Income grows, but not evenly
As median earnings increase, rich-poor gap persists in Md.
Despite having the nation’s highest median household income and among its lowest poverty rates last year, economists warned that new data from the Census Bureau continue to show a worrying economic divide in Maryland.
Maryland’s median household income reached $75,847 last year, up 2.4 percent from 2014. At the same time, the state’s poverty rate declined statewide to 9.7 percent, with about 570,776 people living in poverty, according to results from the Census Bureau’s American Community Survey released Thursday.
The survey, conducted annually, shows that Maryland’s economy is growing, more people are working and their wages are rising, economists said.
But they also cautioned Thursday that beneath the encouraging numbers, many Marylanders continue to struggle to make ends meet as the state falls short of its growth potential. The state’s income growth also lagged behind the nation’s as the survey found median household income grew 3.8 percent nationwide to $55,775.
“This year’s figures show a little improvement in the middle class, but there’s still a lot of people stuck at the bottom, working very hard to pay the bills and unable to achieve financial stability for their families,” said Benjamin Orr, executive director of the Maryland Center on Economic Policy.
Not all families felt the strength of Maryland’s economy, and to demonstrate the divide, Laura Speer, associate director of the Annie E. Casey Foundation, pointed to the vast difference in poverty between Baltimore and elsewhere in the state.
The Baltimore area, which includes Columbia and Towson, had a poverty rate of
10.6 percent, or about 288,786 people, last year. But in the city alone, without its more affluent neighbors, 22.9 percent of people were living below the poverty line, which is about $24,000 a year for a family of four.
Nearly 35 percent of children in Baltimore were living in poverty — a drastic difference from the state’s 13.2 percent child poverty rate.
“Depending on where you live and who you are and where you grew up — it can makeabig difference in whether your family has enough money to get by,” Speer said.
Median household income also varied widely across the state. Households in Howard County, the wealthiest county in the state, earned a median of $110,892 last year, more than 21⁄ times the $44,165 of the median Baltimore household.
The median is the midpoint in a range of numbers, with half higher and half lower, and is considered a better measure than the average, which can be skewed by higher values.
Household income, even within a single city or county, varies widely, depending on whether it is brought in by a two-parent family, a single-parent household, and whether the single parent is male or female. While one family’s income may account for a single breadwinner’s pay, others may be working multiple jobs.
“What’s occurring is families — middleclass families — need to struggle even harder just to stand still,” said former Gov. Parris N. Glendening, who is president of Smart Growth America’s Leadership Institute. “They’re working additional jobs, they’re working additional hours, going further into debt. There’s a lot of good news here, but also a reason for real concern.”
Glendening, who works with state and local governments to address inequality, said he sees the nation’s growing wealth disparity reflected in Maryland.
These disparities are often masked by Maryland’s large middle class, which is supported by a high concentration of federal workers, said Anirban Basu, an economist and the CEO of Sage Policy Group in Baltimore.
“I think that in fact there are two Marylands,” he said. “If you stripped out the federal government’s role in Maryland’s economy, the gap between the haves and the have-nots would be chasms.”
Federal workers, and their meager raises, likely contributed to Maryland’s slower median household income growth rate, Basu said. Maryland household incomes should keep pace better with national gains, he said.
Maryland has among the most skilled and highly educated workforces in the country, and spends more per capita on research and development than most other states. These factors, plus the state’s high income and low poverty levels, should point to an economy growing much faster than Maryland’s is, Basu said.
Commercializing research, largely concentrated at universities and government agencies in Maryland, would help Maryland create more high-paying jobs, attract new businesses and expand the economy, he said. But despite the billions of dollars spent on research and development here, the vast majority of venture capital goes to companies in Silicon Valley, New York and Boston.
“In a world in which much of the wealth being created takes the form of ideas, one would expect to see a Maryland on the vanguard of growth in America — and that’s not what we see, at least in the American Community Survey data,” Basu said.