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September 23, 2014

The Lion’s Share

Buried in national income and poverty statistics released last week is this nugget: A small sliver of Virginia households, the highest-income one-fifth, rake in over half of all income in the state – 50 cents of every dollar. And their share has grown in the past few years.

The four in ten Virginia households with incomes under $50,000 bring home just 12 cents for every dollar earned in Virginia, according to the Census Bureau data.

There’s nothing wrong with Virginia’s most highly-educated workers bringing home high incomes, and the trend isn’t confined to the commonwealth. But when a small share of households have the lion’s share of income, it becomes tougher for lower-income families to keep up with the cost of living, much less afford college, buy a home of their own, and save for the other things it takes to build wealth and opportunity.

A large number of Virginia households have very low incomes: While the top fifth of Virginia households brought in an average of $217,000 in 2013, the bottom fifth brought in an average of just $14,000, according to the Census estimates. (Both these income numbers are likely to be somewhat understated, since the survey does not collect data on earnings above $1.1 million or on capital gains – a significant source of income for high earners – or the value of non-cash transfers, such as food assistance, for low-income households.)

For Virginia to have a strong economy with a prosperous future, everyone needs an opportunity to find useful work that pays a fair wage. The Census figures are a sobering reminder that, at a time when many hard-working Virginia families struggle to make ends meet, more and more of Virginia’s income pie is being served to a relatively few households.

Levi Goren

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