Greater Washington, D.C. is the nation’s metropolitan region with the highest income, according to University of Toronto’s Martin Prosperity Institute. The index measures income trends across all 342 of America’s metro regions. No wonder also that Loudoun County, a DC suburb is number 1 on the Nation’s list with $110,000 median income. No surprise is either that 9 out of 10 highest income counties in the United States are centered around the financial capitol of New York and the Political Capitol of Washington DC. http://factoidz.com/10-highest-income-counties-in-the-united-states/. You would think that this open fact would have alarmed some Americans in their belief systems that their financial and political leaders have their best at heart?
The gap separating the regions with the highest and lowest incomes is substantial. With a median household income of more than $85,000, and median individual income and per capita income levels in excess of $40,000, Greater Washington’s income levels are more than double those of America’s lowest income metros. The flip side of this growing income inequality is a deepening economic geography of wealth and class, which is dividing the Nation.
And guess what else? These numbers reflect a 2008 situation, so it can not be politically attached to one or the other political affiliation, but is more or less the result of a growing trend toward a state controlled society. Personally I think it is scary if the one district in the nation that does not manufacture anything, pays the highest salaries. In a normal economy, micro or macro, the bookkeeper/administrator is part of the expense, while the salesman gets the bonus. The more sales, the better the income.
Duval County Teachers Union
Last night on the 11 o’clock news there was smugness on the TV reporter’s face, when he announced that the Jacksonville/Duval County schoolboard had decided to allow NO salary increases this year for the county’s teachers and the Teacher Union’s reaction came swiftly: We consider that breech of contract!
It seems that a lot of people are still floating on the idea that we are coming out of a normal recession and are now growing back into a solid economy where salary demands are part of the economic process, just like all those times after recessions since World War II.
Why we’re not near any solid recovery.
Well, it took some patience but it looks like the economic environment I was depicting two years ago, just shortly after launching SearchAmelia is starting to play out. Right now at 12:11pm I check my Mac dashboard for stockmarket updates and see that across the board we are witnessing a stark drop. The DOW is 221 points down since this morning. And this up and down is just another indicator for me that deflation risks are prevailing and a growing acknowledgment over the lack of sustainability regarding the nascent economic recovery, is overwhelming the investors’ economic frame of reference. Extreme fragility and volatility is what one should expect in a post-bubble credit collapse and asset inflation that we endured back in 2008 and part of 2009.
Ben Bernanke showed restraint from his usual optimism
A press release yesterday from our Fed Chairman Ben Bernanke admitted that: “Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit……the pace of economic recovery is likely to be more modest in the near term than had been anticipated so far.”
Yet this morning I receive the results of a Wall Street research (or what passes for that) laying claim that the expansion in real GDP from the lows of mid-2009 exceeded what we saw in the recoveries of 2002 and again in 1991-92. Well I just don’t know where to start anymore when it comes to attacking this thought process. Hence the Market reaction with a 221 point drop. Investors don’t buy it anymore, because the fundamental of recovery have not been applied.
Not that I think the facts are wrong, but the context is way off base and the interpretation is downright wishful thinking.
The economy nosedived in the 2008 downturn and the newly revised peak-to-trough decline in GDP is now estimated at 4.1% — the steepest contraction since the 1930s. Given the extent of the decline, we should have seen a much greater “rubber-ball bounce” but we didn’t — and the amount of policy stimulus a decade ago and two decades ago, absolutely pales next to the massive doses of fiscal and monetary relief dished out this time around.
In a Normal Recession…
By now, if this were a normal recession followed by a normal recovery, as opposed to a debt-deleveraging-depression, real GDP would already be back at a new high. But here we are, 31 months after the recession began, and the level of real GDP is still -1.1% below its prior high.
There are three other critical factors that scream very slow recovery.
First, despite the dramatic rebound in the equity market in 2009, personal income fell in 49 of the 52 U.S. cities of a million population or more.
And guess what; the three cities that saw an increase were closely tied to the federal government (like Washington D.C.). Indeed, government pay managed to rise 2.6% last year while all the suckers that work in the private sector posted a 6% wage decline.
Honestly if this doesn’t breed dissent, I don’t know what does.
Second, the rapid decline in the employment-to-population ratio. This is a far more informative measure regarding labor market performance than the traditional unemployment rate, especially at a time when discouraged workers are withdrawing from the labor force at such an alarming clip.
Third, we have mentioned it before – again and again. A jobless recovery means that by now this country runs about a 12 million job deficit – jobs that will not return. Never. We have also seen that college degrees are now watering down to real levels of expectation. A College Degree is no job guarantee. At best it is a chance to a corporate internship, that upon successful conclusion may lead to a job.
I hope that the Teacher’s Union in Jacksonville understands what this means in the real world where the trickle down effect to public school levels is just one degree removed from the reality of unemployment. Even in a country where education has lost a lot of its pretense, it is in the end a closing item in the budget called survival, constantly competing with better, faster and more practical delivery systems, such as the internet.
Other high earning cities
As for the twenty highest earning cities in the Nation, Washington is followed by IT city San Jose in California and Educational center Stamford in Connecticut. Other cities on the list that are income defined by either climate, type of industry(export) or tradition (New York) are Seattle, Boulder, Minneapolis-St. Paul, and Greater Baltimore. Two Alaska regions score in the top 20—Anchorage in seventh place and Fairbanks in 19th. Massachusetts and Minnesota each have two regions in the top 20 as well.
Not surprisingly many of these high-income metros also have high costs of living. Housing costs in Washington, San Francisco, Boston, Silicon Valley, Greater New York, Boulder, and Honolulu are among the highest in the nation; their housing cost-to-income ratios are dauntingly steep.