Washington Is America's Worst Economic Mirror. Its Best? Detroit.
When it comes to who falls where on the income ladder, the Motor City hews best to the national average.
Detroit is the poster child for an economy gone wrong, while Washington is in the midst of a development boom.
But it's Detroit, not Washington, that most accurately reflects the paychecks of Americans overall—at least by one measure of how the city's population stacks up on the economic ladder.
Nearly a quarter of Washington households (24.5 percent) take home $150,000 or more annually. Nationwide, only 9.1 percent of households hit that income threshold, according to an analysis of 2012 census data conducted by WalletHub.
And when compared with the national average, a relatively slim sliver of Washington households fall at the low end of the income spectrum. Only 11.7 percent of households in the District earn less than $25,000 annually. Nationally, 24.1 percent of households fall below that line.
Indeed, out of the 366 cities WalletHub included in its report, Washington ranked dead last in similarity to distribution nationwide.
Detroit, on the other hand, was most similar. A scant 8.3 percent of the city's households take in $150,000 or more annually, about 1 percent fewer than the national average. And in Detroit, slightly more than a quarter of households make do with less than $25,000 in annual income (again, compared with 24.1 percent nationally).
A major caveat: The study does not take into account varying costs of living from one city to the next. An annual salary of $25,000 in Washington won't take you as far as it would in Detroit (or nearly anywhere else), so it's likely some D.C. households bringing in more than that still have to hustle harder to make ends meet than households elsewhere taking in less. And when other metrics are applied, Detroit's mirror status starts to crack. The city's poverty rate, for example, is much higher than the national average.
So what should we take away from this?
First, if politicians are looking for a sense of how most Americans are living, Washington is the wrong place to find it. The relative preponderance of wealthy households could lead one to believe that a larger swath of Americans are cashing in big on the modern economy. Perhaps more distressing, the relative dearth of D.C. households at the bottom of the income scale would make it frighteningly easy to forget how many people are making do with so little.
And second, in a recession, it's good to live in a city whose biggest employer has access to unlimited cash. When private companies run short, they generally cut payroll by laying off employees. But when the federal government experiences a budget shortfall, it generally borrows more money and makes payroll. That spared Washington the worst of the recession in 2008 and 2009. And while the sequester has peeled back some of the funding that flows to Washington residents from federal coffers, that pain has been a pinprick when compared with the post-crash layoffs elsewhere.