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Income Inequality in DC Highest in the Country

The District has a higher level of income inequality than any state in the country, with households in the top 20 percent  of income having  29 times more income than the bottom 20 percent. The bottom fifth of DC households had just two percent of total DC income in 2016, while the top fifth had a staggering 56 percent.

The District’s “Gini coefficient,” a measure of inequality, reflects these disparities. A coefficient of 0 indicates perfect equality, with all income proportionally distributed amongst the population, while a coefficient of 1 indicates perfect inequality, where one household has all the income. At 0.542 in 2016 —based on Census Bureau data—DC has the highest Gini coefficient when compared with the 50 states, and on par with Puerto Rico. The District of Columbia’s Office of Revenue Analysis, which uses tax return and other data to derive DC’s Gini coefficient, often reports a much higher number, suggesting wage distribution is less even than the ACS suggests. By contrast, neighboring Maryland and Virginia have lower income inequality than the nation as a whole, with Gini index of 0.450 and 0.471, respectively.

Source: American Community Survey Briefs

DC also has one of the highest poverty rates in the country, when compared with states, behind only Mississippi, Louisiana, and New Mexico. At 18.6 percent, it is significantly higher than the national average of 12.7 percent. Today, at a time when poverty rates are declining nationally and are returning to pre-recession levels, nearly one in five District residents live in poverty. This is particularly true for Black DC residents, who are the only racial group to experience an increase in poverty rates since before the recession.

In fact, both poverty and income inequality in the District differ greatly along racial lines. While the poverty rate for white District residents is 7.9 percent, it is 27.9 percent­—nearly four times higher—for Black residents, and 17.8 percent—more than twice as high—for the Latinx community. Moreover, Black families earn less than a third of their white counterparts, average 81 times less wealth than white families, and are significantly more likely to be in poverty.

Source: DC Fiscal Policy Institute

This means that race is at the heart of DC’s economic inequality problem. As the District continues to prosper, these disparities are a stark reminder of the work that still needs to be done to rectify the impacts of historical barriers to economic opportunity that Black residents have, and continue to, face.