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Job market changing D.C.'s income and racial makeup

By V. Dion Haynes
Monday, February 14, 2011; 9

The population of the District is becoming wealthier and whiter, according to research by the Brookings Institution, a reflection of an economic gap attributed in part to a job market that is creating tens of thousands of high-paid and high-skilled positions but hemorrhaging lower level ones.

From 2000 to 2009, the District gained 39,000 households with incomes of $75,000 and higher, according to a Brookings analysis of Census data. During that same period, the city lost 37,600 households with incomes of $50,000 or less.

At the same time, the city's proportion of black residents dropped to 52.7 percent from 59.4 percent, while its share of white residents rose to 33.3 percent from 27.8 percent.

As the city struggles to fill a $440 million budget deficit, experts say, the increase in affluent households should bring more tax revenue, more retail sales and eventually a healthier housing market. Indeed, restaurants, shops and even banks in recent months have been expanding their payrolls to fulfill growing consumer demand.

Aba Bonney Kwawu, president of the Aba Agency, a D.C.-based public relations and marketing firm that specializes in the luxury market, said the trend also can be seen in the arrival of new high-end clothing stores, such as Rag & Bone, which is opening a shop in Georgetown soon.

For the retailer "to choose D.C. is significant," Kwawu said. "It says a lot about the availability of money to spend in this market but also about the taste level."

The loss of middle- and low-income residents is likely related to a growing mismatch between the people who calls the District home and the jobs available. A large number of the city's unemployed may not be qualified for the jobs that are being created -- mainly in the federal government and in professional and business services. Some experts say they believe those factors are driving minorities into suburban Maryland and Northern Virginia.

"The shrinking African American population and the growing white population show the way in which poverty is distributed in both those populations," said Benjamin Orr, a research analyst at Brookings's Metropolitan Policy Program. "I forecast that by 2014, African Americans would no longer be the majority in the District."

Orr's data is part of a study on the city's housing market that will be released in the spring.

"As the [population] becomes more affluent, those not in that income bracket are left behind and further priced out of the housing market and are generally unable to live in the District," he added.

From 2000 to 2009, the District experienced a net gain of about 64,000 jobs, said John McClain, deputy director of the Center for Regional Analysis at George Mason University. The vast majority of them have been high-paying high-skill jobs: 25,500 in the federal government; 20,700 in professional and business services; 13,900 in health and education.

The region's relatively low unemployment rate -- it was 5.7 percent in December -- is drawing thousands of job seekers from other parts of the country who are filling many of the new positions.

Meanwhile, middle- and low-skilled jobs during that time have been disappearing. Sectors that experienced net losses were transportation and utilities, down 2,900 jobs; manufacturing, down 2,400; and construction, down 200.

The problem is particularly acute for black D.C. residents, whose unemployment rate in the third quarter of 2010 was 18.9 percent, compared with 2.5 percent for whites, according to the Economic Policy Institute. A large proportion of blacks in the District are undereducated and do not qualify for the jobs most in demand.

The Brookings data, experts say, underscore new efforts by D.C. leaders to address the skill mismatch. The D.C. Council is considering a proposal to strengthen the quality of job training programs and a requirement for city contractors to hire residents.

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