What DC's Wealth Doesn't Tell Us About American Politics

A blog about business and economics.
May 29 2012 12:25 PM

What DC's Wealth Doesn't Tell Us About American Politics

The Washington, DC metropolitan area has a very high average income. Every once in a while someone discovers some new way to write that fact up. Sometimes it involves pointing out that a large number of the highest average income counties in the United States are in the DC area. More recently Time wrote it up in narrative form by talking about how there are a lot of businesses in DC that cater to young people with high disposable incomes. Almost invariably when someone brings this up, they're attempting to use it as synedoche to explain some horrible trend in American public life. Since Barack Obama's been president, I've normally seen it brought up by conservatives arguing that big government is running amok. When George W Bush was in office, it was normally brought up by liberals arguing that war spending and/or private contracting was running amok.

In reality, I think it tells us basically nothing about American politics.

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What it tells us instead is a story about how averages work. The DC metro area is rich on average for the same reason that all the other rich metro areas in America are rich on average—a high share of the population has college degrees. If a bunch of working class people relocated here from Chicago and Philadelphia, holding everything about federal politics constant, then DC's average income would drop even those those specific people would see their nominal incomes go up. So why don't they move here? For the same reason they don't move to other high income cities—San Francisco, San Jose, Seattle, Boston, etc.—the cost of living is too high. Why is the cost of living so high? For the same reason it's high in those other cities—restrictive zoning policies.

So if you feel uncomfortable with the idea that the metropolitan area containing the nation's capital has the highest average income in the country, what you ought to do is petition the governments of Fairfax and Montgomery Counties, the city of Alexandra, and to a lesser extent DC proper and Arlington County to make their zoning codes friendlier to high density residential development and moderate income housing.

Now it may separately be true that there's some bad aspect of the American political system that's leading an excessively large share of America's college graduates to be working in sectors related to public policy. But whether or not that's the case actually has very little to do with average incomes in the DC area. To take an obvious example, there are plenty of rich people in Los Angeles. Average incomes in LA aren't lower than average incomes in DC because the government is more lucrative than Hollywood. Average incomes in LA are lower than average incomes in DC because lots of relatively low-skill low-wage workers also live in the Los Angeles area. But if you zoom in on Beverly Hills or Santa Monica where there's no housing for low-income workers, average incomes are sky-high.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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