A Tale of Two Cities Confirmed

The District of Columbia is sometimes described as a tale of two cities: One city is thriving and affluent, another is struggling and poor. Last week, the U.S. Census offered confirmation of this split: A new report shows that income inequality in our city is one of the highest in the nation.

What is income inequality? Income inequality measures how income is distributed in a society, i.e. whether it is concentrated in a small percentage of households or it is spread evenly among a large portion of the population.

When comparing DC to cities with population greater than 100,000, the District came in third in overall income inequality. Using this measure, known as the Gini index, Atlanta had the highest inequality followed by New Orleans.

Income inequality is an important measure because it shows how a society—whether that be a neighborhood, city or nation—is economically structured. It also helps explain, for example, why the District has one of the most vibrant economies in the country yet still has a very high unemployment rate. There are some District residents who are doing very well, but there are some who are doing very poorly.

This can be seen in other economic indicators as well. As noted in the DCFPI report, Packing a Punch, the employment gap between black and white residents of DC is the largest it has been in 30 years.  Hourly earnings for high-wage earners increased nearly 30 percent while those at the bottom grew by just 11 percent.
For those with a high school diploma, median wage for someone with a high school degree increased just one percent over last 30 years. Contrast that with the median wage for a college graduate, which has risen nearly 30 percent in last 30 years.

DC’s high cost of living, and little growth in wages for low-wage earners means they have an even harder time getting by in DC.  Earnings for low-wage workers cover just half of a ‘basic family budget.’ This gap is higher than in every other large US city except Honolulu and NYC.