Let’s look at the Tri-City economy through the lens of Charles Dickens

One of my fondest childhood memories of this time of year was of English actor Basil Rathbone’s deep baritone singing Charles Dickens’ “A Christmas Carol” on my parents’ record player. (Yes, I know, I get into that.)

It got a child obsessed with toys under the tree to actually think of people I hadn’t seen. Children who had no toys under the tree.

As we celebrate the holidays this year, I want to bring a Dickensian perspective to the economies of the larger Tri-Cities. In particular, let’s look at the members of this community, now numbering over 300,000 souls, whose lives look more like Tiny Tim than comfortable middle-class Americans.

In the columns over the past year, we’ve celebrated some good economic news, including the recent rise in median household and per capita income seen in Benton Franklin trend data.

The increases in these key measures have surpassed the nation. The key figures are covered by the trends because, as mean values, they summarize a lot of information in one number. But like all middle values, they don’t tell the whole story or address all of our questions.

21st Century America is deeply interested in the distribution of income and wealth.

Trend data includes a classic measure of quintile income distribution.

More information can be gleaned from this indicator, which can be covered within the confines of this column. But let’s summarize the results by comparing the ratio of total income claimed by the top 20% of households to the income claimed by the bottom 20% of households.

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For 2021, the ratio was 11.9. This means that the average household in the top 20% claims nearly 12 times the income of the average household in the bottom 20%.

There seems to be a big discrepancy. And it’s compared to Canada, Germany or Japan, via a slightly different calculation by economists at the Organization for Economic Co-operation and Development.

However, compared to the US and even Washington, the two counties fare relatively well. In the US, the same ratio was 17.3 in 2021; for the state, 15.8. The gap between rich and poor is wide here, but not as wide as elsewhere in the US

Significantly, the top-to-bottom quintile ratio has shrunk in the larger Tri-Cities over the past 15 years. In 2006 it was 12.7 and a decade ago it was 13.6.

When asked about the status of those low on the economic scale, most people will point to the poverty rate. Specifically, the number and proportion of the population living at or below the federal poverty line (FPL).

Understandably, Benton-Franklin Trends covers this data.

The measure dates back many decades to President Lyndon Johnson’s Great Society reforms and has been the subject of countless studies and much debate on how to improve it.

The US Census Bureau is developing an alternative, the Supplemental Poverty Measure, which accounts for both in-kind contributions and expenditures.

In general, the resulting rate is 1-2 percentage points higher than the standard rate. (The federal stimulus packages decided to combat the pandemic emergency resulted in an exceptionally lower surcharge rate than the official one.)

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The FPL is updated annually by the Census Bureau.

For a family of four in 2022, the FPL was $27,750. For an individual it was $13,590. These thresholds imply that a family earning $28,000 or individuals earning $14,000 are not officially considered poor.

What, then, do the trends tell us about individuals in the larger Tri-Cities with incomes below the FPL?

Some progress over time. The 2021 census estimated the number at about 34,000. That’s a significant drop from the peak of just over 44,000 in 2014. Similarly, the rate in 2021, at 11.2%, was the lowest observed in the two counties in the last 15 years.

The peak of 20% was reached in 2011.

Over time, the rate here has fallen faster than the rate decline in the US. However, the rate for Washington has remained lower throughout the years.

Courtesy of Benton-Franklin Trends

Not surprisingly, the proportion of the total population living at or below the FPL obscures some revealing demographic differences.

One is old age, especially youth. Census data show that the estimated poverty rate for youth (under 18 years old) in 2021 was about 15% and for those under 5 years old was almost 20%.

Another variation in the overall proportion can be found by race and ethnicity.

The 2021 rate for the Hispanic population has been estimated at 19%, not quite double the overall rate. The rate for non-Hispanic whites: 6.7%, or almost a third of the Hispanic rate. Because of the small sample size, the census does not provide single-year estimates for other races.

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But looking at the 2016-20 five-year average shows that Black and Native American/Alaska Native rates were slightly higher than the Hispanic rate. On the other hand, the Asian rate was lower than the non-Hispanic white rate.

It’s clear we know where to find the Tiny Tims of the larger Tri-Cities. May they participate in economic progress in the coming year just like their neighbors.

Patrick Jones is Executive Director of the Institute for Public Policy & Economic Analysis at Eastern Washington University. Benton-Franklin Trends, the Institute’s project, uses local, state, and federal data to measure the local economic, educational, and civic life of Benton and Franklin counties.

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