Washington’s productivity up – but so is income inequality

September 17, 2008 | Aaron Keating

Washington’s economic experience mirrors that of most of the country in the growth of inequality over the last economic expansion.

Over the past decade, the wealthiest households have enjoyed rising incomes, while moderate- and low-income families have barely kept pace with inflation or lost ground. Job growth has been strong in some high-income fields, and workplace productivity has risen considerably across industries and income levels as workers are producing more in fewer hours of work.

But the benefits of those gains have gone largely to a few at the top, rather than being spread among all those who contributed to it. The top fifth of families in Washington saw real gains in income of 41% between 1980 and the mid-2000s, and of 12% from the late 1990s to the mid-2000s. In contrast, those in the middle gained just 12% over the entire period since 1980, and families in the bottom fifth gained even less.

Across the state, median married-couple families had enough income in 2007 to meet a basic family budget. However, in every county median female-headed families had incomes above the poverty level but well below the level necessary to support two children without relying on public assistance. Now not only is inflation generally on the rise, but it is hitting household essentials and the Puget Sound metropolitan area the hardest.

While only one in four Washington residents live in households with incomes below twice the poverty level, compared to 30.5% nationally, Current Population Survey (CPS) measures of poverty began to show an uptick in child poverty in Washington in 2007 – well before the national slide in jobs began. In Washington, 11.6% of children were poor in 2007 and 18% nationwide, according to CPS data.

More on the state of Washington’s economy, including county- and metro-level “economic snapshots” is available in EOI’s latest report, The State of Working Washington 2008.

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