As the D.C. mayoral campaign gains momentum, research we’ve just completed raises critical issues for those who would lead the city.
●Fewer than half (47 percent) of the city’s African Americans over age 16 have jobs, compared with 80 percent of white residents over 16.
●Though the national economic expansion is almost five years old, 20 percent of D.C. residents with only high school diplomas are unemployed, compared with 12 percent in 2008. Their typical wages, adjusted for inflation, have fallen from $15 an hour to $12 an hour.
●The city is among the most unequal in the country. The richest 5 percent of District residents have higher incomes than their counterparts in every other large U.S. city — an average of $530,000. (That figure leaves out capital gains, which is a large source of wealth for the most affluent.) Though many think of New York as the nation’s capital of inequality, its top 5 percent earn $100,000 less than the District’s on average.
●The average income for the poorest fifth of D.C. households is $9,900 — in a city where fair-market rent for a one-bedroom apartment is almost $15,000 a year.
●The District is attracting a thousand new residents a month, but this news also means that low-cost housing has become a thing of the past. The District lost more than half of its affordable rental stock between 2000 and 2010, and most low-income families spend more than half of their incomes on rent. Homelessness has surged such that shelters are over capacity year after year.
Any meaningful mayoral vision must be built around a policy agenda designed to meet these challenges in the interest of creating a city where prosperity is much more broadly shared.
Education and training, from preschool to the workplace, are key. About 40 percent of the adults seeking employment services in the District have literacy skills so low that they are not able to participate in training programs. The city’s funding commitment to adult literacy is less than 1 percent of what is spent on D.C. Public Schools and public charter schools. Investing in adults can have multiple payoffs, since children do better in school when their parents have stronger reading and math skills.
D.C. school reforms have resulted in notable progress, but most low-income students still perform “below basic” on standardized tests. Therefore, aggressive efforts to increase high school graduation rates, starting with successful early-childhood programs, are an obvious starting point.
These investments are critical, but with unemployment rates for lower-skilled workers as high as they are in the District, it will take direct job-creation efforts to ensure that training graduates don’t end up “all dressed up with nowhere to go.” Residents see new cranes in the sky all the time, and school renovation projects and road crews regularly pop up across the city. With new public infrastructure projects and commercial developments, along with retail and tourist services, the District can provide gainful work to far more job seekers. But this will likely require the city to initiate public works projects or otherwise pay for more of these jobs itself.
Proposals to make work pay are an important part of the solution. With 64,000 workers in the city making less than $11.50 an hour, the city’s new minimum wage will benefit a significant share of the workforce, especially people in food preparation and retail sales. Paid sick days will also help workers remain healthy and productive, without fear of wage loss.
Recommendations from the recently completed D.C. Tax Revision Commission, such as expanding the earned income tax credit, would put more money in the pockets of the working poor. Assistance to offset the largest expenses related to work, such as transportation and child care, would help ensure that workers can get to their jobs each day.
Finally, it will be hard to keep wages growing in line with the District’s rising housing costs. The city needs to expand its affordable housing efforts just to keep up with the loss of low-cost, private market housing. Without such investments, residents may not be able to afford to stay even if they have a job at a higher minimum wage.
A city as financially strong as the District, with surpluses year after year, has the means to invest in its workforce. It is awfully hard to imagine how we can proudly stand as our nation’s capital with such stark divisions in income, wages, skills and jobs. President Obama has called this the challenge of our time. In 2013, New York Mayor Bill de Blasio ran on a platform to address that city’s version of these inequalities. It is now time for those who want to be the District’s next mayor to explain their vision to bridge that divide.
Jared Bernstein is a senior fellow at the Center on Budget Policy and Priorities. Wes Rivers is a health policy analyst at the D.C. Fiscal Policy Institute.