Poverty Rate Grows Amid an Economic Boom
Wednesday, October 24, 2007
The District's poverty rate is the highest in nearly a decade, and the employment rate for African American adults is at a 20-year low, according to a study to be released today.
Although the District's robust economy has spurred job growth, higher salaries, a construction boom and neighborhood revitalization, the city's poorest and least-educated residents have been left behind -- living "on the other side" of the city's "gleaming economy," the D.C. Fiscal Policy Institute says.
The institute's study, titled "D.C.'s Two Economies," also shows that the gap between high-wage and low-wage workers in Washington is at an all-time high, with salaries for the least-paid workers (adjusted for inflation) virtually unchanged in three decades. Income inequality in the District is greater than in every city in the United States other than Atlanta and Tampa, the study says.
The study's author, Ed Lazere, called the findings not only "striking and depressing," but also a clarion call for the administration of Mayor Adrian M. Fenty (D) to find ways to reach out to city residents "who are not succeeding . . . and who are not connecting to the economy."
"You would expect that when the tide is rising that all boats are going to go up somewhat," said Lazere, who analyzed 2006 data from the U.S. Census Bureau and the Bureau of Labor Statistics. "But to have worsening economic conditions for D.C. residents at a time when most people think our economy is doing terrifically should be concerning to all of us."
In a statement, Fenty said the Poverty Commission he created when he was on the D.C. Council last year will use the report in its work to determine how the city should deal with poverty. He said that his "key priorities -- education, job training and affordable housing" -- have been developed to combat poverty.
The study found that the employment rate for black adults fell from 62 percent in the late '80s to 51 percent in 2006. In addition, the employment rate among all residents with only a high school diploma is also at 51 percent, the lowest point since 1979.
The findings mirror those in other recent studies, both nationally and regionally, that have noted the District's extreme income inequality and that the poverty rate for blacks is more than triple that of whites.
"The city's economic strength and the prosperity that many people in the city are enjoying isn't being shared," said Margery Turner, director of the Urban Institute's Center on Metropolitan Housing and Communities.
In preparation for the center's annual Washington area housing report, due for release next month, Turner said her researchers also have found that "in a booming region and thriving city, the lowest-wage workers are really struggling and not experiencing gains."
Such disparity, she said, presents public policy challenges to the District government on multiple levels, especially housing.
"It's a real challenge for the city to create and expand affordable options for those in low-wage jobs at the same time it expands and grows the resurgence of the high end of the market," she said. "There's a lot of positives that come out of that revitalization, but it also makes [it] that much more difficult for those at the bottom and those slipping further behind."
A report released in June by the D.C. Chamber of Commerce characterized Washington this way: "In 2007, the District is a city etched by divides." The group noted the surge in high-priced homes and business property values as the poverty rate continues to climb; that low-income tenants pay more than a third of their annual income in rent; and that many single-parent households in which the parents work are classified as poor.
"New and affluent residents help [the city] greatly with more tax revenue but do not solve these problems," the chamber said.
Lazere, whose research organization focuses on policy issues that affect low-income D.C. residents, said District officials must look beyond "just having job fairs or just encouraging businesses to come to D.C. and hire D.C. residents. Clearly, that is not enough."
He said he applauded Fenty's announcement last month that he would use $14 million of the city's $100 million surplus generated by 2007 property tax revenue to expand job programs for youths and ex-offenders next year.
Georgetown University public policy professor Harry Holzer, formerly the chief economist at the U.S. Labor Department, said the District's economic picture stems, in part, from the migration to the suburbs of middle- and working-class white and black families during the city's fiscal decline of the mid-1990s. Higher-income whites are more likely to move back into the resurging city, accentuating the differences between them and the low-income blacks who never left.
"The city has to try to improve the earning prospects for poor people, wherever they're found, wherever the jobs are and, of course, to improve training and educational options, especially for younger people," Holzer said.