DC Poverty Rate Ticks Down (Maybe)

Hard on the Census Bureau’s Income, Poverty and Health Insurance report come results from the American Community Survey. And, as the headline indicates, the overall D.C. poverty rate seemingly dropped — but barely. So little, in fact, that the percent difference from 2011 is within the margin of error.*

More detail on that, plus some other gleanings from the survey.

Poverty Rates a Mixed Story

The poverty rate in the District apparently declined from 18.7% in 2011 to 18.2% in 2012. This left about 108,860 residents below the very low poverty thresholds — just $23,283 for a two-parent, two-child family. And, as I noted, the margin of error — 1.3% — casts doubt on real improvement.

Assuming a real drop, the poverty rate was still 1.8% higher than in 2007, just before the recession set in. It was also 3.2% higher than the national rate.**

The extreme poverty rate, i.e., the percent of residents living below 50% of the applicable threshold, effectively flat-lined at 10.4%. In other words, more than 62, 200 residents were devastatingly poor, especially when we consider the high costs of living in D.C.

As in the past, the child poverty rate was much higher than the overall rate. It was 26.5% last year. So nearly 28,590 D.C. children were officially poor. Well over half of them — 15.8% — lived in extreme poverty.

Both the plain vanilla and the extreme poverty rates for children were lower than in 2011 — the former by 3.8%. But they were both higher than in 2007, when the child poverty rate was 22.7% and the extreme poverty rate for children 12%.

They were also both higher than the national rates. These, as I earlier reported, were 21.8% and 9.7%.

Race/Ethnicity Gaps Still Very Large

Well, let’s just say One City we ain’t — not, at any rate, from the story the ACS figures tell. For example:

  • The black poverty rate was nearly three times the rate for non-Hispanic whites — 25.7%, as compared to 7.4%.
  • For blacks, the extreme poverty rate was 14.5%, while for non-Hispanic whites only 5.2%.
  • For Hispanics, the poverty rate was 22.1% and the extreme poverty rate 10.2%.

We see similar disparities in median household income.

  • The median income for non-Hispanic white households was a very comfortable $110,619.
  • For black households, the median income was barely more than a third of that — $39,139.
  • Hispanic households did better, on average, with a median income of $51,460.

The white, non-Hispanic household median was notably higher here than the nationwide, by $53,610. The medians for black and Hispanic households were also higher, though by much smaller amounts.

Some Clues to the Poverty Rates

Needless to say (I hope), unemployment and under-employment go far to explaining the persistently high poverty rates in the District.

In 2012, nearly half (48.1%) of poor residents between the ages of 16 and 64 didn’t work at all. An additional 25% worked less than full-time or intermittently.

But that leaves about 8,618 working-age residents who were employed full-time, year round and still not earning enough to lift them out of poverty — or at least, not them and dependent family members.

It’s a fair guess that these are mostly residents who don’t have the formal education credentials that living wage jobs here, as elsewhere, increasingly demand. This is probably also the case for some of the part-time and some-time employed.

What we do know is that the poverty rate for adults 25 years and older who had just a high school diploma or the equivalent was 22.8% last year — and for those with less, 34.5%.

By contrast, the poverty rate for those with at least a four-year college degree was just 5.1%.

What Could Narrow The Gaps?

Well, we won’t solve the unemployment problem overnight.

Even if Congress restored the federal jobs lost to sequestration (highly improbable), the local near-term unemployment rate would probably be somewhere in the neighborhood of 8%, judging from Gray administration estimates.

And it would probably be considerably higher for the least educated residents, if the trends the DC Fiscal Policy Institute reported for 2012 continue.

Getting more residents qualified for high-skill jobs would surely help. But we’d still have a very large low-wage sector — all those hotels, restaurants and other retail businesses.

The brouhaha over the Large Retailers Accountability Act, a.k.a the Walmart bill, has spun off into what seems to be serious consideration of raising the District’s minimum wage — and its tip credit wage too perhaps.

A full-time, year round minimum wage worker currently can’t earn enough to lift a three-person family over the poverty threshold — even if s/he never takes even a few hours of unpaid time off because of illness.

So a reasonably robust, comprehensive increase would be a step in the right direction. Granting tipped workers a right to some paid leave would help too.

Far from a total answer, but things the DC Council could do right now.

* Because the survey sample size for the District is relatively small, the margins of error, i.e., the amounts the reported percents could be too high or too low, are sometimes more than 1%. In the interests of simplicity, I’m reporting the percents as given.

** As the Census Bureau advises, I’m using the results of the Current Population Survey for the national figures. The national ACS figures are somewhat different.

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4 Responses to DC Poverty Rate Ticks Down (Maybe)

  1. […] change year to year in D.C. income and poverty indexes (Poverty & Policy, City […]

  2. Bill says:

    Ms. Baer,

    This is a very helpful piece. Thank you! I am currently working in poverty law, and I’m hoping to be able to use some of the statistics you cite above in speeches. I was unable to find the original ACS table that supports this statement:

    “But that leaves about 8,618 working-age residents who were employed full-time, year round and still not earning enough to lift them out of poverty — or at least, not them and dependent family members.”

    Any chance you could point me in the right direction?

    Many thanks

  3. Kathryn Baer says:

    The table is S1703: Selected Characteristics of People at Specified Levels of Poverty. It provides an estimate for the 16-64 year old population. I used the percent of this population at 100% of poverty that worked full-time, year round and converted it into a number. Hope this helps.

  4. […] not the only one to make the District’s tax code more progressive. And it might reduce the poverty rate […]

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