Left Behind: DC’s Economic Recovery Is Not Reaching All Residents

by Ed Lazere and Marco Guzman | January 27th, 2015 | PDF of this report

The road to economic recovery in DC has left many groups of residents behind. The District has recovered from recession-related job losses, but wage and job growth have been very uneven. Low-wage workers have seen their wages fall, while higher-wage workers have seen earnings grow by thousands of dollars per year. Workers with less than a bachelor’s degree continue to experience unemployment – and especially long-term unemployment – at far higher levels than in 2007. Not surprisingly, these economic conditions have forced many workers to give up looking for work all together or to take part-time jobs.

These findings, based on Census Bureau data for 2007 and 2013, show that what appears to be a strong economic recovery in the District is really just a recovery for a small number of residents. Even those with some education or training beyond high school have seen wages fall and unemployment rise. Only those residents with the most advanced education are making economic progress. For example:

  • Hourly wages for low-wage workers are stagnant: Low-wage workers in DC earned $12.62 an hour in 2013, one percent less than in 2007. Meanwhile, middle-wage workers saw their earnings rise $3 an hour during this period, to $24.25, and high-wage workers saw a $6 an hour increase, to $45.30, in 2013.
  • Unemployment remains far above pre-recession levels for many: The District’s overall unemployment rate has fallen. However, at 7.6 percent in 2014, it is still far higher than the 5.5 percent rate of 2007. Unemployment remains especially high for some groups. For example, 16 percent of African-American residents are unemployed, compared with 10 percent in 2007.
  • Unemployment is lasting longer for many: DC has experienced a significant spike in the number of workers who remain unemployed for more than six months. In 2013, nearly three-fifths of workers with a high school diploma who lost a job were unable to find work for more than six months. In contrast, only 22 percent experienced unemployment that long in 2008.
  • One-third of DC residents with a high school diploma are unemployed or work less than they would like to: The underemployment rate—which includes workers who can’t find work, are working part-time when they want full-time work, or have given up looking—jumped significantly between 2007 and 2013. Nearly one-third of all high school graduates are underemployed. Workers with some college education have seen the largest increase in underemployment, from 9 percent in 2007 to more than 22 percent in 2013.

In short, DC’s economy is not enabling all residents to succeed. The findings of this analysis suggest that more needs to be done to help residents earn a living wage. The District has a number of strengths to build on, including a minimum wage that will rise to $11.50 an hour in 2016, a requirement that all employers provide paid sick leave to their workers starting with their first day on the job, new penalties for employers who fail to pay workers appropriately, and a range of training programs for adults and youth.

The District can build on these efforts by expanding the minimum wage for workers who primarily rely on tips – who have a set minimum wage of just $2.77 an hour before tips – and by taking steps to enforce new minimum wage, paid sick leave, and wage theft laws. The District can do more to coordinate and strengthen literacy and job training programs, and to take advantage of federal job training funds. And it can strengthen supports for working families, such as child care.

To read the full report, click here