Who is Low-Income in DC?

by Jenny Reed | October 26th, 2010 | PDF of this report

INTRODUCTION

The District of Columbia’s poverty rate is far above the national average and has remained high even in periods of strong economic growth.  Some 133,000 residents — nearly one-quarter of the population — are low income, which in 2006-2007 corresponded to an income at or below $24,475 a year for a family of three.[i] DC’s low-income population is so large that it would overflow RFK Stadium and the Nationals’ Ballpark combined. [ii]

DC’s poverty rate rose significantly during the early 2000s despite strong economic growth, reaching a peak in 2005-2006.  The number of low-income DC residents began rising again in 2009 as a result of the economic recession.[iii]

Because poverty is associated with lower educational outcomes, poor nutrition and health, child neglect, and increased neighborhood crime, tackling poverty is an important goal for the District.[iv]

Any attempt to shape policies that will reduce the number of people living on low incomes must take into account which groups of residents are most likely to have low incomes and which groups make up the largest share of the city’s low-income population.  This report provides a detailed demographic profile of DC’s low-income population to help answer these questions.  It also examines the work experience of low-income DC residents and analyzes what would happen to the number of DC residents living in low-income families if working residents were paid a higher wage and able to secure full-time, year-round employment.

The key findings and recommendations are summarized below:

SECTION 1: WHICH GROUPS OF DC RESIDENTS ARE MOST LIKELY TO BE LOW-INCOME? Overall, approximately one in four DC residents lived at or below 150 percent of poverty in 2006-2007.  However, nearly half of the residents of some groups are low-incomes:

  • Single-parent families and residents with disabilities are most likely to be low-income. Nearly half of the DC residents in single-parent families have incomes below 150 percent of poverty.  Most of these families are headed by a single woman.  Residents with disabilities also are likely to have low incomes, with 43 percent falling below 150 percent of poverty.
  • Many children, Black residents, and singles without children are low-income. More than one-third of children, nearly one-third of Black residents, and nearly one-quarter of childless singles have incomes at or below 150 percent of poverty.
  • A large share of residents without a high school diploma are low income. Residents without a high school diploma are most likely to be members of low-income families, with close to half below 150 percent of poverty.  But nearly one-third of residents with a high school diploma — and one-fifth of those with some post-secondary education —also have low incomes.

SECTION 2: WHICH GROUPS MAKE UP THE LARGEST SHARES OF DC’S LOW-INCOME POPULATION? The groups with the highest poverty rates do not necessarily have the largest numbers of low-income residents.   

  • Many low-income residents are in families with an adult who is elderly or has a disability. One-third of low-income residents live in families with an adult who is elderly, has a disability, or both.  This means that a strategy focused solely on work will not successfully move all residents above the low-income threshold.  
  • Nearly half of DC’s low-income population lives in single-parent families. Some 44 percent of DC’s low-income residents live in a single-parent family.  The large majority of these families — 81 percent — are headed by women.  Given the difficulty single parents have in combining working and caring for children, efforts to reduce the number of low-income residents need to take their special needs into account.   

SECTION 3: THE RELATIONSHIP OF WORK AND PAY TO LOW-INCOME STATUS. Work — even full-time work — often is not enough to lift an individual or a family above 150 percent of poverty.  A significant share of low-income DC residents work full time and many others work part time.  

  • A majority (57 percent) of low-income residents live in a family in which at least one adult works. One-third of DC’s low-income residents live in families with a full-time worker.
  • At the same time, a significant share (43 percent) of low-income residents are in a family with little or no work in the past year. Increasing employment among those with limited work experience is an important component of moving families above 150 percent of poverty.
  • Low wages are one of the main causes of economic insecurity for DC residents. The median wage for workers in low-income families is just $9.14 an hour, which is too low to lift a family of three above 150 percent of poverty even with full-time, year-round work.

SECTION 4: BETTER JOBS CAN HELP DC RESIDENTS MOVE TOWARD ECONOMIC SECURITY. Simulations using Census Bureau data reveal that if all adults in low-income families obtained full-time work at $15 an hour, this would lift 80 percent of low-income DC families above 150 percent of poverty.[v]

  • Increasing wages will have a greater effect than increasing work hours. If each low-income working adult in DC were able to work full-time year-round at his or her current wage, the DC low-income population would be reduced by only 25 percent, because wages for this group are so low.  By contrast, increasing the wages of all low-income workers to $15 an hour — without changing their work hours — would move nearly half of all residents in low-income working families above 150 percent of poverty.
  • Increasing work to full time, year round and increasing wages is the most effective way to move working families toward economic security. Nearly two-thirds of low-income working families would move above 150 percent of poverty if all able-bodied adults were able to work full time and received at least $12 an hour. Nearly 80 percent of low-income working families would move above 150 percent of poverty if all able-bodied adults were able to work full time and received at least $15 an hour.
  • The challenge to achieve economic security through work is especially great for single parents. Even with an adult working full time and year round, more than one-fourth of residents in single-parent families are low income.  This is because single-parent families have only one potential earner.

SECTION 5: POLICY IMPLICATIONS. The findings of this paper lead to a number of broad policy solutions that DC should consider adopting to help move residents above the low-income threshold.

  • People with disabilities and the elderly, both those who can and who cannot work, need additional supports. Policies to assist these low-income residents should include enhanced cash assistance benefits, greater access to housing assistance and other basic needs supports.  In addition, added job training and supports should be provided to assist persons with disabilities as they begin employment.  Lastly, better coordination among businesses, the DC government agencies that provide supports and services, and people with disabilities can help ensure services are efficient and adequate.  
  • Helping low-income families find full-time work that pays a decent wage is critical. Policies to improve education and training opportunities can help both working and out-of-work residents obtain jobs that offer both a decent wage and full-time hours.  This could be accomplished by connecting residents with DC’s community college system, vocational training through the schools and private job training programs.  Additionally, many residents will need help overcoming barriers that are keeping them from employment.  This can be accomplished by connecting residents to literacy training, GED completion, mental health, substance abuse and domestic violence services.  

Enforcing DC’s Living Wage and First Source hiring requirements also would help boost the incomes of some of DC’s low-income working families and ensure DC residents are getting some of the jobs generated by DC’s growing economic development.  DC’s living wage – currently about $12 an hour – applies to all jobs provided by businesses with city contracts and to DC-subsidized development projects.  First Source requires the same businesses to hire DC residents for at least half of new jobs created.  Neither law is being enforced effectively.

Lastly, better coordination among the DC government agencies that provide job training supports and services, businesses, and those seeking work can help ensure services are efficient and adequate to meet demand.

  • Single parent families need more assistance. Single-parents need special help to obtain jobs that can support an entire family on one salary, and they need supports, like child care, to help make work possible.  DC’s Temporary Assistance to Needy Families program (TANF) serves one out of three children in the District, and almost all of them are in single-parent families.  DC’s TANF program often fails to assess participant needs and work barriers, and it provides relatively limited employment services.   Making improvements to TANF to connect parents with services and quality jobs would be especially helpful to low-income single parents.[vi]
  • Work supports are essential. There are many jobs in the District with very low wages that keep workers at low incomes even if they work full time.   Even with additional training and education opportunities to help residents obtain better paying jobs, training will not likely reach everyone, and there will still be jobs that just don’t pay enough to keep all workers from living on low incomes. Reducing high tax liabilities on the working poor and improving access to child care assistance, transportation assistance, affordable housing and other basic needs can help low-income families achieve economic security through work.

To read the full report, click here.


[i] This analysis defines “low-income” as having income at or below 150 percent of the federal poverty line.  For more information, see the box on page 5.

[ii] The Nationals’ Ballpark seats 41,888 and RFK can seat 56,692.

[iii] Jenny Reed, “Poverty on the Rise in the District: The Impact of Unemployment in 2009 and 2010,” DC Fiscal Policy Institute, March 24, 2010, available at: www.dcfpi.org.

[iv] DC Fiscal Policy Institute, “Disparities in the District of Columbia: Poverty is a Major Cause,” November, 2006, http://dcfpi.org/?p=44.

[v] Adults include the head of household, spouses or unmarried partners who are ages 18-64 and not disabled.

[vi] Katie Kerstetter and Joni Podschun, “Voices for Change: Perspectives on Strengthening Welfare-to-Work From DC TANF Recipients,” DC Fiscal Policy Institute and SOME, Inc. (So Others Might Eat).  Available at: http://www.dcfpi.org/voices-for-change-perspectives-on-strengthening-welfare-to-work-from-dc-tanf-recipients