The nation’s capital: DC now richest metro area

Vishal Ganesan Contributor
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Although the growing “Occupy” movement has clearly set its sights on New York’s financial district, which it sees as a symbol of growing income inequality and the disproportionate political influence of the “1%,” recent Census data suggests that their anger at “the rich” should be directed at the nation’s capital.

Bloomberg News reported yesterday that the DC metro area has edged out San Jose to claim the title of richest metropolitan area in America.

“The U.S. capital has swapped top spots with Silicon Valley, according to recent Census Bureau figures, with the typical household in the Washington metro area earning $84,523 last year,” Bloomberg reports.

While the growth in DC’s wealth is due in part to an influx of high-paid lobbyists and the city’s surfeit of lawyers–Bloomberg News found that one out of every twelve DC residents is an attorney– the report also attributes the rapid increase of median income to  rising federal worker compensation and the increased number of  government contractors in the area– two issues that are particularly contentious since their salaries are paid by taxpayers.

Bloomberg News’ analysis found that “total compensation for federal workers, including health care and other benefits, last year averaged $126,369, compared with $122,697 in 2009.”

And while run-away compensation for federal employees is certainly an issue, a recent study from the Project on Government Oversight (POGO) found that even more taxpayer money is wasted on government contractors.

The POGO report, which was released in early September, found that “since 2000, the amount the federal government spends each year on contracts has increased from $200 billion to well over $500 billion.”

Analysis of contractor compensation also belied the traditional argument used to support the practice, namely that it decreases the size of government by reducing the number of federal employees and paying market rates.

According to POGO’s study, “contractor billing rates were on average 83 percent higher than what the government pays federal employees.”

Contractor compensation is also higher than that of private sector employees who carry out similar work.

“When the average annual contractor billing rates were compared with the average annual full compensation paid to private sector employees in the open market, POGO found that in all occupational classifications studied, the contractor billing rates were, on average, more than twice the costs incurred by private sector employers for the same services.”

While government expansion has provided DC residents a cushion against the recession, Kevin Zeese, director of the Prosperity Agenda, an advocacy group focused on income inequality, told Bloomberg that the city’s increasing wealth reflects a cultural gap between the capital and the rest of the nation.

“There’s a gap that’s isolating Washington from the reality of the rest of the country,” Zeese said. “They just get more and more out of touch.”

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