Tuesday, June 28, 2022
June 28, 2022

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Even with Seattle’s superrich top earners, the city’s income gap is nowhere near the worst in the U.S.

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SEATTLE — When you combine the income of every household in Seattle, it added up to a staggering $46.3 billion in 2020, according to new census data. Of course, some households took in a much bigger share of that money than others.

The most affluent 20% of Seattle households — roughly 69,000 of the city’s 344,600 households — had an average income of $345,000 in 2020. The least affluent 69,000 households averaged about $18,800 — an extremely small amount in a city with one of the highest costs of living.

That means the top 20% had an average household income about 18 times higher than the bottom 20%.

Seattle’s income gap between top and bottom income groups, while big, is far from the worst. Among the 50 most-populous U.S. cities, Seattle ranked 20th.

Atlanta had the largest income gap, with the top 20% making an average income about 34 times higher than the lowest 20%. Boston; New Orleans; Washington, D.C.; and New York rounded out the top five, in that order.

The smallest gap was in Virginia Beach, Virginia, where the top 20% earned about 11 times more than the lowest 20%.

One factor keeping Seattle’s income gap in check is the city’s famously high minimum wage. Seattle passed its wage law in 2014, which gradually increased the minimum wage citywide. It’s now as high as $17.27 per hour for some workers — the highest in the nation.

The average income for the lowest 20% of households in Seattle ($18,800) is the third-highest among the 50 largest U.S. cities. The only places where the bottom income group earned more were Virginia Beach and San Jose, California.

In some cities with a comparable cost of living to Seattle, the bottom 20% earn significantly less. In Boston, the lowest 20% average less than $10,000 in income. In New York, it’s less than $11,000.

With the bottom income group earning the third-highest average income, you might think Seattle’s gap between rich and poor would be among the smallest. The reason it’s not is because the rich here are really rich. Seattle’s top income group, with an average household income of $345,000, ranked fourth-highest among large cities. San Francisco was No. 1 at $444,000, followed by Washington, D.C., and San Jose.

The Census Bureau also calculates the average income for the top 5% of households. In Seattle, that pencils out to a little more than 17,000 households, and their average income was $605,000.

Keep in mind that these figures are averages, which means extremely high or low earners can skew the numbers. However, it’s unlikely that many of Seattle’s billionaires are skewing the numbers for the top income group — if their wealth is in stocks, their income might not be as high as you’d expect.

I also delved into the data for Seattle census tracts to see which neighborhoods had the largest and smallest income gaps.

The area to the west of the University of Washington contained the three census tracts with the largest income gaps. The majority of residents in this area are college or graduate students, who often have little or no income. But the neighborhood also attracts young professionals, who are much more affluent. In one census tract here, the top 20% of households averaged $124,000, 97 times that of the bottom 20%, which averaged less than $1,300.

Other areas with large income gaps include one census tract in the western end of Capitol Hill, where the highest-earning households averaged about 40 times more than than those at the bottom. Another census tract that straddles Capitol Hill and the Central District had an income gap nearly as large.

At the other end of the spectrum was the Westlake neighborhood, in central Seattle. This area is primarily made up of young professionals, nearly all renters. Many people who live here work at nearby Amazon. The top 20% averaged $279,000 in income, not quite five times more than the bottom 20%, which averaged $58,000.

Other areas with small income gaps include West Seattle’s Arbor Heights neighborhood, primarily composed of owner-occupied single-family homes, and Interbay, a renter-dominated neighborhood between Queen Anne and Magnolia.

These income figures are calculated by taking an average of five years’ worth of data — in other words, the 2020 release is actually an average of the data from 2016 to 2020. The Census Bureau uses five-year averages to increase the sample size, which improves the accuracy of data for relatively small areas like census tracts.

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