State Economy | Introduction
Washington’s low- and middle-income families never fully recovered from the last recession, and are ill-prepared to weather the brewing economic storm.
Most families were losing ground even when the economy was growing. Income inequality in Washington State grew significantly during the most recent period of economic growth. The highest income families saw their average income grow by nearly 12 % since the late 1990s, while incomes stagnated for those at the middle and bottom of the income scale, after adjusting for inflation.
Census data shows Washington is one of 37 states where family incomes of the top fifth grew significantly faster than the incomes of the bottom fifth between the late 1980s and now. In marked contrast, between World War II and the 1970s, the benefits of economic growth were broadly shared by families at every income level.
State leaders have policy options that can lessen the gap and help struggling families. Washington has been a leader in some areas such as our minimum wage law. But we’ve fallen behind on others, like tax policy and unemployment insurance.
Low and moderate wage earners in Washington pay a far higher percentage of their income in state and federal taxes than those in high income brackets. And while 50% of Washington workers qualified for Unemployment Insurance benefits in the last recession, only about one-third will qualify today due to eligibility rule changes put in place by the Legislature.
Washington has a long history of public policy that promotes high-road development. While the economy may do better here than in the United States as a whole, there still remains a great deal of work to do in building a state economy where economic security and opportunity are available to all.