Are you rich?
If you live in Seattle, there’s a good chance you are freshly minted New Money. A report by the Brookings Institution found that the incomes of Seattle’s top earners grew faster than in any other of the 50 largest cities in the United States.
Household income in Seattle among the top 5 percent grew by 15 percent, about $36,000, making those household incomes rise form about $241,944 in 2012 to $278,084 in 2013. The data examines the years between 2012-13 (the last available Census data, according to Brookings) and is adjusted for inflation.
The report also looked at the bottom 20 percent of earners, and found that their income only rose about 1.1 percent during the same time period. That translates to $300, taking them from a whopping $26,400 to $26,700.
So much for trickle-down economics. Seattle didn’t do so hot here, ranking only 32nd among cities on growth on the lower end. Seattle also ranks 18th among cities in income inequality.
The idea that “the more income people make at the top, the more those households have to spend on restaurants, dry cleaners, maid service, child care — all the things that employ lower-wage workers and that can help boost their incomes,” Alan Berube, a senior fellow and deputy director of the Brookings Metropolitan Policy Program and one of the study’s authors, told the Seattle Times. “At least in the year we’re looking at, that didn’t seem to hold.”
Of course, there are a multiple factors at play here, including this significant fact: Most low-income folks are moving out of Seattle into the suburbs because they can’t afford to live in the city any longer.
Our Silicon Valley fed neighbor to the south, San Francisco, had the most dramatic growth and gap. The 95th percentile’s average income rose 18 percent, about $66,000, “the trend is consistent with anecdotal evidence on growing concentrations of very-high-paying jobs and households in that city,” according to the report.
“San Francisco also stands apart from the pack in just how rich its richest households were in 2013. They earned at least $423,000, more than $100,000 clear of their counterparts in San Jose.”
Seattle has another significant factor coming into play soon: Our $15 minimum wage to be in full effect by 2017. Forbes and the the Seattle Times went back and forth on this this week as well. The jury is still out on how this will affect our overall economy and employment rate, but at least it’s getting the conversation rolling on compensating our working classes better.
All told, these massive year-over-year increases are a sign of the disturbing trend of the increasing wage gap between the haves and have nots — and the disappearing middle class — you know folks who make decent wages, but are nowhere near the $200K+ mark. The study found that nationwide, the 95th percentile earned 11.6 times as much as households in the lower 20, and continues to grow.