To see U.S. wealth gap, look no further than Washington

Sat Mar 1, 2014 1:01pm EST
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By Ian Simpson

WASHINGTON (Reuters) - President Barack Obama is making income inequality an issue in midterm elections, and proof of the gap between rich and poor is close at hand right outside the White House.

The booming District of Columbia features the wealthiest high-income strata among big U.S. cities and more poor people than the national average, leading analysts to call it a microcosm of the larger U.S. economy.

Middle-class jobs hollowed out by the 2007-2009 recession have failed to come back. A flood of mostly young, educated newcomers has helped revitalize once-blighted neighborhoods, but is wiping out low-cost housing within sight of the Capitol.

The red-lettered "Come Unto Me" sign on the former Central Union Mission still overlooks 14th Street less than two miles north of the White House.

But construction workers have gutted the onetime shelter for homeless men to convert it into tony shops and boutique condos, part of the makeover of 14th Street in recent years from a rundown retail strip to an urban playground of upscale restaurants, bars and apartments.

"We're a city that has very healthy upper-income residents, and then a very healthy lower-income population, and not a good in-between," said Phil Mendelson, chairman of the city council.

Ed Lazere, executive director of the DC Fiscal Policy Institute, a think tank, said wages were stagnant or falling for the bottom of Washington's workforce and rising for highly educated top earners. That mirrors the U.S. pattern, he said.

"For people who don't have an advanced degree, just the chances of participating in D.C.'s economy are really grim and have only gotten worse over the last 20 years," Lazere said.   Continued...

Pedestrians pass shuttered buildings in Ward 8 of Washington November 20, 2012. REUTERS/Kevin Lamarque