Less Poverty, Greater Income Inequality in DC

The new year seems a fitting time to check on how the District of Columbia is progressing toward two related goals — reducing poverty and achieving shared prosperity. A true good-news, bad-news story, according to indicators the Half in Ten campaign published last month.

As I’ve written before, Half in Ten created the indicators in 2011, when it restarted the clock on cutting poverty in half in ten years.

They’re organized under four main headings — poverty reduction (of course), good jobs, strong families and communities and economic security.

But they yield a fragmentary picture — in part, because Half in Ten has to use numbers already available for both the U.S. as a whole and states, plus the District. And for other reasons beyond its control, they’re not all current.

I’ve tried in the past to follow Half in Ten’s framework. A different approach this year, based on what I found most striking, especially when I looked back to the original indicator set.

Long story short: The District has a lower poverty rate than in 2010. But shared prosperity still seems a will o’ the wisp.

Poverty Reduction

The District’s poverty rate last year was 0.3% lower than in 2010 — 18.9%, as compared to 19.2%. The new rate is still higher than rates for all but five Deep South and Southwestern states.

The race/ethnicity breakout is one way we see income inequality in the District. For example, as I reported when the figures were released, the 2012 poverty rate for black residents is more than three times the rate for non-Hispanic whites.

Income Inequality

Half in Ten’s indicator is the ratio between the shares of income that went to households in the top and bottom fifths of the income scale last year, according to the American Community Survey. By this measure, income inequality in the District is extraordinarily high — 30.3. It’s far larger than any state’s — and more importantly, larger than in 2010.

But the ratio is, to me, a tad abstract. So let me translate it into actual shares. Of all the household income in the District, the top fifth enjoyed nearly 55.4%. The bottom fifth had to make do with slightly more than 1.8%.

Some Contributing Factors

On the one hand, 70.2% of young adults in the District have at least a two-year college degree — a slight uptick since 2010. As you’d expect, this is far higher than the percent in any state.

On the other hand, only 59% of teens who started high school graduated four years later, as of the 2011-12 school year. This is a slightly lower percent than the rate for the prior school year — and the lowest reported for 2011-12.

Not surprisingly, the District has a relatively high percent of “disconnected” youth, i.e., 16-24 year olds who were neither working nor in school in 2012. This latest “disconnected” rate — 17% — is exactly the same as in 2010, which again puts the District roughly mid-way in the state rankings.

No such flat-lining for the unemployment rate, which declined from 9.9% in 2010 to 8.3% last year. Pretty obvious who’s getting the jobs — and not — in our burgeoning local economy.

On the upside, the teen birthrate declined quite a lot. In 2012, there were 38.6 births for every 1,000 women between the ages of 15 and 19. This is 6.8 fewer than in 2010. And though still high, it’s nowhere near rates in the bottom-ranked states.

Teen birthrates are often correlated to poverty — as cause, effect or some combination of both. Recent research suggests that income inequality is an additional factor because poor young women see little chance of improving their economic situation if they postpone motherhood.

The percent of children in foster care also has bearing on the poverty rate — again, as cause, effect or both. It’s still high in the District — 11 children per 1,000, as of 2012. But it was 20 per 1,000 in 2010.

Further Progress Possible

Some state and local governments are adopting policies that can reduce poverty and enable low-income people to gain a greater share of prosperity, as the report that includes and provides context for the indicators selectively shows.

Here in the District, for example, the minimum wage will step up to $11.50 in July 2016 — $4.25 more than the federal minimum. Ten states also raised their minimum wage last year, making 29 that now have minimums above the federal.

Proposals to raise the federal minimum have gone nowhere in Congress — and most surely won’t during the next two years. The same seems likely for other legislation that would boost low incomes and strengthen both work supports and safety net programs for people who can’t earn enough to meet basic needs.

So, as the report concludes, “the momentum for national change” of a progressive sort has to build at state and local levels. A call to action for advocates and grassroots organizers.

And, I suppose, a hopeful note to end on, since it implies that we’ll have a renewed federal commitment to reducing poverty and income inequality sooner or later. But in the meantime, we’ll have inequities at least as large as those we have now based on where people live.

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