If you were in the bottom 20 percent of income earners in the District in 2002, there’s a 39 percent chance you remained there in 2012. Just 33 percent of people who earned in that bottom income bracket — which is less than $20,000 in 2002 — made it to the 40th percentile or above of income earners in 2012.
District, Measured, a blog from D.C.’s Office of the Chief Financial Officer, looked at D.C. income tax returns for single individuals for 2002 and the same individuals in 2012 to see how likely it was to move up the income ladder. In all, there were 22,742 single filers for both years.
The matrix above, courtesy of District, Measured, maps out the income mobility over the decade of these tax filers. Take a look at the second row, which represents those who were in the 20th to 40th percentile income bracket in 2002, meaning they earned between $20,000 to $35,000. Thirty-five percent of those tax filers stayed in that income bracket in 2012. Eighteen percent of them went down an income bracket, and 10 percent made it to the highest income bracket.
When reading across the matrix, boxes shaded yellow denote that the tax filer stayed in the same income bracket, red denotes downward income mobility, and blue indicates upward income mobility.
If you were in the highest income quintile in 2002, earning more than $85,000, there’s an 80 percent chance you remained there in 2012, and a 2 percent chance you dropped down all the way to the bottom quintile.
District, Measured says that the median age for filers stuck at the bottom was 49 years old. These people are far along in their careers, making it harder for their income prospects to improve in that decade.
The data suggest that there is a 33 percent chance for those in the lowest quintile to make it into the middle class status or higher, or rather the 40th percentile or higher.
“In a society where income mobility mitigates some of the worst effects of an unequal distribution of income, an individual through increased work experience and skill acquisition, would likely experience at least one movement up the ladder over a ten year period, or stay steady if she or he is at the top rung,” District, Measured writes. “While the data indicates that this is the case for most filers who started in the top three quintiles, for those on the lowest rungs of the ladder (the lowest two quintiles) the chances of moving up are only about 50/50.”
There are some caveats to consider when looking at this data. This only looks at single filers, not married ones. So if you were single in 2002, and married in 2012, your tax filings are not included in this data set. Having a two-income household would make it easier to move along the income ladder. This data only looks at single filers who were District residents in both 2002 and 2012, and does not account for people who may have left or come to the District during this time period in search of economic opportunities.
But, as District, Measured notes, between 2002 and 2012, the D.C. economy was one of strongest in the nation, so the probability that someone could move to another state to move up the income ladder was likely not high during this period. This also suggests that the data is representative of D.C. and the scope cannot be expanded to show mobility in other places.
Read District, Measured’s full findings here.