The District has one of the highest levels of income inequality of any major US city, according to a new analysis of Census Bureau data comparing the top 5 percent of earners to the bottom 20 percent across 50 cities. Only Atlanta, Boston, and Miami have greater wealth disparities, a report released today by the DC Fiscal Policy Institute states.
In DC, the average household income for the top 5 percent is nearly 54 times as large as it is for the bottom quintile, the data show. People at the top here earn an average of $531,769 a year in 2012, higher than any other city measured, including New York and Los Angeles. The national average income for the highest-earning 5 percent is $305,552.
Meanwhile the average income for the bottom 20 percent in DC is just $9,877 annually. While that’s roughly even with the national average for the first quintile of workers, the sum covers just 12 percent of the $85,019 that DCFPI estimates is needed per year for a parent with two children to cover the most basic costs of food, housing, transportation, and child care. Only in eight cities does the average income of someone in the bottom 20 percent cover a smaller percentage of a basic family budget, the institute says.
The study gives a lot of credit to the District’s recent economic growth and, unlike many fiscal studies that compare DC to the states, actually weighs it against other cities. But it warns that as much as the city enjoys its current prosperity, it should be taking steps to ease the burden placed on the bottom bracket of earners.
“Income inequality in the District is significantly larger when compared to other cities and has remained that way over the last six years,” the report concludes. “Expanding the supply of affordable housing stock, better access to subsidized health insurance, and other supports for low-income residents will help alleviate the high costs associated with living in a large city and help preserve the economic diversity of DC.”