Bursting the Bubble: The Challenges of Working and Living in the National Capital Region

Bursting the Bubble ThumbnailLiving in the national capital region looks like it has its advantages. Employment levels are back to where they were before the recession. The unemployment rate is far lower than that of the country as a whole. Incomes are high, especially for highly educated workers. From outside this bubble, things look pretty good.

However, the bubble obscures a troubling story for many residents of the region. Income inequality is growing. Employment levels for people without a college education are far lower than before the recession. Unemployment rates for several groups of workers, including those without a college degree, remain high. Black workers and young workers were particularly hard hit by the recession, even when compared to other area residents with similar education levels. The high cost of living in the region is pushing many families to spend more than they can afford on housing, while others trade more affordable housing for long and expensive commutes.

The region has many successes worth celebrating. But broadly shared prosperity is not one of them. The region’s policymakers need to address the challenges facing those who are struggling to keep their foothold in the economy. This includes ensuring all workers in the region have the skills and credentials needed by employers for current and future jobs, taking steps to make sure all working adults have enough income to support their families, and ensuring availability of affordable housing options with access to good jobs.

In this report, we partnered with the Commonwealth Institute and the DC Fiscal Policy Institute to dig into how workers are faring in the region’s economy.

Key findings include:

  • Less-educated workers are struggling to maintain a foothold in the national capital region’s economy.
    • For workers without a high school diploma, the median wage has fallen 13 percent.
    • Capital area workers with only a high school diploma have seen a larger drop in median wages (81 cents) than their peers in the rest of the country (51 cents).
    • For workers with some college but not a bachelor’s degree, the median wage has fallen 10 percent.
    • For workers without a bachelor’s degree, median wages have dropped 5 percent since the recession, after accounting for inflation
  • Black workers and young workers have been hit harder than others.
    • Black residents without a high school diploma are just over half as likely to be employed as White, non-Hispanic residents with the same level of education.
    • Even highly educated Black workers are three times more likely to be unemployed than their White, non-Hispanic counterparts. The unemployment rate among Black workers in the national capital region with a bachelor’s or advanced is 6 percent, compared to 2 percent for  White, non-Hispanic workers.
    • 1 in 8 workers between 18 and 24 is unemployed; the rate jumps to 1 in 5 if you add young workers in part-time jobs who want work full time or those who have given up looking for work, more than twice the rate for older workers.
  • Income declines and loss of jobs contribute to rising poverty
    • Median household income in the region fell 8.5 percent between 2007 and 2012. Calvert County, Md. (16 percent drop) and Fauquier Co., Va. (11 percent drop) were hardest hit.
    • As income fell, poverty rose
      • The regional child poverty rate jumped to 10.7 percent from 8.2 percent.
      • Poverty is still most prevalent in the District (18%), but it is also high in the Maryland suburbs. In fact, since 2007 the poverty rate in Charles County has doubled to 10 percent.
      • Though the overall poverty rate – 8.4 percent – appears much lower than the rest of the country (15.9 percent), the Supplemental Poverty Measure, which adjusts for the cost of living, pushes it up to 13.4 percent, compared to 15.3 percent nationally.
  • High affluence drives up costs for everyone
    • Despite the relatively strong economy for highly educated workers, more than 25 percent of families in the region don’t make enough to afford basic living expenses.
      • A third of homeowners with a mortgage and half of all renters pay more than what is considered affordable for their housing costs (30 percent or more of their income)
      • In Prince George’s Co., 43 percent of homeowners with a mortgage pay more than 30 percent of their income toward housing.
      • The highest number of these “housing burdened” renters are found in DC, Montgomery Co., MD, Prince George’s Co., and Fairfax Co., VA
    • In Arlington, Alexandria, and Fairfax counties in Virginia, 27 percent of renters pay more than 50 percent of their income toward housing.

Read the press release

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