Separation Between Rich, Poor Widening in D.C., Study Finds

By D'Vera Cohn
Washington Post Staff Writer
Friday, January 27, 2006

The gap between the city's richest and poorest families has continued to widen since 2000, as incomes at the top soared and those at the bottom barely budged, according to a report based on census data.

The District fits into a national pattern of widening inequality over the past two decades that was briefly interrupted by the booming economy of the late 1990s, according to the report released yesterday by two think tanks, the Center on Budget and Policy Priorities and the Economic Policy Institute. The gap also grew in Maryland and Virginia, the report said.

In the District, the richest families had incomes 12 times higher than the poorest ones early this decade, compared with seven times higher in the troubled economy of the early 1980s. The major reason for the widening gap: The highest incomes are growing more sharply than the lowest ones. Incomes at the top fifth rose 81 percent during those two decades, to an average of $157,700. Those at the bottom went up 3 percent, to an average of $12,700.

The report fills out a picture of a divided city where the rich and poor populations are growing, but the middle class is not. The city's economic revitalization has added thousands of jobs in recent years, most taken by suburban residents.

"It seems pretty clear that there's a large group of disadvantaged residents in the city who aren't getting the help they need to move up the economic ladder, whether it be education or training or other supports," said Ed Lazere, executive director of the D.C. Fiscal Policy Institute, an affiliate of the Center on Budget and Policy Priorities. For the city's poorest residents, the combination of stagnant incomes and rising housing prices is "creating tremendous challenges to find affordable housing," he said.

The District's growing income gap is one reason for concern about low-income residents being pushed out by high housing prices. It is fueling efforts to pass a "living wage" bill, which is on the D.C. Council agenda next month, that would guarantee city workers and contractors a higher minimum wage. In recent years, the city increased its overall minimum wage, expanded tax credits for low-income residents and added child-care assistance for working families.

But Lazere and others -- including Stanley Jackson, the city's deputy mayor for planning and economic development -- said more must be done to improve the skills of low-income residents, most of whom are working, so they qualify for better-paying jobs.

Lazere cited the city's statistics showing that most workers in the D.C. Convention Center are not city residents. "Most of these jobs don't require a college degree, and they are stable, with decent wages," he said. "We're spending city resources to create jobs and then not even ensuring they go to D.C. residents who need them."

Jackson said the city's income gap reflects a long history of problems, including the city's lack of financial solvency that hurt public services. Thousands of students drop out of high school, he said. "We've got to get back to the core issue providing the fundamental skill sets that make our residents marketable for the kinds of jobs that are emerging."

But "it's not just income," Jackson said, pointing to the increasing rate of single-parent homes, a refusal by some parents to pay child support, and family instability that results in some children bouncing among several schools a year. "We've got to get back to this issue of social responsibility."

Lazere, who released a study in 2004 that found that the District had one of the worst income gaps among the nation's big cities, said he does not have a target for what the income gap should be. "It would be nice to see incomes rising at roughly the same rate up and down the income scale," he said.

The study, called "Pulling Apart," was based on Census Bureau income data for 1980 to 1982, 1990 to 1992 and 2001 to 2003, adjusted for inflation and the impact of taxes, tax credits and the cash value of food stamps, subsidized school lunches and housing vouchers, all of which reduced the gap more than including only income would have.

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