While the American economy staggers out of recession, a new report shows that there’s at least one boomtown where people are raking in the dough and living large: Washington, D.C.
The Washington metropolitan area is home to the highest paid residents in the nation, according to a new report from the Ontario-based Martin Prosperity Institute.
The first-time study examined 342 metro regions in the United States and found that the D.C. area’s median household income is now higher than $85,000 per year. That’s more than double the median household income of the lowest-income region.
Some say government employees sacrifice big money to enter public service, but data from numerous studies show that federal workers make on average far more than those in the private sector.
A recent USA Today analysis of data from the Bureau of Labor Statistics found that, on average, federal workers earn far more than private-sector employees. According to economist Chris Edwards of the libertarian Cato Institute, compensation for federal workers was double that of those in the private sector in 2008.
On one level, the results of the studies are not too surprising, economists said. The city’s concentration of highly skilled attorneys, contractors, lobbyists, national media figures and experts that make up a government town is unique to the area, and those jobs naturally enjoy a high market value.
“High-income regions tend to have populations that are highly educated and skilled — what economists refer to as higher levels of human capital,” said Richard Florida, director of the Prosperity Institute and coordinator of the study, in an article at the Daily Beast. “Regions with more knowledge-based, professional and creative jobs have higher incomes on average, as do regions with high concentrations of high-tech industries.”
But some find it disconcerting that the Washington area, which does not necessarily create wealth like New York or San Francisco, continues to be the cash capital of the country.
Analysts attribute the boom to an explosion in the number of government jobs over the course of the Bush and Obama presidencies. The number of non-military jobs jumped from about 268,000 a decade ago to 320,000 in 2008, according to the latest numbers from the Bureau of Labor Statistics. So long as government continues to grow while Uncle Sam offers swell compensation packages, D.C. will be sitting pretty for a long time.