A City Breaking Apart: The Incomes of DC’s Poorest Residents are Falling, While Economic Growth is Benefiting Better-Off Residents

by Peter Tuths | February 25th, 2016 | PDF of this report

DC’s poorest families have suffered a dramatic loss of income since the Great Recession, while higher-income families have seen their earnings rise. The income of the poorest DC households is now lower than in most major cities, and far lower than in the DC suburbs, an especially serious problem in a region where the cost of living is among the nation’s highest. DC’s persistent income inequality is also wider than in almost any other U.S. city.[1] It is a sign that DC’s economy is not working for all, and that development, which is pushing up housing costs throughout the city, is leaving collateral damage in its wake.

DC’s lowest-income residents are overwhelmingly people of color, and nearly half were born in DC, compared with just 17 percent of other residents. This suggests that as the District’s population and economy continue to grow, long-term residents of color are being left behind. Policy initiatives – from affordable housing investments to paid family leave and mandated fair scheduling for workers – are needed to help all households cope with the changes taking place around them.

Comparisons with other large U.S. cities, neighboring jurisdictions, and examination of income trends within the District reveal worrying signs for equity in the city.

  • Incomes are falling for already low-income households. Average income for the poorest fifth of DC residents fell to $9,300 in 2014 from $10,800 in 2007. (All figures are adjusted for inflation to equal 2014 dollars.)
  • DC’s poor families are among the poorest in major U.S. cities. The average income of the poorest fifth of DC households ranked 31st among the 50 largest U.S. cities.
  • DC’s poor families have far lower incomes than suburban families. The average income of the poorest fifth of DC households is as much as two-thirds lower than it is for the low-income families in some surrounding jurisdictions.
  • Income inequality in DC has remained one of the highest among large U.S. cities for nearly a decade. The average household income of the top 5 percent of DC residents was 52 times the income of the bottom 20 percent in 2014. That is the fifth highest gap among the 50 largest U.S. cities. This income gap has remained statistically unchanged since 2007.
  • DC’s high-income households are among the wealthiest in the nation. The average household income of the top 5 percent of District residents is $487,000, the third highest among large U.S. cities. Inequality is exacerbated by the unusually high income of DC’s wealthiest residents compared to other large U.S. cities.

This analysis uses data from the U.S. Census Bureau’s American Community Survey from 2007 through 2014 to examine income disparities, and income trends in DC and the other 49 largest U.S. cities, as well as four neighboring counties and the City of Alexandria, VA.

[1] U.S. Census Bureau. Annual Estimates of the Resident Population for Incorporated Places Over 50,000, Ranked by July 1, 2014 Population.

To read the full report, click here.