In­come grows, but not evenly

As me­dian earn­ings in­crease, rich-poor gap per­sists in Md.

Baltimore Sun - - FRONT PAGE - By Sarah Gantz

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.

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