Bursting the Bubble: Exploring the Disparities in the Economy of the National Capital Region
Previously, we discussed a new report we released along with The Commonwealth Institute and the DC Fiscal Policy Institute that finds that while the economy of the national capital region is growing, wealthier residents are benefiting more than middle- and lower-income people.. Today, we will explore how education, race and geography affect the economic fortunes of Maryland, DC, and Virginia residents.
Not All Parts of the National Capital Region Benefit Equally from a Growing Economy
While overall the national capital region is more prosperous than much of the rest of the U.S., a look below the surface reveals a more complex story, with pockets of economic stagnation and poverty dotting the map. For instance, median household income is up in the District of Columbia since 2007, but it is down in the surrounding areas, especially Calvert County. High average income levels in some parts of the region mask wide economic disparities, with 18 percent of DC residents and 10 percent of Prince Georges and Charles County residents living in poverty. The poverty level in Charles County has doubled since 2007.
The Region’s Economy Favors the Highly Educated
In the wake of the Great Recession, less-educated workers are less likely to have jobs than those with more education. Employment rates are down 9 percent for those without a high school education, and down 3 percent for those with less than a bachelor’s degree. On the other hand, there are over 200,000 more jobs for workers with a college degree than before the recession.
The same disparities can be seen in earnings. Since 2007, the median wage dropped by 5 percent for workers with only a high school diploma and by 13 percent for those without one, while they increased by 9 percent for workers with a bachelor’s degree or higher
The premium put on an education in the capital region can be seen in national data. Inflation-adjusted median wages of workers with only a high school diploma dropped by 80 cents an hour in the region since 2007, compared to a 51-cent drop in the rest of the country. Workers in the capital region with a bachelor’s degree or higher saw their wages increase by $2.78 an hour since 2007, while their counterparts nationally saw their wages actually decline by $1.18 per hour. That means the wage advantage for well-educated workers in the national capital region is more extreme than it is throughout the rest of the country.
The result of these trends is a growing gap in economic opportunity, with income growth concentrated at the top while the middle class is squeezed and low-income families struggle to keep their heads above water. Median wages for workers in the national capital region with a bachelor’s degree are 2.2 times higher than those with only a high school degree, up from 1.9 times in 2007.
National Capital Region’s Economy Also Divided by Race
The wage gap between White workers and Black and Hispanic workers in the national capital region has also widened. Black workers are more likely to be unemployed than white workers even when they have the same level of education. The unemployment rate for Black workers with a bachelor’s degree or higher (6 percent) is three times that of White, non-Hispanic workers with only a high school diploma (2 percent).
We will continue to explore the findings of Bursting the Bubble and what policymakers can do to address these disparities, so check back here for more.
