Income inequality has been a hot topic for policymakers and activists nationwide, with concern about the widening gap between the rich and poor fueling everything from job-training efforts and affordable-housing initiatives to debates over the minimum wage.
Now, a study published Monday brings into focus how this dynamic is playing out in the greater Washington area, where data show that falling wages and fewer jobs for workers without college degrees mean that the majority of workers here are not sharing in the region’s prosperity.
The study found that the median wage for workers with only a high school diploma decreased by 5 percent between 2007 and 2012. For workers with no high school diploma, the drop was even sharper: Wages declined by 13 percent during the same period. Meanwhile, college-educated workers saw their median wages grow 9 percent.
Overall, median household income in this area fell 8.5 percent between 2007 and 2012, the study found. The researchers say this decline, along with many of their other findings, show that even middle-class workers are facing head winds in the post-recession economy.
“We’re not just talking about a sliver or a segment of the lowest-wage, lowest-skilled workers and their travails,” said Michael Cassidy, chief executive of the Commonwealth Institute who worked on the study. “I think the biggest takeaway of this report is that most of the workers in the national capital region are struggling to get by.”
The report — produced by the Commonwealth Institute, D.C. Fiscal Policy Institute and the Maryland Center on Economic Policy — shows that for every dollar that a high-wage worker earns in the region, the lowest-wage worker pull downs only 16 cents. That is a greater divide than is seen at the national level, where the lowest-wage workers earn 21 cents for every dollar made by high-wage workers.
Each of the organizations that worked on the study is a nonpartisan research group focused on economic and fiscal policy issues in their respective jurisdictions.
It’s not just the wage gap that is driving the disparity between wealthy and other workers. Researchers found that potential employment for those with college degrees rose by about 200,000 jobs between 2007 and 2012. For those without college degrees, however, there were 110,000 fewer jobs.
“Our economy just isn’t working like it used to for workers without a college degree,” said Jenny Reed, policy director of the D.C. Fiscal Policy Institute. “There was a point in time where you could find a job to support a family with just a high school diploma. But those opportunities are now few and far between.”
The study illustrates that a slack labor market and a decline in wages are having a deep impact even outside the region’s urban center. The biggest dips in household income in this area were in Calvert and Fauquier counties, while the poverty rate in Charles County doubled between 2007 and 2012.
“It underlines that poverty exists, and it is actually in greater numbers in the suburbs than in the core of the region,” said Benjamin Orr, executive director of the Maryland Center on Economic Policy.
Suburban residents in the Washington area also face a difficult cost-of-living conundrum: Workers are often lured to the suburbs by cheaper housing but then have to endure grueling commutes.
About 12 percent of low-wage workers have commutes that are greater than 50 miles. And those commutes can be pricey: The study found that in Fauquier, Spotsylvania and Frederick counties, the average housing and transportation costs equal more than 45 percent of the median incomes in those counties. The same is true of Prince George’s, a close-in county.
Reed said this can be a difficult situation for low-wage workers to break out of because many of the jobs they are most qualified for, such as positions in restaurants or hotels, are clustered in the most expensive neighborhoods.
The researchers who conducted the study say recent boosts to the minimum wage in the District and Montgomery and Prince George’s counties could be part of a solution to these problems. In fact, they’ve calculated that 64,000 jobs in the District alone will see a bump in pay thanks to the new provisions.
The nonprofits also recommend increasing affordable housing as well as access to health care and job training as ways to help low- and mid-wage workers get on stronger economic footing.
“The economy in the national capital region is very much rewarding the highly educated workers,” Cassidy said, “whereas less educated workers are left in the dust.”