years to $6.15. And anybody with a college degree should be able to pull around $10 for an entry level job. Jacking it up to $15 isn't a very realistic example beyond illustrating the effects.

The minimum wage is necessary because no matter what the job, a person needs a certain income to sustain himself and continue doing that job. Small increases are necessary to keep up with inflation, just as middle-class workers get raises each year.

Minimum Wage: If they could pay you less... they would :)

Posted by: Jon | February 1, 2006 2:18 PM

One thing that I agree with 100 percent. Most people will not complain about the rich getting richer because they are working hard to be part of that group. Complaining and trying to soak those who "HAVE" does not place the "HAVE NOTS" in a higher income bracket.

Posted by: WAYNE | February 1, 2006 3:45 PM

It's almost like a game of musical chairs. The poor cash in on properties that have skyrockted since the 80's move out to the counties, while suburban residents flock to the city to get a taste of the fast life. Put down the statistical data for a minute and take a tour around some of the neighborhoods east of the Anacostia river. Look at the changes being made. Ask yourself. Are these changes going to help the poor? My answer is no becasue by the time the changes are made most of the poor will be gone. Thge rest will become low-income residents only to be written off for someones tax breaks.

Posted by: John | February 1, 2006 4:57 PM

Mr. Fischer,
I had friends exactly like the people you describe in your article. They were so certain of their amazing talent that they assured me that they would be millionaires by the time they were 21; they are now working as waiters. You are dead on that many people think that they will be millionaires some day because of their overinflated ego, but in reality never do. "John" and "Suburbanites, bah" are 100% right, regardless of statistics--which I agree, can be warped to anyone's liking--the gap between rich and poor in DC is obvious if one bothers to go to the "wrong" side of the Anacostia River. The people who don't think it exists clearly live in the suburbs or Upper Northwest. Regardless of what the rich tell you, many subconsciously believe that they are somehow more deserving of their money than the poor, and that the poor "just don't work hard enough." The poor in America can't be ignored forever.

Posted by: Chris | February 1, 2006 8:48 PM

John, if the poor manage to cash out on properties that have skyrocketed in value and move out to the suburbs, are they still poor?

Look, there's poor and there's really poor. I used to live in Columbia Heights in the late 1990s before the Metro stop opened. People there were "poor" but I saw an awful lot of color TVs, fat people and late model cars for a "poor" neighborhood.

Posted by: Jacknut | February 2, 2006 9:54 AM

Jacknut, just because someone moves to a better neigbrhood doesn't mean they can afford it. A new house can't change someones lifestyle. Most people end up having to work like slaves just to keep up with the new expenses, such as cars, and property taxes. A car is a must because metro never really comes out to the suburbs, so now they have to invest in a dependable car. Meanwhile thier job is still paying them the same, so they end up struggling just like before, the only thing that seems to change is the zip code.

Color TV's and "late model cars" don't make you rich. It make you feel rich. I can go down to rent a center right now and get a plasma screen for $60.00 a month. I can also go get a Benz in my mothers name and feel like a king. But in reality I'm broke trying to pay for all of this. You feel me.

Posted by: John | February 2, 2006 10:51 AM

John wrote: "Jacknut, just because someone moves to a better neigbrhood doesn't mean they can afford it. A new house can't change someones lifestyle. Most people end up having to work like slaves just to keep up with the new expenses, such as cars, and property taxes. A car is a must because metro never really comes out to the suburbs, so now they have to invest in a dependable car. Meanwhile thier job is still paying them the same, so they end up struggling just like before, the only thing that seems to change is the zip code."

And that makes them just like everyone else in the middle class. Welcome to the real world.

Posted by: Jacknut | February 2, 2006 11:05 AM

The Washington Post's non-stop promotion of "smart growth" land use policies has made many residents of the D.C. area poorer. If you don't already own a home, you are most likely priced out of one. You will certainly pay more for less housing.

Recent studies have shown that areas with job growth and restrictive land use policies, like the Metro area, have home prices that have doubled in just a few years. Areas with job growth and reasonable land use policies, home prices have not exceeded the growth in wages.

Large-lot zoning will soon be the rule in Loudoun where I live. I would need 20 acres to build my home today. Thus, only million-dollar homes can be built in most of the county. A detached home will be for only the richest. How many readers can buy their home today?

Most permitted housing will be high density and only in certain areas, like next to rail that has only limited use and as far away from hunt country as possible.
That is "smart-growth" policy.

Building land is now the scarcest resource, and its price is therefore soaring. Housing prices reflect that scarcity, created by government land use regulations and advocated by The Post.

People without home equity have been made poorer even if they make the same wage.

I am tired of people who have their estate complaining about protecting their quality of life at the expense of others. They want to stop growth now that they have what they want. And they are winning.


Posted by: Rose Ellen Ray | February 2, 2006 1:11 PM

About the "reasonable living wage", I'm no economist but wouldn't it make sense if companies spread the wealth around a little? Maybe just even out the salaries between CEO's and the rest of us just a little bit, so it's not such a huge disparity. Companies like WalMart and McDonald's make such huge profits, so why can't they pay their employees a little more, or improve their benefits or something?

Posted by: M | February 2, 2006 1:13 PM

For the person wondering "Are the same people who were low and middle income in the 1980s the same people who are low and middle income now?", try checking out this page on a long-term study called the "Panel Study on Income Dynamics" (http://www.pbs.org/now/politics/incomevolatility.html). A research paper from the Federal Reserve (that notorious hotbed of Communists) found that looking at a family over the course of 10 years half of those in the bottom-fifth grouping by income remained there ten years later. Additional research suggests that if you look at the same families over time they are growing more likely to remain in the same income quintile in the 1990s than they were in the 1970s or 1980s.

Also, for those annoyed by the low-six-figure salaries earned by the economists and statisticians of D.C.'s do-gooder think tanks, bear in mind that those people could probably command salaries at least twice as large if they were in the private sector, so they are foregoing some income.

Posted by: Patience | February 6, 2006 8:58 AM

"A research paper from the Federal Reserve (that notorious hotbed of Communists) found that looking at a family over the course of 10 years half of those in the bottom-fifth grouping by income remained there ten years later."

I can believe that. What about the other half that moved out of that bracket? Shall we ignore their efforts and say they were just lucky?

Getting out of the bracket is possible. It just requires a lot of fiscal discipline that most people don't have. When you are poor, you can't afford that soda. You need to drink tap water. You can't "splurge" on MickyD burgers. The goal is to save over a 10 year period to go to the next level, whether its to get your kid to college or to start your own business. How many people across all the class levels are capable of thinking over a 1 year period much less 10 years? Everyone wants to get rich right away without having to spend the years of discipline preparing the way.

Raising minimum wage to living wage might not affect the big corporations, they could probably absorb the cost structure. What about the little guy though who is working 18 hours a day running his small business and after a year finally manages to start to turn a decent profit? You try to tell me that some waiter is entitled to nice piece of that profit because he worked for me for a year? I go out of business and I lose 10 years of life savings that I put up to start the business, the waiter just loses a minimum wage job. Risk/reward ratio here folks. If I could get rich by just being the waiter, then who is going to put up the cash to start the restaurant?

Posted by: Phong | February 7, 2006 1:15 PM

Lone Star says that immigrants are OK because all they want to do is to improve themselves.

Well, there are about 5 billion people worldwide who want to move to the US. If they all came our present citizens would be miserable.

So we have to have borders. The only question is, how many people should we admit.

Personally, I think the US is way overpopulated now.

Posted by: Robert Hume | February 7, 2006 3:21 PM

The comments to this entry are closed.

 
 

© 2010 The Washington Post Company