The gap between the haves and the have-nots is larger in the Washington area than almost anywhere else in the country — a creeping trend that experts warn could have far-reaching socio-economic consequences. The top wage earners in the District made nearly 5.5 times more than those on the low end of the wage scale, for the second-largest gap between rich and poor in the country, behind only New Jersey, according to the Commonwealth Institute for Fiscal Analysis, a Richmond-based think tank.
The gap between rich and poor in Virginia is the third-widest in the country at 5.22 percent. The gap in Maryland is the seventh-largest at 5.02 percent.
That gap is the widest it’s been in 30 years for both Virginia and Maryland, and the third-highest seen in the District over that period.
| 2009 ratios between rich and poor* | ||
| State | ratio | |
| 1 New Jersey | 5.73 | |
| 2 D.C. | 5.49 | |
| 3 Virginia | 5.22 | |
| 4 California | 5.17 | |
| 5 Connecticut | 5.11 | |
| 6 Massachusetts | 5.08 | |
| 7 Maryland | 5.02 | |
| 8 New York | 4.98 | |
| 9 Colorado | 4.90 | |
| 10 Illinois | 4.77 | |
| U.S. | 4.66 | |
| *Top percentile of hourly wages to bottom percentile of hourly wages. | ||
| Source: Economic Policy Institute analysis of Current Population Survey data | ||
The top 10 percent of workers in the District earned at least $53.68 per hour, while the bottom 10 percent make no more than $9.78. Assuming a 40-hour workweek, that means D.C.’s top earners were paid $111,654 in 2009, the latest year for which data are available, compared with $20,342 for the lower end.
The hourly wage ratios leave out other factors that affect income, like hours worked as well as dividend and interest income, but the widening wage and income gaps have significant implications for an economy still lurching toward recovery, said Michael Cassidy, president of the Commonwealth Institute.
“Among the primary vehicles for economic [growth] and stability pos/world/ War II [was] the building of the middle class,” Cassidy said. “To the extent that we’re not seeing the wage growth that we need in these huge segments of the labor force, then we’re not going to see consumption.”
The gap also affects the social fabric in communities like D.C., where rich and poor share boundaries but vary widely in means, said Martha Ross, deputy director of Greater Washington Research at the Brookings Institution.
The median household income for the District’s wealthiest area, between Georgetown and Friendship Heights, is $103,000, for example. That’s about $71,000 more than the District’s poorest area on the opposite side of the Anacostia River, according to 2009 census data.
“It’s a real and disturbing trend,” said Ross. “The social fabric gets less [integrated] if there’s a bunch of high-income people and a bunch of low-income people and they don’t see their interests as aligned.”
The District’s large gap between high and low earners is likely accentuated by the high concentration of lobbyists, lawyers and government workers in the area, said Daraius Irani, an economist at Towson University.
Moreover, as corporations push to cut labor costs, people at the lower end of the wage scale are the ones whose earning power is being undercut, he added.
“It is a challenge — we’re just not creating enough jobs where individuals with a high school diploma can get into,” he said.
