Bursting the Bubble: Like MD, National Capital Region Beset by Inequality

While Maryland and its economy certainly benefit from being part of the national capital region, the greater DC area’s prosperity is not broadly shared. Most of the benefits of the region’s economic growth have flowed to upper-income earners, with others seeing little progress or even decline. The growing inequality is detailed in a new region-wide report – Bursting the Bubble – which we published today along with the Commonwealth Institute, based in Virginia, and the DC Fiscal Policy Institute.

Written in the same vein as our annual State of Working Maryland report, Bursting the Bubble uses census data to look at how different groups and localities are faring economically in the national capital region, which includes Maryland’s Calvert, Charles, Frederick, Montgomery, and Prince George’s counties. 

On the surface, it is easy to find promising trends in the region’s economy. The unemployment rate, for example,  is lower than in the rest of the country, while incomes are higher.

But the benefits of this growth have been concentrated among those who are already well-off, while moderate and low-income residents have experienced stagnation or decline. As the wages of the region’s highest-earning residents grew by an average of $4.11 per hour since 2007, to $43 per hour, workers earning the median wage of $22.07 per hour saw a pay increase of just 16 cents per hour. At the bottom of the income spectrum, where people make less than $11.89 per hour, workers actually saw their hourly wages fall by 71 cents. As a result, low-wage workers make just 16 cents for every dollar that a high-wage worker in the region earns. This is more extreme income inequality than exists in the rest of the country, since nationwide, low-wage workers earn 21 cents for every dollar of income for the highest-wage workers, down from 22 cents in 2007. 

We will explore what accounts for these disparities in future posts that highlight more of the findings in Bursting the Bubble. You can also read the full report here.