The New York Times
By: Sabrina Tavernise & Robert Gebeloff
December 17, 2010
WASHINGTON -- As incomes fell across America over the past decade, new census data show that one place registered a remarkable rise: the nation's capital.
Washington, long a symbol of the country's urban ills, is now among the national leaders in income growth. It ranks first among states with gains in median household income and third among the country's 100 biggest cities, surpassed only by Atlanta, and Arlington, Va., an affluent enclave.
There are more people in the city with graduate degrees than with just a high school diploma, and its share of graduate degree holders increased faster than in any other major city. The number of households earning more than $100,000 grew four times faster than overall population in the same period.
Though the federal government has always been a stable source of jobs here, the data show that the private sector -- including consultancies, contractors and lobbying and legal firms -- created most of the new jobs. Workers who identified themselves as managers and professionals jumped by nearly a third over the decade.
The economic boom did not lift everybody. About a third of the census tracts, areas of between 3,000 and 5,000 residents, registered income declines during the decade, including many that were already poor to begin with.
Unemployment for residents with only a high school diploma more than doubled over the decade to 19 percent in 2009, the highest in 30 years, according to the D.C. Fiscal Policy Institute, an economic research group.
The decade also brought black employment to a grim low: By 2009, only 49 percent of black adults in the city were employed, down from 56 percent in 2000, according to the institute. That was down from 62 percent in 1988. The figure includes the elderly, so full employment would be around 80 percent.
"It's the classic story of a rising tide that is not lifting all boats," said Ed Lazere, policy director at the institute. "There are a lot of residents not able to connect with the city's economic engine. And the city's becoming more expensive around them."
The changes have aggravated the widespread disparities in a city that is both the American seat of power and home to some of its poorest neighborhoods. Among the nation's 100 most populous cities, Washington ranked seventh in income inequality in 2009, according to the Census Bureau.
The influx of affluent new residents has resulted in a sweeping pattern of gentrification of poor neighborhoods by a well-educated, mostly white class that fled cities en masse decades ago.
Over all, the city's white population is up by a quarter, while its black population declined by 7 percent. It was second only to Atlanta in terms of increase in the share of its white population over the last decade.
Similar transformations are happening in other major cities, but few with the pace of the capital's. One area in the city with a sharp influx of whites was around U and 14th Streets, a stretch of blocks that are important for African-American heritage. Duke Ellington's childhood home was nearby, as was the first luxury hotel for African-Americans.
In one tract in the area, the white population jumped by 1,500, while the black population stayed the same, according to census estimates. The bureau also estimated the tract's median household income rose nearly 80 percent, with the number of households earning at least $100,000 jumping from 250 to more than 900. Another tract a few blocks south and east had the city's largest gain of whites -- 794. It lost 350 blacks in the same period.
The decade brought change. First a Whole Foods moved in on P and 14th Streets. Then Starbucks. Today wine bars and fancy restaurants pulse with people, and glittering home furnishings stores replaced scruffy second-hand stores on 14th Street. Whole Foods now looks out onto a running-clothes shop, a designer eyeglasses store called Blink, and a gelateria.
"This used to be all black here," said Tom Fouche, 47, who lives at the Central Union Mission, a well-known homeless shelter on 14th Street. "Now I call it upper Georgetown," he said, referring to an affluent, largely white neighborhood to the west. "It's more preppy with more stuff to do."
U Street's urban feel is its principal draw for many young people who have moved to Washington. John Grainger, a scientist from Britain, chose to live in the U Street neighborhood, instead of near his work at the National Institute for Health in Bethesda, Md., because, at 29, he wanted to experience the city.
"It's great," said Mr. Grainger, holding a container with his dinner at the Whole Foods salad bar. "It's easier to socialize, and there's lots to do."
But the development has come at a cost. Prices around the city are rising, making life for Mr. Fouche, who used to work finishing floors, more complicated.
"I'm broke," he said. "Prices are so high. I have to eat."
Mr. Fouche applied for many jobs recently, at Target, Safeway, Giant and Home Depot, but none of them called back. A cleaning company told him he was hired, but the contract was canceled a few days later.
His frustrations point to another effect of gentrification. With highly educated people flooding into the city -- the rise in the number of graduate degree holders outstripped the rate for new high school graduates by a factor of 10 in the decade -- less educated people are being displaced even from unskilled jobs, in a phenomenon Mr. Lazere calls the gentrification of the labor market.
Michael Beirne, 23, who graduated from the University of California, Santa Cruz with a music and math major, now works scooping gelato in the shop across from Whole Foods. A job in music, he said, would require practicing 10 hours a day, and a job in math would require a doctorate.
"I was lucky to find this," he said, standing in the shop on a frigid Thursday.
But the city is still a draw. Dukes Wooters, 28, moved to Washington from New York after losing his job at an insurance company that was associated with Lehman Brothers. He worked for a while as an intern for a congressman, but pays the bills with a job at a sportswear store. His dream, he said, is politics. And he is not leaving anytime soon.
"I don't want to move," he said. "I've lived in a lot of cities in the Northeast. But this is the first city where I could see myself staying."
Sabrina Tavernise reported from Washington, and Robert Gebeloff from New York.