Economic scales tip out of balance

Vancouver is experiencing a “renaissance of economic prosperity,” Mayor Tim Leavitt said during his State of the City address late last month.

The big announcement was that another slice of Silicon Valley’s high-tech wealth plans to move to Vancouver. RealWear, a company making head-mounted tablets, signed a letter of intent with Fort Vancouver National Trust to open offices in the renovated Artillery Barracks.

“The work we’ve done over the past decade has positioned our city well for future growth and development,” Leavitt said.

However, he acknowledged, work remains on addressing homelessness and affordable housing. A few days prior, The Council for the Homeless announced that street homelessness was up 18 percent from last year. At a Vancouver City Council meeting, people hotly debated how to deal with the blight of homelessness downtown. (Vancouver has not yet seen benefits from a 2016 voter-approved levy intended to generate more affordable housing.)

Vancouver, and Clark County at large, are experiencing extremes that can be measured in the widening gap between rich and poor. Celebrations around an influx of high-wage jobs contend simultaneously with tensions around homelessness, housing affordability and poverty.

“The income has gotten more unequal in Clark County in the last eight or nine years,” said Scott Bailey, regional economist with Washington’s Employment Security Department.

Bailey analyzed Census data by running the bureau’s numbers through an inflation calculator to see how changes in income are impacted by the increasing costs of things.

He found that the top 5 percent in Clark County saw their incomes increase 12.6 percent between 2006 and 2015. Meanwhile, incomes for the bottom 20 percent increased 0.4 percent — or about $65 over 10 years when adjusted for inflation.

Growing gap

Clark County is not exempt from the nationwide widening of income distribution. For top earners in the U.S., incomes grew 8.9 percent between 2006 and 2015 while the incomes of the bottom 20 percent declined 3.9 percent.

What’s happening within the county is starker than what’s unfolding statewide. In Washington, the top 5 percent saw incomes increase 10.5 percent between 2006 and 2015 while the bottom saw incomes increase 1.7 percent.

Clark County, and Washington as a whole, are quickly becoming more top heavy, meaning that more income is going to the top earners. In Clark County, the top 20 percent takes in 46.26 percent of all household income.

It may not be surprising given the large companies giving out large paychecks that call this state home. Nine Washington residents made the Forbes 400 last year — a list of the 400 richest Americans. The top two slots went to Bill Gates of Microsoft and Jeff Bezos of Amazon.com, both Washingtonians. Camas’ own Ken Fisher, the founder of money management firm Fisher Investments, is on the list at No. 184. His wealth has more than doubled since September 2012, according to Forbes, which estimates he’s worth $3.6 billion.

Clark County’s income growth at the upper end has been thanks to companies like Fisher Investments that have moved or expanded to the area in recent years, bringing high-paying jobs with them.

In 2010, 9.9 percent of all full-time, year-round workers in Clark County earned at least $100,000 annually. Five years later, that increased to 13 percent of all workers. The most job growth has been among positions paying at least $54 hourly, professional jobs that typically require at least a bachelor’s degree, if not more education.

Seeing lots of growth in the number of high-paying jobs is a good thing, Bailey said. However, lower-wage workers haven’t really seen wage increases.

So far, increasing the minimum wage statewide has had little upward pressure on wages, Bailey said. The most common hourly wage range for full-time equivalent jobs is $12 to $18. But, Bailey said, there may be more upward pressure with each incremental increase in the minimum wage, which currently stands at $11 hourly. The mixture of wages could continue changing over time.

Generally, wages have tapered off since the late 1970s, despite increased work productivity.

Changes in income don’t completely encapsulate the divide between rich and poor. For many people, wages are the primary source of income. Upper-income households not only have wages, but they have income through stocks, bonds and rental properties that allow them to build wealth over time.

“That’s been the story for decades now,” Bailey said. “We know that investment income is highly skewed toward the top.”

Local and regional wealth is difficult to measure. The Census Bureau measures income, but not the value of all these other assets households may have. National data from the Federal Reserve shows that the top 10 percent captured 75 percent of all the wealth in 2010. Average net worth declined among all U.S. families between 2001 and 2010, except for those in the top 10 percent. Their net worth increased nearly 10 percent, according to the Federal Reserve.

On the streets

The Council for the Homeless recently released its findings from the annual point-in-time count, a single-day census of the homeless population taken at the end of January. Volunteers and caseworkers counted 269 unsheltered people in Clark County this year, an 18 percent increase from last year.

It’s difficult to better one’s financial situation while homeless, said Andy Silver, the agency’s executive director.

“If rents went up by 50 percent the same time as everyone made twice as much money, it wouldn’t be a problem. But that hasn’t been the case,” he said.

Monthly rent for a two-bedroom apartment in Clark County has increased 37 percent since 2005, while incomes among renters increased about 11 percent at the same time, according to an analysis of Census data. Eighteen percent of people who tried to access countywide housing programs over the last year were able to get in.

Rising housing costs have shifted the limits of what’s a liveable salary in Clark County. With rent taking up a bigger chunk of the paycheck, it’s difficult to save or to build wealth, Silver said.

It’s also changed what it means to be poor or low-income.

The National Low Income Housing Coalition found that Washington had the 10th highest housing wage last year. That is the hourly wage a family needs to afford an apartment without spending more than 30 percent of its income on rent. Those who spend more are considered cost-burdened by their housing, and may not have enough money to cover other living expenses or emergencies.

In 2016, the housing wage for Clark County was $17.04 per hour for a studio apartment, $19.63 for a one-bedroom and $23.23 for a two-bedroom apartment, based on full-time employment. More than half of Clark County’s renters are cost-burdened.

While many homeless people don’t have any income, or perhaps have unearned income such as Social Security or other payments, there are also working homeless.

“We see people who are homeless at higher incomes than we have in the past,” Silver said. “The high-end range of how much you can make and still be homeless goes up and up and up.”

It used to be that everyone seeking services from the Council for the Homeless earned less than 30 percent of the area median income. Perhaps little more than $24,000 for a family of four. Now, the agency sees more people earning 50 percent of the median income or even more than that.

Silver said his agency has served households making $40,000 or so annually that are homeless.

A bigger problem

Though income inequality is growing in Clark County, there are areas of Washington that are worse.

“Clark tends to be in the middle compared to the state and nation,” Bailey said.

San Juan County — encompassing picturesque islands in the Salish Sea — is the most unequal county in Washington and the 10th most unequal county in the entire country, according to the Economic Policy Institute. The average annual income of the top 1 percent there is $3.1 million, while the bottom 99 percent averages $44,728. That means the top makes 68.7 times more than everybody else. Yakima, too, is an unequal area, the institute found; the top 1 percent earn $937,474 on average while the rest average $36,079 in earnings.

The Bend-Redmond, Ore., area is the fourth fastest-growing metro area in the U.S., and it’s the most unequal metro area in Oregon. There, the Economic Policy Institute said, the top 1 percent makes $948,660, 21.5 times more than the bottom 99 percent average of $44,106.

Compare that to the Portland-Vancouver-Hillsboro, Ore., metro area. Here, the top 1 percent earns $897,681 while the bottom 99 percent averages $49,156, according to the Economic Policy Institute. This area ranked as the 221st most unequal among a list of 916 metro areas nationwide.

Though the income divide in Clark County is not as stark as it is elsewhere, the gap is growing. One way to combat that is through education, said Mike Bomar, president of the Columbia River Economic Development Council. His organization is tasked with planning and fostering business growth and innovation.

Through education people can find pathways to increasing wealth over time and securing family-wage jobs (and better) as they progress in their careers.

“We have to have the diversity of skill sets and the diversity of opportunities,” Bomar said.

He also said Clark County should continue to diversify its industries. There is a cluster of computer, electronics and semiconductor businesses, but Clark County also has advanced manufacturing and technology, life sciences and health, software companies and food startups. By not hinging the community’s success on one single industry, it makes it easier to deal with economic downturns or other market fluctuations, Bomar said.

“We can be more resilient,” he said. “We can stick and move a little better.”

Attracting businesses and people is important, too. Clark County’s large businesses, such as HP, PeaceHealth, WaferTech, Banfield Pet Hospital and Nautilus, “help draw that initial talent in the area,” Bomar said. And then, those talented people go on to launch startups.

What about low-income people who have a great idea but no capital to pursue it? That can hurt entrepreneurship, Silver said.

Income inequality is a tricky subject with no simple resolution. Education, housing, opportunity, tax policies — a myriad of factors plays into it.

“It’s everything,” Silver said.

What it means to be a top earner in Clark County is being redefined. What’s unknown is how those at the bottom will be defined in the future. How the Affordable Housing Fund will be dispersed and what its impact will be on the local economy, and the effects of increasing the minimum wage, all play into whether those in the lowest income brackets will benefit from the local renaissance of economic prosperity — or stagnate.