The chart above illustrates the District’s economy in real chained dollars. That’s economist speak for dollars that have been adjusted for inflation. It and the chart below reflect the fact that the District’s growth has been slow and uneven over most of the last decade.
The economy grew from $103.41 billion to $105.02 billion in 2014. That represents a rate of growth of 1.55%. That’s better than the 0.61% contraction that took place in 2013, and better than the 1.28% average annual growth rate since 2006, but it’s well below what is considered healthy by most economists. And it’s certainly not fast enough to make a dent in the District’s high unemployment and growing rate of poverty.
In addition, the BEA used fuller and more precise measurements of the economy to go back and revise downward the size of the District’s economy in prior years. Yes, the economy has returned to growth, but it’s marginally smaller than we thought it was last year.
Interestingly, the District did outperform both Maryland (0.83% growth), and Virginia (0.02% growth). In fact, Terry McAuliffe’s Virginia is about twenty bucks away from a recession.
Click here to see the statistics on what the District has missed out on during the last decade of slow/no growth in terms of jobs and income. Hint — it adds up to approximately 51,000 private sector jobs, 7,000 District government jobs, and $4 billion in lost annual income for DC residents.
It is within the District government’s power to shift its economy into a higher gear, but it will require intense focus and smarter policy. The work of the tax revision commission should be the beginning of tax reform, not the end, and we need to add to it a vigorous overhaul of the way the District regulates almost everything.
Additionally, our labor markets have become more rigid and inflexible over the last decade. It’s become more difficult, more expensive, and more risky to hire anyone. Our labor market is ripe for reform and modernization. Those aren’t the only necessary steps, but they’re a start.
Should this “lost decade” continue, here’s what the average District resident can expect:
- Fewer jobs
- Many fewer good jobs
- Less affordable housing
- Less housing, period
- Fewer new restaurants
- Fewer new retail stores
- Fewer new companies created in the District
- Fewer companies moving to the District
- A less dynamic District
- More income inequality
- Less economic inclusion
- Less tax revenue
- A corresponding reduction in social services
- Less upward mobility
- Less opportunity for promotion and advancement
- Less of the Streetcar project
- Fewer improvements to Metro
- Fewer new bus routes
- Higher taxes
- Higher fees
- Bye bye budget surpluses
- More crime
- More violent crime
- More traffic
- Fewer new parks and green space
- Fewer small retail businesses
- Slower population growth or contraction
- Lower graduation rates
- As Jimmy Carter would say, a general malaise
- There are sure to be more. Let us know what we’ve missed at email@example.com
Click here to see the alternative: A Pro-Growth Agenda