Location Matters, Especially When You Talk About the Poverty Rate
You may have read last week that the DC metro region — which includes DC as well as neighboring counties in Maryland and Virginia — has the lowest poverty rate in the nation at just over 8 percent. But DC itself has a poverty rate of 19 percent. Why the big difference?
It may seem like a simple question, but it is worth exploring.
In metropolitan areas, typically the pattern has been that greater concentrations of wealthier households live in the suburbs. That’s certainly true in DC’s metro region, where the District is surrounded by some of the wealthiest counties in the nation. But more recently, there has been an urban renaissance with more and more people, including higher-income individuals, moving back into cities across the US. That’s certainly true in DC where our population has grown over the last decade, and the city has been adding more high income households. But despite this, DC’s median income for a family of four, meaning half of the families have incomes above and half below, is $68,600.
Meanwhile the DC metro area median income for a family of four is still much higher, roughly $103,500.
But DC’s high poverty rates also have a lot to do with DC’s very competitive job market and the mismatch between the skills DC residents have and the skills the jobs being created here in DC require. Most jobs in the District that pay a living wage require, at a bare minimum, a college degree. In Wards 7 and 8, a significant number of residents lack even a high school diploma. Last year, DCFPI reported that residents without a high school diploma are more than seven times as likely to be low-income as those with a college-degree. And an even greater proportion of jobs created in the past few years are requiring advanced degrees or specialized training of some sort, further widening the gap between the haves and the have-nots.
While the record unemployment levels in the city are also contributing to higher poverty rates, even many residents with jobs are falling behind. A single-parent with two children working a full-time, minimum wage job, still does not earn enough to lift his or her family above the poverty line of $17,570. Furthermore, the federal poverty line does not give the full picture of the depth of poverty in the District because $17,570 can go much further in places like Omaha, Nebraska than it can in the District. DC is one of the most expensive places to live in the country. For a working parent in DC, the cost of housing, food, transportation, and child care, can quickly eat up an entire paycheck.
Lastly, while the DC metro region has some of the lowest levels of income inequality compared to other metro regions, the District has some of the highest levels of income inequality. In fact, new Census data show that DC has the third highest level of income inequality when compared with other cities. A DCFPI report last year showed that wage gains for high-wage earners far outpaced the gains for middle- and low-wage earners in DC over the last 30 years. In fact, the report showed that in 2009, the gap between high-wage and low-wage earners in DC was one of the highest on record.