Still Much Recession Pain for Area’s Lower Income Homes

While the Northern Virginia regional economy weathered the “Great Recession” of 2007-2010 better than most places in the U.S., there were some shocking disparities that developed that continue to challenge this area, according to a recent report by the Virginia Commonwealth Institute.

“Even the most well-positioned workers in the region are operating under increased pressures brought on by the Great Recession and its lingering effects,” the report, using data from the U.S. Bureau of Labor Statistics, points out.

“Parts of the region have some of the highest incomes in the nation, and the educational attainment rates of the workforce make it one of the most educated regions in the world,” it says, “But a closer look at the dynamics of the Northern Virginia economy shows that not all workers and industries are benefiting from this success.” It says that “conditions have deteriorated for many workers, including cuts in hours, reduced employment opportunities, income losses and rising prices.”

The report does not project forward to anticipate how the regional economy will fare in the coming years, with looming concerns for deep federal defense budget cuts and on-going global financial instability continuing to furrow the brows of analysts and policy makers. It also does not address conditions elsewhere in Virginia, which are uniformly worse for workers and their families than in this region.

But even around here, lower income households have born a considerable, on-going brunt of the Recession. For example, in the well-heeled Arlington County and City of Alexandria, the number of children living below the federal poverty level are 13.9 percent and 13.7 percent, respectively, the highest the region. The statewide average is 14.5 percent.

Median earnings for Northern Virginia workers with less than a high school degree fell 17.5 percent between 2007 and 2010, even while those with graduate or professional degrees fell 3.7 percent.

While employment levels in Northern Virginia grew by 25,000 between 2010 and 2011, a “jobs gap” – the number of jobs needed to return to pre-recession employment levels, taking into account the growing population in the region – remained at over 100,000, and according to the report, “Many of the industries that lost the most jobs during the recession continued to lose jobs beyond the official end of the recession in the summer of 2009.”

The unemployment rate more than doubled during the recession, and due to its large population, Northern Virginia accounts for more than one in four unemployed Virginians, more than any other region in the state.

The median household income of Virginia’s lowest 20 percent of households saw a decline of over 10.5 percent in real terms between 2007 and 2010, while the area’s highest income households saw a decline of just over three percent.

In terms of official poverty, every area locality experienced an uptick during the recession, with the growth ranging from 12 percent in Loudoun County to a whopping 50 percent in neighboring Fauquier County. The overall rate in Alexandria in 2010 was at 9.9 percent.

Supporting a family in Northern Virginia is expensive, the report noted. “For a family of four, a minimal standard of living, without relying on public assistance, required an income of $63,000 in 2010 on average, assuming one preschool-age and one school-age child.

Also, the share of workers in this region with a cost-burdensome travel time of over 60 minutes or more was 14.8 of the total workforce in 2010, compared to under 10 percent statewide and eight percent nationally.

Citing a recent study, the Urban Land Institute’s “Beltway Burden: The Combined Cost of Housing and Transportation in the Greater Washington, D.C. Metropolitan Area,” more than 45 percent of an average household’s income in this area is absorbed by just these two costs alone.

Meanwhile, the demand for Supplemental Nutrition Assistance Program (SNAP) – formerly known as food stamps – increased by 131 percent in the region (compared to 77 percent statewide), with the City of Falls Church being the only locality to experience an actual decrease and Manassas Park increasing by the highest regional rate of 165 percent. In Fairfax County, there are now 46,000 receiving SNAP benefits.

The number of people claiming unemployment benefits in Northern Virginia more than doubled during the recession, and the number using Temporary Assistance for Needy Families (TANF) also rose dramatically by 16 percent in the region, compared to seven percent statewide.

“For substantial segments of the Northern Virginia workforce, the region’s promises of opportunity and wealth are elusive,” the report concludes. “Declining income and rising costs mean that workers and families are having a harder time making ends meet, and these forces hit moderate and low-income Virginians the hardest.”

The Richmond-based Commonwealth Institute for Fiscal Analysis provides information and analysis of state public policies with particular attention to the impacts on low and moderate-income persons.