Falling Short: The District’s Economic Recovery Is Leaving Several Groups Behind

by Jasmin Griffin and Jenny Reed | March 5th, 2014 | PDF of this report

The District’s economy shows many signs that it has recovered from the Great Recession. However, for many groups of residents, the city’s recent economic growth hasn’t translated into higher wages or a substantial increase in employment. Wages have been stagnant or falling since 2008 for DC’s low-wage workers, those without a college degree, and African-American and Hispanic residents. Unemployment rates for these groups remain stubbornly high and have not fallen to pre-recession levels.     

Instead, the benefits of the District’s recent economic growth have been concentrated among a few demographic groups. Unemployment rates have fully or nearly recovered to pre-recession levels for residents with a college degree and white, non-Hispanic residents. And wages for middle- and high-wage workers have increased significantly. 

These trends point to growing inequality in Washington, DC, and an economy that is working well for some, but not working for many others. 

  • Growing Wage Inequality: Pay for low-wage DC earners fell from $13 an hour in 2008 to $12 an hour in 2012. (Unless noted, all figures are adjusted for inflation to equal 2012 dollars.) Meanwhile, wages for middle-wage workers rose $3 an hour and high-wage earners saw a $4 increase in hourly pay. The gap between low-wage workers and high-wage workers is now at the widest level it has been since 1979. 
  • Limited Progress for Residents without a College Degree: The typical wage for residents with only a high school degree fell from $15 to $12 an hour between 2008 and 2012. Twenty percent of these residents were unemployed in 2012, compared with 12 percent in 2008. Meanwhile, wages have grown for those with a college degree or higher, and unemployment levels for that group have nearly recovered to pre-recession levels.
  • Stagnant Wages, High Unemployment for African-American and Hispanic DC Residents:  Hourly wages for Hispanic residents have not grown since 2008, and the hourly pay for the typical African-American resident grew just two percent, while wages for white, non-Hispanic residents rose nine percent. Unemployment levels for African-American and Hispanic workers are roughly two-thirds higher than pre-recession levels while unemployment has dropped for white, non-Hispanic residents.
  • Falling Employment particularly for African-American Adults: Employment levels for African-American residents decreased at a much faster rate than employment for other racial or ethnic groups between 2008 and 2012, continuing a decades-long trend. Under half of African- American adults in DC were employed in 2012, compared with 80 percent of white, non-Hispanic adults.

This paper looks at the changes in wages and employment for DC residents from 2008 to 2012 using data from the Current Population Survey from the Census Bureau. It also makes recommendations on steps the District can take to help prepare residents for jobs that require higher education and training by focusing on adult literacy, sector-specific training, and youth work programs.

To read the complete report, click here.