Preliminary Notes on Inequality and Urbanism, Paul Krugman, The Conscience of a Liberal, New York Times, May 27, 2015

Nobel Laureate economist Paul Krugman, now of Oxford University, offers some preliminary thoughts on inequality-driven urbanism and its implications.  While he focuses on the implications for people moving into booming urban areas, it seems the same could be said of neighborhoods and larger areas becoming urban.  His thoughts raise interesting questions about the urbanizing of Reston, Tysons, and other areas in the Metropolitan Washington area. 

Here is how he begins:

Tim Wu has an interesting piece about the phenomenon of vacant storefronts in booming New York neighborhoods, which by coincidence dovetails with a number of conversations I’ve been having here at the Said Business School in Oxford, where several people are interested in the changing economic geography of London and its links to globalization.

The empty-store phenomenon is interesting, and cries out for a bit of modeling, which I won’t do right now. But it’s part of a broader story of big money moving in to desirable neighborhoods, and in the process destroying what makes them desirable. (Emphasis added.)  And this in turn has me thinking, blurrily — this is just a start — about the relationship between inequality and urbanism. Not as a diatribe — I think it’s a fairly complex issue — but just as an interesting thing, especially if you’re in the process of moving into a big city.

Some thoughts . . .

Click here to read the particulars.

Like Fairfax County, GMU reports median household income down around the Metro DC area since 2009

Last week, we published an article showing that the Fairfax County real median household income has stagnated, if not declined slightly, in recent years and looked how it might change in the future.   Now we learn from GMU Center for Regional Analysis that the decline we reported from 2008 in Fairfax has been pretty much the same across the metropolitan Washington area.  Here's how GMU CRA starts its short report:

Between 2009 and 2013, the median household income in the Washington Metropolitan Area (WMA) decreased after adjusting for inflation, to $90,149 from $92,436, a 2.5 percent decline. This was primarily driven by a decrease in earnings from employment, which is the largest component of household income. In 2013, the median annual earnings level for WMA resident workers was $49,810, which was $2,130 below the 2009 level of $51,940, representing a 4.1 percent decrease. This decline resulted from several factors, including: an increased share of part-time workers, growth in lower-wage industries, and a decrease in median earnings in ten of the 16 industry groups in the region.

This graphic from the GMU CRA report shows that, in fact, workers in most industries, including the three industries with the largest increase in employment  (leisure & hospitality, health services, and retail trade), saw a decrease in their real income:

Click here to read the full 10-page paper.  

UPDATE:  In addition to this analysis, GMU CRA also has recently documented that the decline in the Washington area's per capita income was the third worst among the nation's major metropolitan areas. 

While GMU CRA does not venture to forecast how these trends might look in the future, it suggests a shift in regional (and probably Fairfax County) employment we had not considered in our earlier paper that will likely further aggravate the downward trend in area real household incomes.