Data Show Poverty and Income Trends in Virginia

By Adam Hamza
Capital News Service

(This article was originally published on September 30, 2019)

RICHMOND, Va. — Richmond’s poverty rate dropped dramatically, Loudoun County had the nation’s highest household income and the gap between rich and poor widened in Virginia.

Those are key takeaways from a voluminous set of economic data released last week by the U.S. Census Bureau.

Among other things, it showed that proportion of Richmond residents living below the poverty line fell from 24.4% in 2018 to 21.9% last year.

Since 2016, the city’s poverty rate has dropped 4.9 percentage points. Only 18 of the approximately 800 U.S. counties covered in the data release had a bigger decrease. (For statistical purposes, the Census Bureau treats Virginia’s independent cities like counties.)(Poverty rates in Virginia since 2010)

Valaryee Mitchell, director of the Office of Community Wealth Building, said she’s pleased with the progress Richmond has made, but there’s still “a lot of work ahead of us.”

“There are thousands of non-profits in the city doing great work, but yet we still have a 20-plus poverty rate,” Mitchell said.

“We know people in Richmond are in poverty because of system structures that were put in place many years ago,” Mitchell said. “In order to really have an impact on poverty reduction, and on improving people’s lives, we have to work diligently to change those systems and to change those policies.”

The poverty and income statistics come from the American Community Survey, which is conducted annually by the Census Bureau. On Thursday, the agency released the 2018 survey results for all states and for counties with more than 65,000 residents. Because it is a survey with a margin of error, the single-year results are not considered valid for less populated jurisdictions.

Poverty rates

The nation’s poverty rate dropped from 13.4% in 2017 to 13.1% last year. That’s down from 15.5% in 2014. Poverty status is based on income level and family size. In 2018, a person under 65 with an income less than $13,064 was considered poor. For a family of four including two children, the poverty cutoff was $25,465.

Virginia’s poverty rate in 2018 was 10.7%, according to the American Community Survey. Because of the margin of error (0.3 percentage points), that was unchanged from the previous year.

Virginia has maintained a poverty rate between 10% and 11% since 2010. The commonwealth was tied with North Dakota for the 12th-lowest poverty rate in the country in 2018.

According to the Census Bureau, poverty rates in 14 states and Puerto Rico declined from 2017 to 2018. Connecticut was the only state that saw a statistically significant increase in poverty.

Montgomery County, home to Virginia Tech, had the highest poverty rate among Virginia localities included in the 2018 American Community Survey data. Its rate rose from 26 percent in 2017 to 28.5% last year. That was the ninth-highest poverty rate among the counties.

Other Virginia localities with poverty rates above 20% were Richmond, Lynchburg and Roanoke.

Richmond is the only city in Virginia with an office in a government dedicated to poverty reduction, according to Mitchell. She said it’s crucial for localities to take charge in tackling poverty issues. She also said they could benefit from an office of community wealth building to streamline the joint efforts of different organizations.

“I think when a city takes the lead … it puts a certain amount of positionality there,” Mitchell said. “It’s not just a nonprofit that’s trying to get money, but it’s really a city saying ‘Look, let’s all look at the different areas in a non-competitive space.’”

Median household income

The Census Bureau said the national median household income, adjusted for inflation, increased by 0.8% in 2018 to almost $62,000. This is the highest median household income measured by the American Community Survey.

The District of Columbia ($85,200) and Maryland ($83,200) had the highest median household incomes in the U.S.; West Virginia ($44,100) and Mississippi ($44,700) had the lowest.

Virginia ranked 11th in median household income last year at about $72,600 -- about the same as in 2017 in light of the survey’s margin of error.

Loudoun County had the highest median household income in the U.S. last year -- nearly $140,000. Several other localities in Virginia also ranked high on the national list: Arlington County (No. 5), Fairfax County (No. 6), Stafford County (No. 15) and Prince William County (No. 17) -- all with median household incomes well above $100,000.

At the same time, five localities in Virginia had median household incomes below $50,000: Lynchburg, Roanoke, Portsmouth, Richmond and Norfolk.

In many of Virginia’s poorest counties, incomes have been dropping. For example, between 2017 and 2018, median household income fell 10% in Montgomery County, 6% in Portsmouth and 10% in Lynchburg.

Richmond, however, was a bright spot: The city’s median household income rose 3% last year to about $49,000. That is up 15% since 2015.

Income inequality

While nationwide poverty rates and median household income improved in 2018, income inequality increased significantly.

The Census Bureau uses the Gini index to measure income inequality. The index can range from zero (for perfect equality) to one (for total inequality, where one household has all of the community’s income).

The national Gini index rose to 0.4845 in 2018 from 0.4822 in 2017.

Last year, the Gini index was highest in the District of Columbia (0.5243) and New York (0.5130) and lowest in Utah (0.4269).

Income inequality rose in Virginia last year. The state’s Gini index jumped from 0.4674 in 2017 to 0.4754 in 2018.In 2017, 23 states had a greater income inequality than Virginia. Last year, only 19 states did.

Among the approximately 825 U.S. counties covered in the data, New York County, New York (0.5948), Orleans Parish, Louisiana (0.5617), and Essex County, New Jersey (0.5539) had the highest levels of income inequality.

Richmond had the 28th-highest Gini index (0.5524) in the nation. The cities of Norfolk (0.5179) and Roanoke (0.5099) were close behind.

At the other end of the scale, Stafford County had the fifth-lowest level of income inequality in the United States, with a Gini index of 0.3580.